Hyperliquid: Not Done

Competitive Landscape

Despite the end of the Hyperliquid points program as of September 2024, Hyperliquid has maintained high OI and volume, resulting in increased fees. As of today, the BTC OI on Hyperliquid sits at $1.4B, which is 15% of Binance ($9.2B), 46% of OKX ($3B) and 25% of Bybit ($5.6B). Over the past three months, the platform has averaged $6.4B in daily trading volume, which sits just above 50% of the daily trading volumes of Bybit and OKX. 

The closest competitor on the decentralized side, Jupiter Perps has averaged $704M in daily trading volume, 88% lower than Hyperliquid, while dYdX V3 and V4 combined have averaged $584M, 90% lower than Hyperliquid. Hyperliquid has represented 77% of perpetuals DEX volumes over the past three months. It’s important to note here that perpetuals DEX volume has decreased significantly since January. At the start of the year, Hyperliquid processed around $12B USD in volume, it now processes just above half of that. However, competing DEXs have also shrunk in volume (Jupiter was processing around $2.7B USD), and Hyperliquid has maintained above 70% volume market share throughout the period.

The team has achieved fee generation and volume dominance through two main factors: rapid, relevant listings and strong UX. The value of quick, relevant listings was demonstrated by the past weekend of activity. Hyperliquid was the first major derivatives exchange to list both TRUMP and MELANIA tokens, driving increased exchange volumes. Traditional decentralized orderbook protocols often struggled with listings, typically lagging in new market offerings and providing limited assets for trading. This stemmed from various factors: orderbooks couldn't compete with AMMs for tail risk assets since market makers avoided the risk, while peer-to-pool models faced difficulties finding liquidity providers for such assets.

The HLP has helped them maintain listing relevance - especially in the earlier days of the platform. Other perps DEXes have begun competing in this space, as shown by dYdX's permissionless listings supported by the MegaVault. However, as we’ve seen over the past few weeks, it also comes with risks (explored further below).

Beyond relevant listings, Hyperliquid has succeeded by providing smooth UX for users and market makers/HFT firms. Common feedback from firms and funds indicates that Hyperliquid's API surpasses competitors, potentially due to co-founder Jeff Yan and the team's market-making background. The user experience is straightforward, with seamless bridging functionality.