What Hyperliquid Reveals About the Future of Trading

The New York Stock Exchange rings a bell to open and close each trading day—but for most of the week, it’s silent. Despite modest extensions to trading hours, investors are still confined to a market that operates just 32.5 hours per week, leaving long stretches where opportunity—and risk—continue to evolve without them.

By contrast, digital assets trade continuously. The capability has gone far beyond buying bitcoin at 2 a.m. Decentralized exchanges (DEXs) like Hyperliquid have emerged, offering traders always-on access to cryptocurrency futures as well as tokenized versions of stocks, oil, and precious metals. For example, many investors reportedly turned to Hyperliquid following geopolitical developments involving Iran to speculate on oil prices outside of traditional market hours.

While this functionality may unlock new opportunities for investors, it also offers valuable insights for financial institutions observing Hyperliquid’s rapid rise.

As noted in the Why FIs Should Use Hyperliquid’s Playbook for Crypto report by Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research, Hyperliquid’s holistic approach could prove to be a gamechanger for financial services firms seeking entry into the thriving digital assets ecosystem.

Innovating on the Blueprint

The decentralized exchange model was pioneered by Uniswap, which introduced the automated market maker (AMM) paradigm. This represented a departure from the traditional order book model, where buyers and sellers post bids and offers, and trades only execute when prices align.

AMMs replaced this negotiation process with algorithms that automatically price trades. While this innovation enabled more efficient, always-on trading with minimal reliance on intermediaries, gaps in the model have since become apparent.

“They have proven to be very inefficient for price discovery and swapping assets at scale, especially when there is little liquidity,” Hugentobler said. “You can think of it as if your neighbor sells their house for $200,000 when they would be able to sell for $300,000. Then, all the houses in the neighborhood are going for $200,000 or less. They’re priced on the margin and they’re priced relatively, that’s the model Uniswap uses.”

Despite these shortcomings, Uniswap has achieved success and even secured investment from Blackrock—a testament to the viability of the DEX model and a foundation upon which Hyperliquid has continued to build.

“What Hyperliquid has done is they have incorporated a lot of different aspects, but the main one being a central limit order book (CLOB),” Hugentobler said. “It eliminates the relative pricing mechanism. It brings a centralized exchange feel to the platform while it’s all still on its own blockchain, so it’s still a decentralized exchange. The big selling point on a DEX is that you control your assets. All your assets are in your own wallet.”

Spinning Up Futures

One of Hyperliquid’s key innovations is its pricing mechanism for perpetual futures, which help keep prices closely aligned with the underlying asset. Unlike traditional future contracts, perpetual futures do not expire.

In addition to this flexibility, DEX platforms often offer substantially higher leverage than traditional markets, amplifying both potential returns and risks. One of Hyperliquid’s most ambitious features, however, is its approach to market making—placing it squarely in the hands of users.

“Hyperliquid has something called HIP-3, it’s their code base that allows validated developers to spin up a perpetual future to be traded on the exchange,” Hugentobler said. “What this enables Hyperliquid to do is to bring perpetual futures of traditional assets, to bring that tokenization aspect to its market.”

This means that any user who stakes 500,000 HYPE tokens (roughly just under $20 million, depending on market conditions), can create their own perpetual futures market tied to a wide range of assets. Notably, many leading HIP-3 markets are not tied to cryptocurrencies, which have long been associated with DEXs.

Instead, a large share of these markets track traditional financial instruments such as the S&P 500 and NASDAQ, as well as individual stocks. Others are linked to commodities like gold, silver, and crude oil.

A key driver of their popularity is simple; these markets are accessible 24/7, offering one of the few ways to trade continuously across asset classes.

“On January 30, gold was down almost 40% in a day,” Hugentobler said. “After the futures market closed and was done trading for the weekend, Hyperliquid spun up perpetual futures for silver. And within 24 hours it had several hundred million worth of volume being traded.”

“That’s not a mind-boggling amount, but the fact that they were able to spin that up and so quickly have volume over the weekend when traditional futures don’t, that is a big aspect to where this is heading,” he said.

The Liquidity Key

This underscores the dynamic capabilities of digital assets technologies. In traditional markets, over-the-counter desks facilitate large trades, alternative trading systems match orders, and market makers provide liquidity—alongside many other specialized intermediaries.

By contrast, Hyperliquid integrates these functions within a single blockchain-based system.

“A big thing that FIs need to take away is that liquidity concentration becomes the default,” Hugentobler said. “If they can build or partner with someone that can leverage this type of model and they own the model—or even part-own the model—they own that distribution. Then, they benefit from the fees and the coverage and every aspect of the trade lifecycle.”

Hyperliquid has taken this integrated approach through the launch of its proprietary stablecoin, USDH. While many institutions have embraced stablecoins in recent years, a stablecoin can be especially powerful for a DEX—allowing it to operate independently from external assets like Circle’s USDC and Tether’s USDT.

“It transitions them from a trading venue to a settlement hub,” Hugentobler said. “By having its own stablecoin, Hyperliquid can be the routing engine for payments. FIs can take that same approach by starting with trading, seeing what takes on the trading side as far as volume goes, and then leverage their own stablecoin or stablecoin partner and reap those same benefits of owning the platform and the distribution.”

“The key here is focusing on and leveraging different aspects of liquidity,” he said. “Whether that is issuance or launching a product or getting market makers, settlement partners, or custodians on board, liquidity is key at the end of the day.”

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Tags: Cryptocurrency TradingDecentralized ExchangeDEXHIP-3HyperliquidLiquiditySpot TradingStablecoin