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Hyperliquid in-depth analysis: Can this thing really "sew" the silkiness of CEX and the security of DEX together? Lao Jiucai will show you

Want to experience Binance-level transaction speeds but don’t want to hand over your assets to the exchange? Hyperliquid, a high-performance public chain, claims to have the best of both worlds. This article uses vernacular to dismantle its technology, HLP market making and Dutch auction currency listing. Finally, I don’t forget to remind novices: before engaging in innovation, first seek out the mainstream exchange fee discounts through formal channels!

Hyperliquid in-depth analysis: Can this thing really "sew" the silkiness of CEX and the security of DEX together? Lao Jiucai will show you

#Hyperliquid: Can this thing really "sew" the silkiness of CEX and the security of DEX together?

In the currency circle, there is never a shortage of people who want to make a big deal. But the Hyperliquid we talked about today is a bit interesting - it is not satisfied with just being a DEX. Its ambition is to "sew" together the exhilarating feeling of instant transactions in a centralized exchange (CEX) and the sense of security of having assets in one's own hands in a decentralized exchange (DEX).

You think about it: transactions are as fast as surfing on Binance and OKX, but your coins are always lying in your wallet, and every transaction can be found on the chain - is this pie good enough? Whether you are a veteran who keeps an eye on the market every day, or a DeFi native who firmly believes that “Not your keys, not your coins”, you probably need to take a second look.

So what is it? Why are you so crazy? Let’s put aside those awkward white papers today and use the old leek’s way of talking about it to get to the bottom of it.

What exactly is Hyperliquid?

To put it bluntly, Hyperliquid is a high-performance public chain (L1) created from scratch specifically for financial transactions, especially high-frequency gameplay.

Its ultimate goal is to build an open financial system in which all operations run on the chain and are completely transparent. This means that order placement, matching, and liquidation are all carried out clearly on the blockchain, without any off-chain "black box". The most important thing is that the experience cannot be stretched, and the speed must be strong.

**How ​​explosive is the performance? **

  • Confirmation speed: Block confirmation takes less than 1 second, and the median transaction delay is 0.2 seconds - this is almost the same as the experience of top CEX, saying goodbye to the common "stuck" of DEX.
  • Processing Capacity: Now it can handle 100,000 orders per second, and the ceiling can be even higher. This throughput is enough to support a large derivatives exchange.

**What are the black technologies in technology? ** It did not take the usual path of using the off-the-shelf Ethereum Virtual Machine (EVM), but developed its own HyperBFT consensus algorithm. This thing is a deep and magical modification of the classic protocol, just for one word: fast. The network layer has also been redesigned to squeeze out every drop of the potential of this chain.

Its "showroom" application: Hyperliquid DEX. This is a decentralized perpetual contract exchange running on its own public chain, using an order book model. You can regard it as a "strength show" of this high-performance chain to prove that you are not a talker.

Looking forward, it also plans to issue its own token standards, open spot transactions, and build a more open liquidity pool. The design emphasizes "composability", which means that developers can easily build all kinds of fancy financial applications on it like building Lego, and these applications are naturally interconnected.

Hyperliquid L1: The “highway” for high-frequency trading

The design of this public chain is shrewd - it picks the hardest nut to crack: perpetual contract trading.

Why?

  1. Highest technical ceiling: The latency and throughput requirements of the perpetual contract are simply hellish. If you can get it right, other financial applications will basically be just water.
  2. The thickest oil and water: In the DeFi world, derivatives trading, especially perpetual contracts, is where funds are most active and where money is cut the fastest. From here, traffic and funds will naturally come.

**So how does it achieve a CEX-level experience? **

  1. HyperBFT consensus algorithm: This is its core engine. Under the premise of ensuring sufficient decentralization and security, the transaction confirmation delay is pushed to the extreme (median 0.2 seconds), and 99% of transactions can be completed within 0.9 seconds.
  2. Complete on-chain order book: This is the essential difference between it and many "half-baked" hybrid DEXs. Every pending order, every transaction, and every liquidation you place is recorded on the chain and is publicly available for inspection. There is no room for black-box operations. This is the essence of the transparent spirit of DEX.
  3. Developer friendly: Provides standardized interfaces and tools to lower the development threshold. When the ecosystem is developed, various strategic tools and asset management applications will surely be everywhere, and the experience will only become more and more fragrant.

Hyperliquidity Provider (HLP): Be a “transparent” market maker and share the cake together

This function is quite interesting and can be understood as "democratization of market making strategies".

The founding team of Hyperliquid itself has a market-making background, which would have easily made people wonder: "Are you both referees and athletes?" In order to dispel this concern, they did a trick: throw the team's market-making strategy into a public "vault" for everyone to watch**.

This public vault is the HLP. Anyone can see its positions, orders, transaction history and capital flows, which is completely transparent.

**The more exciting operation is that this mode is open to all users. **

  • Not only can you watch the team's strategies, but you can also open a vault yourself and run your own market making or investment strategies.
  • If other users think your strategy is awesome, they can deposit money into your treasury, and everyone will share the money they make (the strategy creator takes 10%).
  • Doesn't this form an "asset management market" based on strategy? Experts rely on strategy to make a living, and novices can make money by relying on it.

⚠️ Important risk reminder (knock on the blackboard!): Of course, there is no free lunch. Any strategy may lose money, especially complex market-making strategies. If you encounter market disruptions or sudden changes in the market, we will teach you how to be a good person in minutes. Before investing money in any vault, be sure to do your homework: look at the historical performance, whether the strategy logic is transparent, and whether the founder is reliable. In the DeFi world, high returns are always accompanied by high risks, and the safety of principal is always the first priority! Don’t just drool over the earnings.

Dutch Auction Coin Listing: Shooting the Front of “Black Box Operation”

This is another bold innovation by Hyperliquid, which directly addresses the most criticized link of traditional CEX - the coin listing process.

In traditional exchanges, whether a project can be listed, when it will be listed, and how much it costs is often a "black box" filled with human relationships, sky-high "listing fees" and insider trading ("rat positions").

Hyperliquid uses a "Dutch Auction" to determine the right to list new tokens.

  • How ​​to play: Every once in a while (such as 31 hours), conduct an auction. The starting price is set high and then slowly decreases over time like an elevator.
  • Who wins: Whichever project party is willing to spend money to "stop" the descending elevator at a certain price, whose tokens will be eligible to be listed next time.
  • Price: Fully disclosed, the market has the final say. The last transaction price will also affect the next starting price.

The benefits of doing this are too obvious:

  1. Extreme transparency: There is no secret operation, all processes can be checked, and no one can try to do small tricks.
  2. Fair competition: Whether it is a large project or a small project, what matters is the real money you are willing to pay for liquidity, not "whether the relationship is strong or not."
  3. Establish trust: Investors know that the cost of listing coins is determined by open competition, information asymmetry is greatly reduced, and the chance of being cut off is also low.

If this mechanism can really work, it will definitely set a new ethical and technical benchmark for the entire industry.

Summary and outlook: If the cake is quite round, it depends on whether it can be cooked.

Having said all this, Hyperliquid is not just a new DEX, it is an ambitious attempt to redefine the decentralized financial experience based on a high-performance public chain.

  • What it has: A public chain (L1) tailored for financial transactions with rapid speed; a decentralized perpetual contract DEX that shows off its muscles; a transparent community-based market making system (HLP); a revolutionary fair currency listing mechanism.
  • What it wants to do: Integrate the experience of CEX and the spirit of DEX to give you the ultimate trading performance without handing over asset control.

The vision is quite beautiful: a fairer, more transparent, and more efficient on-chain financial world. But then again, all innovations have to face challenges: Can the technology be sustainable and stable? Can the ecology prosper? Can community trust be built? These all have to be tested by time.

For us ordinary players, Hyperliquid represents a new choice. If you are fed up with the custody risks of CEX (after all, exchanges are not exposed to thunderstorms every once in a while), and you dislike the slow speed and painfully high gas fees of mainstream DEX, then this type of high-performance native DEX is indeed worth paying attention to, and try the water with a small amount of money first.

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