Hyperliquid's EVM: The Layer 1 Blockchain for All Finance
Hyperliquid's EVM compatible chain is being overlooked, and here's why you should start to pay attention
HyperEVM is the home for all finance. From AMMs to CLOBs, tokenized collateral, structured products, and more, it’s an ecosystem where capital stays on-chain, innovation is continuous, and opportunities are limitless.
The HyperEVM Thesis
HyperEVM keeps value on-chain. Unlike ecosystems that leak value through external incentives or centralized control, the desirability of HYPE ensures that capital remains within the network.
“There is no biased team king-making participants. Continuous competition drives innovation.”
The Hypercore DEX, native to HyperEVM, powers primitives previously impossible on-chain, including structured products and funding rate mechanisms.
New Financial Primitives
HyperEVM supports advanced on-chain finance:
Structured Products: On-chain options like Rysk Finance, derivatives (Hypercore + new HIP-3 markets), and delta neutral yield strategies that combine AMMs + the above-mentioned primitives.
Capital Efficient Collateral: Tokenized HLP (Hyperwave and Blueberry), Liquid Staked HYPE, and Felix’s USDhl enables Hyperliquid native capital efficiency and connects Hypercore to HyperEVM.
Delta Neutral LP: The ability to long/short perpetuals on Hypercore while providing liquidity for volatile asset pools on HyperEVM enables LPs to earn fees without directional exposure (Impermanent Loss).
AMMs and CLOBs: Coexisting for Maximum Efficiency
HyperEVM is uniquely designed to support both AMMs and Hypercore’s CLOB, leveraging the strengths of each to maximize liquidity, innovation, and composability.
CLOBs for Deep Liquidity: Central limit order books remain essential for major assets and perps, attracting professional market makers and maintaining deep liquidity.
AMMs for DeFi-Native Assets: Hyperliquid native tokens will likely launch via AMMs, which provide better price discovery, novel bootstrapping mechanisms through incentives, and democratized market-making.
Unique DCA Strategies: AMMs enable dollar-cost averaging along bonding curves, allowing traders to enter/exit positions gradually and optimize returns.
Superior Composability: AMMs can integrate with DeFi primitives more effectively than CLOBs, enabling advanced yield strategies, leveraged positions, and innovative financial products.
Harmonious Coexistence: Both AMMs and CLOBs have complementary roles—CLOBs maintain depth for high-volume assets, while AMMs support new token launches, long-tail assets, and DeFi-native innovation.
“AMMs democratize market making, enhance composability, and unlock novel strategies, while CLOBs maintain liquidity for the heavyweights. Together, they define the future of on-chain trading.”
Distribution & Regulatory Challenges
Hyperliquid’s biggest challenge is onboarding:
Limited fiat on-ramps, directly from bank accounts.
Complex regulatory landscape for decentralized derivatives.
“Challenges create opportunities: early builders who solve onboarding and compliance capture outsized market share.”
Despite these hurdles, native liquidity and innovative primitives continue to attract early adopters and builders. Wallets like Phantom and MetaMask are incorporating Hyperliquid’s Builder Codes to enable perps trading natively within the app.
Additionally, Circle announced support for HyperEVM, which clearly represents institutional demand and will make liquidity far more accessible.
Community & the Hyperliquid Wealth Effect
The $HYPE airdrop is now worth over $13 billion, the largest ever in crypto. Early HYPE buyers and airdrop recipients are highly engaged and loyal, farming, building, investing, and evangelizing within the ecosystem. Hyperliquid has created a cult full of Hypios, PiPs, and .hls who are dedicated to contributing and evangelizing both $HYPE and HyperEVM as the best cryptoasset in history.
This wealth effect generates strong network effects and long-term retention without centralized marketing.
HIP-3: Unlocking Market Innovation
HIP-3 is HyperEVM’s mechanism for on-chain derivatives and long-tail assets, but the right amount of HYPE for this system is still unknown. Everyone thinks 1M HYPE is a lot, and the exact mechanisms about collateral types, fee distribution, slashing, and winding down markets are unproven. The landscape is wide open for experimentation, and early movers stand to capture significant upside.
Kinetic’s Advantage: Having accumulated nearly 30M HYPE, Kinetic is best positioned to offer exchange as a service, providing turnkey derivatives for traders and builders.
Competitor Opportunities: Other teams can assemble offerings modularly: UI/UX, marketing, or market-making components, allowing a wide range of entrants to innovate and compete.
Beyond Crypto: Perpetual markets won’t be limited to cryptocurrencies. For example:
Obviously, equities and commodities.
Ventuals is planning a pre-IPO ticker market, likely rich with inefficiencies for traders to exploit.
Other possibilities include private perps for stock options, privately held or preferred equity.
Novelty markets, sports betting, and gaming derivatives (CSGO, Pokemon) could thrive.
Prediction markets of all kinds, where risk can be hedged or traded on-chain.
“HIP-3 is a blank canvas. Teams who creatively deploy HYPE to build derivatives, perps, and prediction markets will define the next era of DeFi innovation.”
Why Builders, Traders, and Investors Should Care
Builders: Deploy protocols using AMM + CLOB, structured products, and tokenized collateral. Innovate in a fertile ecosystem for long-tail assets and spot RWAs.
Traders/Farmers: Leverage capital-efficient HLP + staked HYPE, trade long-tail assets with deep liquidity, and access unique on-chain primitives. There are countless, high-quality DApps without tokens.
Investors: HYPE is scarce, staked, and reflexive. Early adopters amplify network effects, creating a resilient growth engine. Multiple TradFi companies have launched DATs even though the $HYPE asset is less than a year old.
Why HyperEVM Is Unstoppable
HyperEVM is complementary to making Hyperliquid the home for all finance. Capital stays on-chain, innovation never stops, and the ecosystem rewards those who build, trade, and hold HYPE. From AMMs to CLOBs, HIP-3 derivatives, tokenized collateral, and structured products, HyperEVM offers opportunities that simply don’t exist anywhere else.
Distribution and regulatory challenges are real, but they create outsized opportunities for early movers to capture market share and define the future of on-chain finance. Meanwhile, the Hyperliquid wealth effect ensures a loyal, engaged community that keeps expanding the network’s influence.
Builders, traders, and investors alike should get involved: HyperEVM is where the next generation of DeFi is being developed, and $HYPE powers it. The ecosystem is live, capital-efficient, and full of first-mover advantages, making it the most compelling Layer 1 in crypto today.