Source: Bankless
Author: David Christopher
Original title: Hyperliquid & The Year Perps Caught Fire
Compiled and edited by: BitpushNews
Looking back at the growth of the crypto industry in 2025, Hyperliquid is an unavoidable focus.
The exchange ended 2024 with an epic airdrop and price performance, drawing renewed attention to the product from a large number of crypto Twitter users.
By the end of 2025, it had completely transformed into a groundbreaking platform, ranking fourth in revenue across the entire crypto ecosystem with total revenue exceeding $650 million, and at one point accounting for 70% of perpetual contract trading volume.
If you hadn't been closely following Hyperliquid's every step, this groundbreaking success might seem like it came out of nowhere. But its path to conquest was the product of a carefully crafted, unconventional growth strategy and well-deserved external recognition.
Here is a full recap of Hyperliquid's development in 2025 (and why it will truly be put to the test in 2026):
Q1 2025: The Advantages of Crypto Native
Hyperliquid's year of rapid growth began with a profound reminder of the importance of "truly keeping up with the pulse of the industry."
When the Trump token launched in January, Hyperliquid almost immediately listed the perpetual contract, beating other exchanges to the punch and beginning its winning streak as the "preferred venue for trading pre-issued tokens."
Of course, part of the reason it was able to act so quickly is that it was not hindered by the "corporate fences" that large exchanges use to protect users and companies.
But a key factor is its unwavering "insider knowledge"—its team is closely integrated with on-chain dynamics, enabling it to identify opportunities and recognize the advantages of being among the first to list these tokens. This solidifies Hyperliquid's reputation as the preferred venue for trading new assets before existing giants react.
In February, HyperEVM was launched—a general-purpose smart contract layer built on top of HyperCore (Hyperliquid's exchange engine). While it took some time to establish itself, its success was achieved without any top-down incentive program. This meant that by the time it was on track in the second quarter, it had already built a core user base that stayed not to "cash in" for rewards, but because they believed in the chain's vision and wanted to utilize its unique features (such as interoperability with HyperCore), not just to extract incentives.
Second quarter of 2025: Full-blown outbreak
Market attention came faster than most expected. In addition to the HYPE token rising nearly fourfold from its April lows, by May, Hyperliquid accounted for 70% of all on-chain perpetual contract transactions—an astonishing figure for a platform with zero VC backing and zero token incentives.
The HYPE token's peak, the explosive growth of HyperCore activities, and the development of the HyperEVM ecosystem are all contributing to the story of Hyperliquid.
As markets recover, Hyperliquid’s smooth user experience (UX) and deep liquidity captured a massive influx of orders, with total trading volume climbing to $1.5 trillion.
As mentioned earlier, HyperEVM is also on track, with its total value locked (TVL) growing from $350 million in April to $1.8 billion in mid-June, thanks to the launch of projects such as Kinetiq, Felix and Liminal and users’ exploration of new earning opportunities—all of which are burning HYPE tokens in the background.
Hyperliquid seems to be everywhere in this rapid growth.
It appeared on national television, was reported by Bloomberg, and became a focal point of CFTC policy discussions. This exchange became impossible to ignore.
Third Quarter of 2025: Peak Momentum and the Beginning of Differentiation
Starting in the third quarter, there was a signal that Hyperliquid's infrastructure was becoming indispensable outside of its own ecosystem.
The Phantom wallet bypasses the Solana-based perpetual contract platform, opting instead to integrate Hyperliquid via builder codes. Builder codes are a mechanism in Hyperliquid that allows external platforms to earn fees by routing transactions to HyperCore.
Rabby followed closely behind. Then came MetaMask.
Many mobile trading applications are launched via builder code.
In summary, through these integrations, the "partners" have earned nearly $50 million in fees and routed $158 billion in transactions.
Then, in September, a bidding war for USDH broke out—revealing just how valuable and well-known Hyperliquid had become.
The problem is simple: Hyperliquid holds approximately 8% of the Circle USDC supply in its cross-chain bridges, leaking about $100 million in revenue annually to its direct competitor (Coinbase), while Hyperliquid's own ecosystem cannot reclaim these revenues. Issuing a native stablecoin could solve this problem, potentially channeling $200 million in annual revenue back to Hyperliquid.
Invitations to issue stablecoins have been issued, attracting numerous prominent bidders.
Ethena offered a $75 million growth commitment and institutional partnerships. Paxos even threw out PayPal and Venmo integrations, prompting PayPal to mention Hyperliquid on Twitter.
Ultimately, Native Markets won the bid—a team led by highly respected HYPE contributor Max Fiege, former Uniswap Labs COO MC Lader, and Paradigm researcher Anish Agnihotri.
Why could a smaller, less well-funded team beat these giants? Because they were more favored and more aligned with the spirit of Hyperliquid: self-reliant, aligned with the same goals, and prepared to build something truly organic—just like Hyperliquid itself was when it was built.
The ripple effects extended beyond Hyperliquid itself. MegaETH soon announced its own native stablecoin plan. Sui followed suit in November.
However, USDH also marked the peak of the HYPE token in mid-September—a time when competition began to emerge. Aster (a Binance-based exchange backed by CZ) and Lighter (an Ethereum L2 perpetual contract platform) both launched with aggressive airdrop campaigns. Trading volume continued to be fragmented, with Hyperliquid's market share split, holding only 17.1% at the time of writing.
Fourth Quarter of 2025: The Troubles of Maturity and Growth
In October, the long-awaited HIP-3 was launched, opening up permissionless listing on HyperCore and driving the expansion and decentralization of exchanges.
Anyone who has staked 500,000 HYPE tokens can now deploy custom markets, such as:
- Stock perpetual contracts from Unit's Trade.xyz and Felix Protocol
- Perpetual contract market using interest-bearing collateral from protocols like Ethena (such as sUSDE)
- Markets that provide exposure to synthetic materials from private companies like SpaceX or Anthropic through platforms such as Ventures.
However, despite the launch of HIP-3, the price of the HYPE token has fallen by nearly 50% from its September peak.
What are the reasons? Besides the market environment and competition, two things stand out in particular.
First, Hyperliquid experienced its first ADL (Automatic Deleveraging) event in over two years this quarter. During the market crash on October 10th, over-leveraged positions ran out of margin faster than the liquidation engine and HLP (Hyperliquid Liquidity Provider) could absorb. The protocol triggered over 40 automatic deleveraging events within 12 minutes, forcibly reducing the most profitable positions to rebalance the ledger. While some argue that the affected positions were still "green liquidations," others contend that the mechanism liquidated more than was needed to cover bad debts. Yes, the system remained solvent without external funding intervention, but like the market as a whole, Hyperliquid may need time to recover from this event.
Secondly, in November, the team token unlocking began. Although the total unlocked amount was lower than expected, this vesting arrangement may have also contributed to HYPE's poor performance. The sell-off was small—only 23% went to the OTC counter, while 40% was restaking—but the future unlocking pace remains unclear. My interpretation is that the core team may still be finalizing the timeline to balance contributor fairness with ecosystem health. However, for a protocol known for its transparency and "honesty," this uncertainty can cause market unease.
Hyperliquid's first unlock released 1.75 million HYPE tokens after the lock-up period ended, but the team has not yet fully disclosed the pace of future unlocks.
The Testing Grounds of Perpetual Contracts
Despite the cooling of market and trading activity, we should not overlook the profound evolution of the perpetual contract ecosystem that has occurred alongside Hyperliquid itself when trying to understand why Hype has underperformed.
Lighter and Aster are just two examples of on-chain competition. While their transaction volumes may be inflated due to airdrop hunting, they do offer genuine options.
In the off-chain space, Coinbase's perpetual contracts will soon compete with Robinhood's offerings in this area. As perpetual contracts continue to become mainstream, more competitors will emerge.
In other words, Hyperliquid is in its trial phase, which will continue until 2026.
The question isn't whether it actually achieved significant success by 2025—it did. The question is whether, as the space becomes more crowded, this exchange can prove that its path to growth through integration methods like builder code and a decentralized model similar to HIP-3 remains advantageous.
What got them to where they are today was building better products and a better ecosystem, without taking shortcuts. What will allow them to continue leading is doing the same thing again.
