Hyperliquid, a decentralized platform for derivatives, has quickly established itself as a major player in the on-chain trading sector, drawing significant interest from both individual and institutional investors. By 2025, the platform’s weekly trading activity
climbed to $47 billion
, representing a 78% increase in its user base and highlighting a transformation in the convergence of traditional finance (TradFi) and decentralized finance (DeFi). This article explores Hyperliquid’s innovative strategies in on-chain derivatives and its accelerating institutional uptake, referencing recent milestones and collaborations to evaluate its position as a leading force in the dynamic crypto landscape.
On-Chain Derivatives Innovation: A Catalyst for Growth
In 2025, Hyperliquid’s technological breakthroughs played a crucial role in boosting liquidity and expanding the market. The rollout of HIP-3 growth mode in November 2025
reduced taker fees for new markets by more than 90%
, bringing costs down to just 0.00144% for top-level traders. This move not only encouraged the creation of new markets without permission but also ensured new perpetual contracts were distinct from existing ones, expanding the variety of assets available for trading. For example, the debut of the
NVDA-PERP perpetual swap attracted $12 million in deposits and $5.8 million in open interest within its first day,
highlighting the platform’s effectiveness in drawing capital
for innovative derivatives.
Alongside these fee cuts, Hyperliquid’s HyperEVM and Unit layers, launched in February 2025, strengthened its infrastructure by supporting
Ethereum
Virtual Machine (EVM) compatibility and allowing direct deposits for major cryptocurrencies such as
BTC
and
ETH
.
These enhancements led to a total value locked of $2.08 billion
within the HyperEVM ecosystem, underscoring the platform’s attractiveness to both developers and liquidity providers. Thanks to these advancements,
Hyperliquid captured 70–80% of the decentralized perpetual trading market
by mid-2025, according to industry analysis.
Institutional Adoption: Bridging DeFi and TradFi
Hyperliquid’s growth among institutional users has been propelled by targeted partnerships and regulatory progress. A prime example is its partnership with Safepal, a top crypto wallet provider,
which allowed users to access Hyperliquid perpetual futures
with leverage up to 40x directly through Safepal’s hardware and software wallets. Announced in November 2025, this integration broadened Hyperliquid’s reach and aligned it with professional-grade financial tools.
The platform’s S-1 registration with the U.S. Securities and Exchange Commission (SEC) in 2025 marked a significant step toward integrating with traditional financial markets. By raising up to $1 billion through a public listing and merging with Sonnet BioTherapeutics and a SPAC,
Hyperliquid demonstrated institutional acceptance
of digital assets in mainstream finance. This approach, seen as a model for other crypto companies, has attracted investments from firms like Eyenovia and Sonnet BioTherapeutics,
further strengthening its reputation
.
Institutional trust is also reflected in the creation of Hyperliquid Strategies, a digital asset treasury (DAT) focused on acquiring HYPE tokens.
Launched in July 2023, this project set out
to secure $1 billion via a merger with Sonnet BioTherapeutics, Inc., and Rorschach I LLC, an affiliate of Paradigm Operations LP, a key Hyperliquid supporter. Although there were delays in shareholder voting,
the deal received 95% approval
from votes cast, indicating robust institutional backing.
Case Studies: USDH and the HYPE Token Ecosystem
Hyperliquid’s USDH stablecoin, introduced in 2025, marks a pivotal advancement in its institutional integration.
Backed entirely by fiat currency and U.S. Treasuries
, USDH is managed by BlackRock and tokenized through Stripe’s Bridge, addressing concerns around liquidity and operational risk. Its revenue-sharing model, which allocates half of reserve yields to HYPE buybacks and ecosystem development, creates a feedback loop that aligns the interests of both institutional and retail participants. This structure has been commended for boosting Hyperliquid’s financial independence and reducing its dependence on external stablecoins like
USDC
.
The HYPE token has also drawn institutional attention through initiatives such as 21Shares’ proposed U.S. SEC-approved ETF,
which utilizes custodians like Coinbase Custody
and BitGo Trust to connect DeFi with traditional finance. Alongside Hyperliquid’s HIP-3 protocol, which supports permissionless market creation,
this highlights the platform’s capacity
to grow its derivatives offerings and attract institutional funds.
Future Outlook and Challenges
Despite Hyperliquid’s rapid expansion through innovation and alliances,
obstacles persist
. Ongoing regulatory scrutiny of DeFi and the rise of new competitors could challenge its long-term prospects. Nevertheless, Hyperliquid’s emphasis on institutional-grade security—evidenced by collaborations with Checkmarx and CredShields—positions it well to manage these risks.
The partnership with Checkmarx and CredShields
is seen as a crucial element in maintaining trust within the evolving blockchain sector.
In summary, Hyperliquid’s ascent in institutional trading is fueled by its on-chain derivatives breakthroughs, strategic collaborations, and proactive regulatory engagement. As the boundaries between DeFi and TradFi continue to
fade
, Hyperliquid’s ability to balance growth, robust security, and institutional trust will be vital for its continued success.
