Learn more about HYPE: The token of the advanced Hyperliquid exchange

In today’s cryptocurrency trading world, what is HYPE? is becoming an increasingly common question among investors. Hyperliquid has emerged as a massive force in the decentralized exchange (DEX) space, with user-friendly interfaces and advanced technology. To better understand its potential, we need to explore the entire ecosystem supported by HYPE.

What is Hyperliquid: A Revolution in Decentralized Trading

What is HYPE? It is the native token of Hyperliquid – a decentralized exchange running on its own blockchain. Unlike most competitors, Hyperliquid does not rely on Ethereum or any major blockchain; instead, it uses a custom infrastructure designed to handle transactions at ultra-high speeds with minimal costs.

This platform offers perpetual futures trading, allowing traders to profit from price changes of Bitcoin, Ethereum, Solana, and over 100 other cryptocurrencies without owning them. The combination of deep liquidity, low slippage, and a smooth user interface has helped Hyperliquid attract hundreds of thousands of traders in less than two years of operation.

Why HYPE and Hyperliquid Stand Out: Technology at the Heart

The true strength of Hyperliquid lies in its underlying technology. The platform is built on two main technical components: HyperEVM and HyperBFT.

HyperEVM: Bridging Ethereum and High Performance

HyperEVM is an Ethereum Virtual Machine integrated directly into Hyperliquid’s Layer 1. This allows developers to write Ethereum-compatible smart contracts and use them on Hyperliquid without conversion. These contracts can interact directly with the platform’s spot order book and perpetual futures order book, creating new dApp opportunities that other platforms have not offered before.

HyperBFT: The Performance Engine

HyperBFT is Hyperliquid’s custom consensus algorithm, inspired by the Hotstuff protocol. It is designed to process over 200,000 transactions per second with block confirmation times under one second. The platform can also withstand Byzantine failures – meaning it remains operational even if up to one-third of validators are compromised or malicious.

HYPE Economic Model: Focused on Community

What is HYPE if not a token representing Hyperliquid’s commitment to its community? This token has three main functions: governance, staking for rewards, and reducing transaction fees for holders.

A unique aspect of HYPE is its distribution. Instead of prioritizing early investors, Hyperliquid allocated 76.2% of the token supply to user-centric initiatives:

• 38.88% for future releases and community rewards
• 31% for genesis airdrop
• 23.8% for contributors
• 6% for Hyper platform
• 0.3% for community grants

On November 29, 2024, Hyperliquid conducted one of the most generous airdrops in crypto history, distributing HYPE to nearly 100,000 eligible users with an average allocation of about $45,000–$50,000. This event set a new standard for how decentralized projects distribute their tokens.

Trading Performance: Where Hyperliquid Truly Shines

Unlike other decentralized exchanges that use automated market makers (AMMs), Hyperliquid employs a decentralized order book model. This means prices are determined by actual supply and demand, not by a mathematical formula. The result is extremely low slippage, even in highly volatile markets.

The platform also supports advanced trading features:

• Scale orders: Breaking large orders into smaller parts, increasing stepwise with price
• Memecoin trading: Allowing traders to buy tokens before they are officially listed
• Hyperps: Exclusive perpetual contracts without spot price data
• Vaults: Enabling users to copy trade from top traders and share profits

Security: The Truth Behind Concerns

In recent months, Hyperliquid has faced some security concerns. By the end of 2024, security experts reported activity involving North Korean hacker-related wallets on the platform. This caused a sharp sell-off, with over $502 million withdrawn from Hyperliquid within a few days.

However, Hyperliquid Labs denied any security breaches, stating that “no exploits of Hyperliquid occurred” and “all user funds are accounted for.” To date, no confirmed security incidents have been reported on the platform. It also has bug bounty programs and adheres to industry security standards.

Hyperliquid’s Position in Today’s Market

While innovative, Hyperliquid still faces competition from well-known DEXs. Major rivals include:

• GMX: One of the oldest DEXs, offering perpetual trading with 50x leverage and competitive fees (from 0.05% for GMX V2)
• dYdX: Perp-focused DEX with over $1 trillion in trading volume, but a more conservative approach with maximum 20x leverage
• Jupiter Perps: Platform on Solana allowing up to 100x leverage, with APYs for liquidity providers reaching 50-70%

Hyperliquid’s strengths are speed, low latency, deep liquidity, and innovative features like early memecoin trading and democratized market-making strategies.

HYPE Today: Growth Potential

As of January 2026, HYPE is trading at $30.34, down 10.53% in the past 24 hours. Despite volatility, the token has shown an impressive growth trajectory since the airdrop, with a current market cap of $7.23 billion, placing it among top DeFi tokens.

Frequently Asked Questions about HYPE and Hyperliquid

What is HYPE and how does it work?

HYPE is Hyperliquid’s native token used for governance, staking, and fee discounts. It incentivizes user participation in platform management and reduces their trading costs.

How is Hyperliquid different from other DEXs?

Hyperliquid stands out thanks to its own blockchain (HyperEVM + HyperBFT), decentralized order book model, high transaction speeds, and advanced features like memecoin trading and scale orders. It is also one of the few DEXs allowing developers to build DeFi apps on its platform.

Is Hyperliquid safe?

Despite recent security concerns, no actual incidents have been reported. The platform has bug bounty programs and follows industry-standard security practices.

Conclusion: The Future of Decentralized Trading

What is HYPE? It is a symbol of a new generation in decentralized cryptocurrency trading – where speed, liquidity, and technology converge. Hyperliquid has proven that DEXs do not need to choose between liquidity and decentralization. Instead, it has built a platform that offers both, along with a trading toolkit that traders and developers are seeking. With HYPE trading at $30.34 and its ecosystem still expanding, Hyperliquid will be a project to watch for those interested in the future of decentralized finance.