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Hyperliquid in-depth analysis: Why is it called “Binance on the chain”? Old Leek takes you to strip off his underwear!

Why does Hyperliquid make Binance anxious? Revealing the technical core, liquidity crushing and growth flywheel of this "Binance on the chain", Lao Lee teaches you step by step how to harvest wool safely and avoid the big pits of DeFi.

Hyperliquid in-depth analysis: Why is it called “Binance on the chain”? Old Leek takes you to strip off his underwear!

#Hyperliquid in-depth analysis: Why is it called "Binance on the chain"? Old Leek takes you to strip off his underwear!

Brothers, today we are not going to talk about the ups and downs of the market, but let’s talk about a decentralized exchange that has become so popular in the past two years that even Binance started to “can’t sleep” - Hyperliquid.

This thing is completely different from the previous Perp DEX (perpetual contract decentralized exchange) like GMX and dYdX. It is essentially a high-performance Layer-1 public chain created specifically for financial transactions. It is incredibly ambitious and wants to be the blockchain infrastructure that carries all finance. There are both perpetual contracts and spot transactions. Recently, it has launched its own stablecoin USDH. The community is also clamoring for an event prediction market (similar to Polymarket). The product boundaries are growing like weeds.

The community has given it two nicknames, one is very straightforward - "Binance on the chain", the other is more arrogant - "AWS of **liquidity". No matter which one, it shows that this product is not light.

1. Where are the technical talents? Self-developed public chain, speed catching up with CEX

The Hyperliquid team started from "first principles" to solve the problems of traditional CEX (centralized exchanges) such as black box operations, poor liquidity, and frequent "pin insertions". They did not tinker with the existing public chain, but directly rolled up their sleeves and developed an L1 chain for transactions.

The core of the architecture is divided into two parts:

  • HyperCore: This is the matching engine on the chain. The order you place, the price listed, the transaction, the margin calculation and the liquidation are all completed on the chain, and it is as open and transparent as glass. It uses the efficient Central Limit Order Book (CLOB) model in traditional finance instead of the AMM (automatic market maker) of the early DEX, so the trading experience and depth are immediately improved, no different from CEX.
  • HyperEVM: This is a general smart contract layer that shares consensus with HyperCore and is compatible with Ethereum EVM. It is convenient for other applications and protocols to integrate and call the status of the exchange. To put it bluntly, it leaves a backdoor for the ecosystem.

This "tightly coupled" design brings terrifying speeds close to those of centralized exchanges:

  • The median transaction delay is only 0.2 seconds, and 99% of transaction delays are less than 0.9 seconds, which is as fast as lightning.
  • The peak throughput is as high as 200,000 transactions/second. Is this data scary enough?
  • Block confirmation is sub-second final, and there is basically no need to wait.

To put it simply, it uses a decentralized approach to achieve CEX-level transaction speeds. There are currently 24 active nodes on the chain maintaining security and performance, which is fairly reliable.

2. User experience: as smooth as using top CEX

If you have used the contract interfaces of Binance and OKX, then there is almost no threshold for you to get started with Hyperliquid, and veterans can just rush in with their eyes closed.

  • Interface: Traditional order book + K-line chart, supports various advanced order types such as limit orders, stop-profit and stop-loss, and has a number of professional tools.
  • Operation: Connect the wallet (such as Xiaofox) and transfer the assets (currently mainly through Arbitrum bridging USDC) across the chain. Then the platform will generate an Agent Wallet for you. The private key is saved locally and only has transaction permissions and cannot transfer money. Afterwards, there is basically no need to sign and confirm repeatedly when opening and closing a position, and the experience is as smooth as Dove. The "da" prompt for opening and closing a position sounds quite exciting and a little bit addictive.
  • Reliability: In July 2025, there was an API failure that caused a brief outage. Without saying anything, the team directly took out about 2 million US dollars from the protocol treasury to compensate the affected users. This style of "responsibility for anything that happens" has won a lot of goodwill in the circle, which is much better than those pheasants who can only blame others.

3. Liquidity depth: leading position, crushing data

Technology alone is not enough, liquidity is the lifeblood of a trading platform. Hyperliquid is already the absolute leader in this field, with data crushing everything:

  • Trading volume: In July 2025, its single-month perpetual contract trading volume reached approximately 319 billion US dollars, accounting for 65% of the entire on-chain perpetual market (487 billion). At its peak, the market share once reached 75-80%, and no one else had this dominance.
  • Benchmarking Binance: In August 2025, its monthly trading volume reached 13.85% of Binance contracts, which is the highest proportion in history. The fact that a DEX can do this is enough to illustrate the problem. Can Binance not be anxious?
  • TVL (Total Locked Value): As of September 2025, it is approximately 2.7 billion US dollars, far exceeding other similar DEXs, and a real giant.
  • Handling fee: Maker (order) fee is 1.5bps, Taker (taker order) fee is 4.5bps, which is slightly lower than mainstream CEX. Staking its platform currency HYPE can also enjoy a handling fee discount of up to 40%, which is a waste of money.

4. Economic model and treasury: smart “flywheel” design

Hyperliquid's protocol vault is very cleverly designed. It is mainly composed of three parts, forming a growth flywheel. This trick is smooth:

  1. Assistance Fund (AF): It can be understood as the "central financial" and insurance fund of the agreement. 93% of platform handling fees will be injected here, mainly used to buy back and destroy HYPE tokens. The remaining 7% is allocated to the market making pool. Once there is a system problem that requires compensation (such as the downtime mentioned earlier), the money will be paid from here. This forms a positive cycle: the greater the transaction volume → the more handling fees → the more HYPE is repurchased and destroyed (which may drive the currency price) → attracting more users, the flywheel cannot stop spinning at all.

  2. HLP (Hyperliquidity Provider): This is a protocol-level transparent market making pool. Anyone can deposit USDC to become a liquidity provider, and the current annualized return is about 6.7%, with no management fees. This provides a deep liquidity backup and makes the market-making rules open and transparent to everyone, which is much better than the black-box operations of CEX.

  3. User Vaults: This is like CEX’s “copying” system. A trading expert (Vault Leader) opens a vault to display strategies. Ordinary users (Depositor) can deposit funds to follow orders. After profits are made, the Leader will take 10% of the profits, and novices can also follow the big guys.

5. Team and community: Elite small team, word-of-mouth growth

  • Team: Founder Jeff Yan, a former high-frequency trading company, Hudson River Trading, with a Harvard background. The core team only has about 11 people. It is an elite small team and the iteration speed is extremely fast. The best thing is that the project is said to have always been self-funded and has never taken any VC money, ensuring independence and focus on user interests, which is very rare in the currency circle.
  • Community: The global community is very active, especially in Europe and the United States. In November 2024, the platform currency HYPE (accounting for 31% of the total) was airdropped to early users. Many early participants received generous returns, which established a strong community reputation. Growth is mainly based on product strength and word-of-mouth, rather than crazy money-burning marketing. This down-to-earth approach is worthy of praise.

6. What did it do right? ——The combination of "Tao" and "Skill"

From the perspective of "skills":

  1. Phase 1 (Airdrop Incentive): Before TGE (Token Generation Event), use airdrop expectations to attract users to increase transaction volume, and the cold start will be fun.
  2. Phase 2 (Compliance Bonus): When major exchanges such as Binance are facing regulatory pressure in Europe and the United States, Hyperliquid, as a DEX that does not require KYC, has taken on a large number of overflow users and "inconvenient" funds, and this wave of dividends has been very satisfying.
  3. Phase 3 (Build Codes - The ultimate weapon): This is the key. It launched the "Build Codes" plan, which is equivalent to turning its high-performance trading engine into infrastructure and opening it up to other developers. Other projects (such as Phantom Wallet, PVP.trade, etc.) can be easily connected and directly have a mature DEX function. This is equivalent to establishing an exponentially expanding distribution network. You don't have to advertise as hard as you do, and you will naturally have countless "partners" to help you attract new customers. This is a great trick.

From the perspective of "Tao": The essence is just one sentence: **Hyperliquid carries the banner of "blockchain spirit" - openness, transparency, decentralization, and user sovereignty. ** When users are increasingly dissatisfied with CEX’s black-box operations and customer losses, a platform that not only has a CEX-like experience but also adheres to the principle of DEX transparency will naturally win people’s hearts. This is just like when Binance used the banner of "free trading" to fight traditional finance, history always repeats itself.

Written at the end: Old Leek’s true words - Safety comes first, and the wool needs to be harvested!

After talking so much about cutting-edge DEXs like Hyperliquid, I still have to chat a few more words in the end. This is a lesson learned through blood and tears:

**First, no matter how popular DEX is, for most novices and ordinary traders, mainstream centralized exchanges (CEX) are still a safer and more convenient starting point. ** They are regulated (albeit to varying degrees), have customer service, are convenient for deposits and withdrawals, and still have the strongest overall liquidity depth. Don’t rush into DeFi as soon as you get started, as it is easy to get into trouble.

**Second, if you want to use DEX such as Hyperliquid, be sure to access it through its official website or officially certified channels. Never click on links from unknown sources and beware of phishing websites. ** There are many scammers in the currency circle, and protecting your assets is more important than anything else.

**Third, whether you choose CEX or DEX, please remember: using our invitation link to register with a regular major firm is the first step to protect yourself and reduce costs. ** If this wool is not collected, can you afford your own handling fee?

We CoinRebate only recommend the world's top, licensed and compliant exchanges and will never touch any pheasant platforms. By registering through our link, you can directly get a permanent transaction fee discount, which is equivalent to saving money on every transaction. If you add up, you can save a lot in a year.

Get started safely, start by choosing a reliable exchange:

  • Binance: The world’s largest exchange, the comprehensive first choice, everyone knows it.

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  • OKX: The product line is rich, especially suitable for contract traders. Brothers who play contracts should not miss it.

  • Exclusive registration link: https://www.lywebuuz.com/join/LULALA

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  • Bybit: Excellent contract trading experience, rapid user growth, and easy to use interface.

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  • Bitget: The following system is well done, suitable for novices to learn, good news for beginners.

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  • Gate.io: There are many types of altcoins, a well-established exchange, and a good place for gold mining.

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  • Use the referral code: UQJBUVo to enjoy 30% commission rebate.

For experienced players who want to experience DEX such as Hyperliquid:

(Note: We also provide official recommended links for DEXs such as Aster mentioned in the article. You can search for relevant tutorials on the site to obtain them. Don’t be fooled by looking for links.)

The world of blockchain is exciting, but security always comes first. First lay a solid foundation in a major firm and become familiar with trading and wallet operations, and then it’s not too late to explore the stars and sea of ​​DeFi. I hope this in-depth analysis can help you, brothers, live longer in the currency circle together!

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