ICE Stake, an L2 Launch, 1,000x Leverage: Hyperliquid's Path of Onchain Financial Iteration

Two things are key to Hyperliquid's next stage: whether it can price and charge for the use of its order book, and whether it can keep liquidity unified between regulated and offshore markets.

Introduction: An exchange chain begins to spawn L2s

When people mention Hyperliquid, most think of the largest decentralized perpetual futures exchange. In 2025 its full-year trading volume was about $2.9 trillion, roughly 80% of onchain perpetual volume, and more than Coinbase.

But Hyperliquid is also a public chain. Its order book runs directly on its own L1, and HyperEVM also hosts a set of applications covering lending, DEXs and staking. Now this public chain has its first L2: on November 9, Kinetiq, the largest staking protocol on Hyperliquid, will launch Elysium, with a processing-capacity target of about 100x HyperEVM's, and the ability to read Hyperliquid's entire order book.

Elysium is not an isolated event. Over the past month, Hyperliquid's role has been changing. It is no longer just an exchange; more and more teams are treating it as infrastructure and building their own products on top of it:

• Papertrade borrows only Hyperliquid's prices. On October 10 it launched a "1,000x leverage, losing is mining" product, and notional volume passed $1 trillion within a week of launch;
• Wall Street has taken a liking to its matching engine. On October 29, ICE, the parent company of the New York Stock Exchange, announced it was taking a stake in Trade[XYZ], planning to use Hyperliquid's technology to open a regulated perpetual futures market for US users.

A crypto casino, a Wall Street stock exchange and a new chain look entirely unrelated, but all of them are using Hyperliquid in layers. This article follows that thread to explain what is changing on this exchange chain, and where it will take Hyperliquid.

1. Hyperliquid's architecture: first the exchange, then the chain

Hyperliquid's starting point is the reverse of most public chains: the team first wanted to build an exchange, found that existing chains could not keep up, and so built a chain of its own, writing the order book, matching and clearing directly into the chain.

Quite a few companies are now taking this path. Robinhood launched its own chain to issue tokenized stocks, Circle is building Arc, a stablecoin payment chain, and Ondo is also building its own asset chain. But most of them only put assets onchain, while trading still happens inside their own systems. Hyperliquid's trading engine runs onchain, and its order book can be called directly by other programs on the chain — everything that follows starts from this point.

Hyperliquid consists of two parts: HyperCore and HyperEVM. HyperCore is Hyperliquid's own trading system, which can only call preset functions; HyperEVM is an Ethereum-compatible environment dedicated to external protocols deploying contracts. (The architecture is shown in the chart below.)

The chart shows the following points:

First, HyperCore has three types of markets: official native markets, perpetual markets deployed by third parties under HIP-3, and prediction markets deployed by third parties under HIP-4. They share the same matching engine and margin account; third-party US stock and crude oil contracts run in the same trading system as official BTC and ETH contracts, and users can trade them all with a single account.

Second, contracts on HyperEVM can read HyperCore's order book prices, positions and balances in real time, and can also send order instructions to HyperCore. Contracts on other chains can only obtain exchange prices through forwarding by external oracles; on Hyperliquid, contracts and the exchange are in the same chain, so they can call each other directly.

Third, these capabilities have been opened up gradually since 2025, and the ecosystem has filled in step by step. (The timeline is in the table below.)

Time Event What it means 2023 Hyperliquid mainnet launch The exchange builds its own chain February 2025 HyperEVM goes live External programs can read prices and best quotes July 2025 CoreWriter upgrade; Kinetiq launches kHYPE External programs can send instructions to HyperCore October 2025 HIP-3 goes live Third parties can open perpetual markets May 2026 HIP-4 goes live Hyperliquid launches prediction markets August 2026 HIP-4 opens to third parties Third parties can open prediction markets September 2026 Payward (Kraken's parent company) announces it will deploy a HIP-3 market through its subsidiary Bitnomial The first time a US licensed institution plans to plug into HIP-3 October 10, 2026 Papertrade goes live An external product that borrows only Hyperliquid's prices October 26, 2026 Hyperliquid publishes the HIP-3 whitelist, naming Payward the first CFTC-regulated deployer HIP-3 can set an access whitelist, giving regulated markets an interface October 29, 2026 ICE takes a stake in Trade[XYZ], planning a US market, ICE[XYZ] A Wall Street exchange plugs into Hyperliquid's matching November 5, 2026 Hyperliquid Strategies (PURR) applies to become a futures commission merchant Filling in the gateway for US users to enter HIP-3 November 9, 2026 Elysium mainnet goes live The first L2 settling to HyperEVM; later upgrades will support reading the entire order book

Fourth, the three cases from the past month are highly representative, marking that Hyperliquid's infrastructure is basically in place and the ecosystem has entered an application-expansion phase:

• Papertrade is deployed on HyperEVM, reads only HyperCore's mid price, and its trades are absorbed by its own liquidity pool;
• Trade[XYZ] opens markets directly on HyperCore through HIP-3; ICE's planned US market is also based on HIP-3, using Hyperliquid's matching engine;
• Elysium is an L2 that settles to HyperEVM, reads HyperCore's entire order book through its own nodes, and will later support placing orders directly.

These three cases correspond to three depths of external integration with Hyperliquid: borrowing prices, borrowing matching, and building a separate chain for the order book. The next three sections follow that order.

2. Price-layer integration: Papertrade

Papertrade launched on October 10, is deployed on HyperEVM, and has only two markets, BTC and ETH. It does not place orders on Hyperliquid; it reads Hyperliquid's mid price once when opening a position and once when closing, and all profit and loss is settled against a single USDC pool — put plainly, users are betting against the pool.

It has two selling points: first, leverage of up to 1,000x; second, losing is mining. The PAPER token has no pre-mine and is not allocated to the team or investors; it is minted only when a losing position is closed or liquidated, and staking PAPER earns a share of the pool's returns. By design, the people who lose money gradually become shareholders of the house.

2.1 Rules and token allocation under a "fair launch"

Papertrade bills itself as a fair launch, but a close look at the rules and the data shows that ordinary users have a hard time getting an edge.

First, the rules are unfriendly to retail. Positions must be at least $10,000, margin cannot be added after opening, orders to open and close are queued with priority given to large orders, and profits are also discounted. Researcher @xizhe_chan analyzed 134,000 profitable orders and found that the smaller the price move, the larger the haircut:

Second, the supply was taken by large players who entered early. The earlier you lost money, the more PAPER you received: at launch, losing $1 minted 100 tokens; ten hours later only 40; by October 17, only about 12. Large players typically used two accounts to go long and short at the same time — one side losing money to mine tokens while the other recovered the principal — so the cost was only about 30% of being directly liquidated, and dividends then recouped it quickly:

Holding rank First 12 hours, dividends / cost 30-day extrapolation No. 30 257% 371% No. 100 224% 328% No. 300 178% 269% No. 500 59% 130%

By October 20, the 1,000 wallets holding the most tokens held 88% of PAPER and took 91% of the dividends.

Third, the rules were changed ten days after launch. After Paragon and Aster listed PAPER pre-market contracts one after another, Papertrade announced that PAPER could only be staked for dividends, and could not be withdrawn or sold. The team's reasoning was that if outsiders could short PAPER, an attacker could manipulate the price to drain the pool while shorting PAPER for profit. But many people had deliberately lost money to mine tokens precisely because they expected to be able to sell PAPER later; once the rule changed, that expectation was wiped out entirely.

The market's reaction was direct. Papertrade's daily revenue fell from a peak of about $25 million in its first week to $178,000 on October 22, and TVL dropped by more than 70%:

2.2 Takeaway: the HyperEVM ecosystem's first native application

Papertrade's hype was short-lived, but it offers three lessons for the Hyperliquid ecosystem.

First, HyperEVM now has a genuinely native application. Previously, the lending and DEX applications on HyperEVM were mostly forks of protocols from other chains, whereas Papertrade is built entirely on HyperCore's prices and would not exist without Hyperliquid.

Second, the barrier to building trading products on Hyperliquid has dropped sharply. Papertrade has no market makers and no order book, relying only on reading Hyperliquid's prices, and its notional volume passed $1 trillion within a week of launch. External teams can launch new trading categories without building their own liquidity.

Third, Hyperliquid's prices themselves have become a core resource. People used to think a chain's core asset was block space; Papertrade showed that contracts on HyperEVM can read the real-time prices of Hyperliquid's order book directly, without relying on external oracles for forwarding — a more native onchain source of prices:

Of course, the more prices are relied upon, the greater the pressure to guard them. On the night Papertrade launched, someone pushed the ETH price on Hyperliquid with a large order while opening a large position on Papertrade for profit; this kind of price manipulation is an issue that later HyperEVM applications need to weigh carefully.

3. Matching-layer integration: Trade[XYZ] and Wall Street

Papertrade borrows prices; what Wall Street (ICE) wants to borrow is the entire trading system. Trade[XYZ] is the largest deployer on HIP-3, opening perpetual markets for US stocks, indices, crude oil and FX directly inside HyperCore. It uses Hyperliquid's matching engine and margin system, with prices brought in from outside, and its S&P 500 contract has obtained formal authorization from S&P Dow Jones.

3.1 One year after launch: scale expansion and market concentration

HIP-3 is an open mechanism Hyperliquid introduced in October 2025: any team that stakes 500,000 HYPE can open its own perpetual futures market on HyperCore. A year after launch, HIP-3 has traded about $665 billion in total, and its share of Hyperliquid's perpetual volume has risen from 0.2% to 51.3% in July this year. What drove its growth was a series of market episodes: gold and silver early in the year, crude oil that had nowhere to trade on weekends during the March Iran conflict, and the SpaceX listing and memory-chip stocks in June and July.

What gets traded keeps rotating as well: in March, commodities accounted for 64% of HIP-3 volume; by July, single stocks and Pre-IPO contracts had reached 62%, and on the day SPCX listed, its contracts traded $1.4 billion, equal to 30% of that day's total HIP-3 volume. After July, HIP-3's share fell back to around 30%, with more than 70% of trading still coming from official native markets.

Concentration has barely changed. As the first third-party market launched on HIP-3, Trade[XYZ] has long held a share of around 90%, rising to about 97% in October. Its advantages mainly lie in listing speed and liquidity:

• Fast listings that capture hot themes. HIP-3's new market slots are shared by all deployers, with one auctioned every 31 hours; once a slot is won, the deployer decides which asset to list. Trade[XYZ] is well funded — of the 23 slots auctioned in August it took 8 on its own — and it deploys quickly after winning: the median time from registering a new market onchain to the first trade is just 3.3 days, 65% of markets go live within a week, and 47% within three days.
• Good liquidity, tradeable from day one. HIP-3 markets do not share liquidity with Hyperliquid's official markets; each market has its own order book, and depth has to be built by the deployer bringing in market makers. Trade[XYZ] can attract market makers and commit capital, so a new market has narrow spreads and a deep order book from the start. Good liquidity brings traders; more traders make market makers more willing to come; once this loop forms, it is hard for latecomers to break.

On top of that, Trade[XYZ] has strong brand advantages and product credibility. It was built by the Hyperunit team that once laid out Hyperliquid's spot asset infrastructure, and it obtained formal authorization from S&P Dow Jones Indices to launch the first licensed S&P 500 perpetual contract. As a result, although Trade[XYZ] is a third-party deployer, the market sees it as the one most closely tied to Hyperliquid, and to some extent it has become synonymous with the HIP-3 ecosystem.

3.2 From guarding against it to plugging in: Wall Street's three paths

Trade[XYZ]'s biggest selling point is 7×24 trading, which traditional exchanges cannot offer. When US stocks and CME crude oil futures are closed for the weekend, Hyperliquid is one of the few places where these assets can still be traded. During the March Iran conflict, JPMorgan analysts noticed that some traditional traders had moved to Hyperliquid to trade crude oil.

Wall Street's response has also been changing. From March to November, three paths emerged around Hyperliquid, each one closer to it than the last:

Path one: use a centralized exchange to bypass Hyperliquid and fill in 7×24 trading themselves. In March 2026, ICE took a stake in OKX, first launching crude oil perpetual contracts on OKX, then setting up a joint venture with OKX to bring NYSE-tokenized stocks and ICE futures to OKX users. At the same time, ICE and CME told members of Congress they were worried Hyperliquid might manipulate oil prices, and pushed for it to accept CFTC regulation. At this point Hyperliquid was still a rival to be guarded against.

Path two: plug into Hyperliquid directly. At the end of that month, the CFTC allowed perpetual contracts to be listed in the US as futures; the compliance path opened up, and ICE's attitude shifted accordingly. ICE's CEO publicly called this exchange with only 11 employees "bigger than Nasdaq," and said the two sides had talked many times. On October 29, ICE took a stake in Trade[XYZ] and planned to launch the US market ICE[XYZ]: Hyperliquid provides the matching technology, Trade[XYZ] designs the market, and ICE operates the exchange and handles clearing; the plan still awaits CFTC approval. Hyperliquid thus went from rival to ICE's trading service provider.

Path three: hold the token and add a broker channel. Besides exchanges stepping in, Wall Street's ways of plugging into Hyperliquid also include token holders taking a step forward. Hyperliquid Strategies (NASDAQ: PURR), a listed company holding about 38.9 million HYPE, was originally just a $HYPE treasury company that raised money in the stock market to buy and stake the token. On November 5, it applied to become a futures commission merchant, hoping to bring US users into HIP-3 markets. That way PURR both holds HYPE and channels trading volume to Hyperliquid: the more users trade, the more fees go into buybacks, and the $HYPE it holds benefits as well.

As the chart shows, ICE stays at the center, firmly holding benchmark prices, clearing and compliance, while the remaining links are left to partners: OKX handles centralized matching, Trade[XYZ] designs and operates HIP-3 markets, Hyperliquid provides the onchain matching engine, and Hyperliquid Strategies fills in the gateway for US users. In this map, Hyperliquid and OKX occupy the same position, both being trading venues that ICE connects to — one offchain, one onchain. Hyperliquid thus goes from a rival being guarded against to trading infrastructure that Wall Street actively plugs into.

3.3 The division of roles: licensed institutions handle clearing, the chain handles matching

Before ICE, licensed institutions had already approached Hyperliquid. On September 16, Kraken's parent company Payward announced that it would deploy a HIP-3 market through its subsidiary Bitnomial (a CFTC-licensed exchange and clearinghouse), and it later received Hyperliquid's HIP-3 access whitelist, becoming the first CFTC-regulated deployer. But compared with Payward, which comes from the crypto industry, ICE is the parent company of the NYSE; its stake in Trade[XYZ], together with its earlier moves around OKX, is what truly marks the entry of a mainstream Wall Street exchange.

Putting these partnerships together, the logic of the division of labor is clear:

ICE × OKX ICE × Trade[XYZ] Payward × HIP-3 Where matching happens OKX's centralized system Onchain on Hyperliquid Onchain on Hyperliquid What the licensed party does Takes a stake, provides crude oil benchmark prices Takes a stake, operates the exchange, clearing and compliance Deploys the market, clearing and settlement Who it serves OKX's global users US regulated users (via brokers) US regulated users (via brokers) Progress Announced crude oil perpetuals in May Awaiting CFTC approval Awaiting regulatory approval

As the table shows, licensed institutions hold on to the links where they have the greatest edge. In the OKX partnership, what ICE holds is the crude oil benchmark price. In the US market, both ICE and Payward keep clearing and compliance in their own hands. Clearing is the most heavily regulated and highest-barrier link in a traditional exchange: a clearinghouse has to manage client margin and bear default risk, requiring substantial capital, mature risk controls and regulatory licenses, which makes it hard for new entrants to get in. ICE already operates several clearinghouses, and Bitnomial holds both exchange and clearinghouse licenses.

Matching, by contrast, increasingly looks like a standardized service: whoever has the faster engine and better liquidity gets used. On an earnings call, ICE's CEO also positioned these perpetual markets as a supplement to its futures business.

For Hyperliquid, this means onchain matching is beginning to be adopted as infrastructure by licensed institutions, and more institutions are likely to follow the same path.

The problem lies here too. A regulated US market must do KYC and set entry thresholds, which is exactly what HIP-3*'s whitelist is designed for. Even if such a market runs on Hyperliquid's matching engine, only US clients and market makers that pass admission can trade in it; the many offshore traders Hyperliquid already has cannot get in, and depth has to be built up again. In other words, what Wall Street takes away is Hyperliquid's matching technology; its most valuable liquidity network may not come along.

4. Order-book-layer integration: Elysium

Papertrade borrows prices, Wall Street borrows matching, and Kinetiq goes a step further: it builds a separate chain, Elysium, alongside Hyperliquid, dedicated to plugging into its order book.

4.1 Elysium project overview and market expectations

Elysium is built by Kinetiq, the largest staking protocol on Hyperliquid. It was first announced on X on August 24, opened its testnet on September 22, and plans to launch its mainnet on November 9. It is built on Arbitrum's tech stack, settles to HyperEVM, uses $HYPE to pay fees, and targets block times of about 100 milliseconds.

Discussion around it roughly divides into three voices:

• The bulls are betting on $KNTQ. Half of Elysium's fee revenue will be used to buy back and burn Kinetiq's token $KNTQ. On the day of the announcement $KNTQ rose about 30%, and on October 28, after gaining nearly 48% over two weeks, it hit an all-time high of $0.4547.

Note: Elysium does not currently have a token of its own, and related trading revolves mainly around the token of its developer Kinetiq, $KNTQ. It trades mainly on Hyperliquid spot (apart from Kraken and MEXC, mainstream centralized exchanges have not listed it), and there is also a version bridged to Base via Chainlink that can be traded on EVM chains.

• The ecosystem camp values its experimental significance. Some community views hold that HyperEVM has long lacked strong promotion from Hyperliquid itself and that the ecosystem looks somewhat quiet; Elysium is an attempt by a team inside the ecosystem to fill the gap on its own. Kinetiq has both capital and expansion capability, and by bringing in a batch of leading applications to integrate on day one, it can bring a wave of new attention to the HyperEVM ecosystem.
• Skeptics are watching the real data. Some community users calculated that the testnet processed a cumulative 30 million transactions in about three weeks but generated only about 269 HYPE in total fees over 30 days; scaled to the same activity level, mainnet would have about $11,000 a month to spend buying back $KNTQ — far short of KNTQ's fully diluted valuation of about $350 million, and all the more reason to doubt Kinetiq's claim that "Elysium will bring Hyperliquid hundreds of millions of dollars in revenue every year." More interesting still: the lock-up on the KNTQ team's and investors' tokens expires on November 27, shortly after mainnet launch, which will bring another round of sell pressure.

All three voices point to the same thing: what the market is betting on right now is expectations, not revenue, and those expectations will have to be tested by real trading after mainnet launch.

4.2 Hyperliquid's spot trading gap: new tokens can't get onto HyperCore, and HyperEVM isn't fast enough

What Elysium aims to fix is Hyperliquid's long-standing spot weakness. Hyperliquid has brought its perpetual futures into the global top tier, yet spot trading volume has consistently lagged, and the problem lies at two levels:

• New tokens can only get started on HyperEVM. HyperCore's spot order book is suited to trading mature assets; for a new token to get there, it first has to bid for a listing slot and needs professional market makers to keep quoting. Newly issued tokens cannot do that, so they can only trade on launchpads and AMM pools first, and those applications can only be deployed on HyperEVM.
• HyperEVM is also deliberately rate-limited. HyperEVM and HyperCore run on the same chain and are processed by the same set of validators. To keep application computation from crowding out the computational resources used for trading, Hyperliquid has capped HyperEVM's throughput: small blocks come about once a second, and applications can only read the best bid/ask level of the order book. That is enough for lending and staking, but it cannot support professional market-making pools that need to refresh quotes many times per second.

The result is that new assets struggle to grow within the Hyperliquid ecosystem. Kinetiq points out that the spot volume handled by professional market-making pools on Solana far exceeds that of Hyperliquid's spot market.

4.3 Elysium's solution: speed up applications and pave the way for new assets

Step one, add speed. Elysium's headline is high speed, with a processing-capacity target of about 100x HyperEVM's, but it is worth seeing clearly where the speed lies: its benchmark is HyperEVM, not HyperCore. Elysium targets block times of about 0.1 seconds, while HyperCore's median latency from order to confirmation was already only about 0.2 seconds — the trading engine was never slow.

Speed does not come without a cost. Compared with HyperEVM, Elysium can read a more complete order book, but the trustworthiness of that data is discounted.

HyperEVM Elysium Block time Small blocks about 1 second, large blocks about 1 minute Target about 100 milliseconds Order book readable Best bid/ask level All depth readable Who guarantees order book data Hyperliquid consensus, synchronized with HyperCore Provided by Elysium's own nodes, guaranteed by the sequencer Placing orders to HyperCore Supported, submitted through consensus synchronization Supported, handed over through a dedicated channel Security model Shares validators with HyperCore Initially a single sequencer produces blocks; validators require permission

In other words, Elysium trades trust for speed and data: the prices HyperEVM reads are guaranteed by Hyperliquid consensus, while the entire order book Elysium reads comes from nodes it runs itself, without onchain verification. Hyperliquid itself has also listed raising HyperEVM throughput as a future direction; Elysium is betting that the official upgrade will not arrive that quickly.

Step two, open up the return path for new assets. With a faster environment in place, Elysium has designed a route for new assets from birth back to Hyperliquid:

Specifically:

• New tokens are first issued on Elysium's launchpad and in ordinary AMM pools, capturing the earliest trading;
• Once trading is active and a certain scale has formed, they enter Elysium's professional market-making pools, where market makers provide deeper quotes;
• After that, qualifying assets are upgraded to HyperCore's spot order book, and finally listed as HIP-3 perpetual contracts.

Under this route, Elysium handles incubation and Hyperliquid takes on mature assets, with trading volume ultimately returning to HyperCore. If this path works, Hyperliquid effectively gains an additional, stable source of new assets.

This is also Kinetiq's own way out. Its staking business has peaked, with TVL more than 60% below its October 2025 high, so building Elysium turns Kinetiq from a staking protocol into the operator of a chain, and also finds a new source of revenue for $KNTQ.

Overall, for Hyperliquid, Elysium fills the gap in spot and new assets; for Kinetiq, it opens a second growth line beyond staking. Here, the interests of the two are temporarily aligned.

4.4 What Elysium really is: turning order book access into a chain

Although Elysium is a new chain, what it actually sells is not block space but the ability to plug into Hyperliquid's order book. Put it next to Papertrade and this becomes clear:

Papertrade Elysium Where it is deployed An application on HyperEVM An independent L2 settling to HyperEVM What it reads from Hyperliquid Best-level mid price The entire order book Whether it places orders on Hyperliquid No, trades are absorbed by its own liquidity pool Plans to support direct order placement What it brings to $HYPE Almost nothing Gas demand, plus trading volume that may flow back

From borrowing a single quote level to wanting to read the entire order book and place orders directly, outside dependence on Hyperliquid's order book is deepening. But all of this is still a promise: performance has not been verified on mainnet, whether liquidity can gather also depends on whether Hyperliquid itself accepts it, and the bulk of onchain revenue goes to $KNTQ rather than $HYPE — how Elysium actually pans out remains to be seen.

5. Hyperliquid's changing role: from exchange to trading infrastructure

Taking the previous three steps together, external teams plug into Hyperliquid in different ways, but they share one thing: they no longer see Hyperliquid as merely a trading platform. Hyperliquid's role is shifting, and within trading infrastructure it is gradually taking on three functions:

Role Meaning Examples Price source External products call its real-time prices directly, covering hours when traditional markets are closed Papertrade; weekend US stock and crude oil contracts Matching provider Licensed institutions use its matching system and take on clearing and compliance themselves ICE, Hyperliquid Strategies, Payward Listing destination New assets are incubated outside and migrate to its order book once mature Elysium, HIP-3 deployers

As a price source, it is quoting markets that are closed. Papertrade dares to build a trading platform on Hyperliquid's prices alone, on the premise that those prices are active and credible enough. That credibility has already extended beyond crypto assets: when US stocks and crude oil are closed at the weekend, Hyperliquid is one of the few places still quoting; before companies such as SpaceX listed, Pre-IPO contracts were already trading, and in hindsight their performance came fairly close to the opening, something Trade[XYZ] also cited in comments submitted to the US SEC.

As a matching provider, it leaves compliance to licensed institutions. In ICE's plan, matching stays on Hyperliquid, while clearing and client onboarding go to ICE and futures brokers; Hyperliquid Strategies applied for futures commission merchant status precisely to bring US clients in compliantly; the official side is also preparing HIP-3 markets with entry thresholds, with independent operators handling compliance. The chain itself does not do compliance; licensed institutions interface with regulators one layer above, so an offshore onchain exchange can enter the US market without changing itself.

As a listing destination, it takes on new assets that grew up outside. The new-asset path Elysium has designed ends at HyperCore spot and HIP-3 perpetual contracts; HIP-3 deployers bid every 31 hours for one listing slot, and what they are competing for is the chance to open a market on Hyperliquid's order book. Peripheral teams build the entry points and incubate assets, which migrate to Hyperliquid for trading once mature.

These three functions rest on the same premise: the depth and activity of Hyperliquid's order book. External teams are willing to build businesses around it precisely because of this; once the order book loses its edge, these three functions will waver as well.

This is also the fundamental difference between Hyperliquid and the chains other exchanges have built. The chains of companies such as Robinhood and Circle mainly carry tokenized assets, with matching still completed inside their own systems, so external teams have no way to call them; Hyperliquid places the order book itself onchain, so that its prices, matching and liquidity can all be used from outside.

— This is consistent with Jeff Yan's vision: speaking at TOKEN2049 in October, he said Hyperliquid wants to become open infrastructure that all kinds of financial products plug into, rather than competing with front-end platforms, so that developers can use its markets and liquidity directly without building their own matching and clearing systems.

6. The value of $HYPE: as the ecosystem expands, who benefits?

More and more teams are plugging into Hyperliquid and the ecosystem is expanding fast, but the gains from that expansion do not automatically flow to HYPE. To see this clearly, we first need to understand where $HYPE's support comes from, and then look at what the new businesses and the middle layer each get.

6.1 What supports the $HYPE price: fees, buybacks and DAT treasuries

$HYPE does not correspond to equity in any company, and protocol revenue is not distributed directly to holders. Its price support is built on Hyperliquid's business: how much the platform can earn, and how that revenue converts into demand for $HYPE. At present, this support comes mainly from three sides:

• Fee revenue is the foundation. The fees users generate by trading on Hyperliquid are its main source of income. In 2025 Hyperliquid's full-year perpetual futures volume was about $2.9 trillion, and in the 30 days to October 28 this year, revenue attributable to HYPE holders was about $63.94 million, ranking first among all protocols. From October, the interest generated by the USDC that users deposit has also become a new revenue source, and one unrelated to trading volume.
• Buybacks turn revenue into buying pressure. About 97% to 99% of Hyperliquid's net fees go into the assistance fund to keep buying back HYPE on the market, and 90% of USDC interest within the ecosystem is also used for buybacks. Under this model, the higher the revenue, the more buybacks, so trading activity translates directly into buying pressure for $HYPE.

It should be noted that the scale of $HYPE buybacks is considerable. Since June this year, Hyperliquid has spent between $38 million and $74 million a month on buybacks, and as of October 13 the assistance fund had accumulated more than 48 million HYPE at a cost of about $1.365 billion.

• DAT treasuries are big buyers outside the protocol. Nasdaq-listed Hyperliquid Strategies (NASDAQ: PURR) is a digital asset treasury company dedicated to holding $HYPE; it raises money in the stock market to buy $HYPE, and its holdings grew from 12.5 million tokens at its December 2025 listing to about 38.9 million by October 28, at an average cost of about $56, all of it staked. This buying is unrelated to protocol revenue and depends on how much it can raise in the stock market.

6.2 How the new businesses distribute value: middle-layer diversion and flows back to HyperCore

$HYPE's buyback money comes from fees on HyperCore, and only trades executed on HyperCore turn into buying pressure for $HYPE. How much value the new businesses can capture for $HYPE therefore depends on two things: where trades are executed, and how revenue is distributed.

By that standard, the value created by the new businesses goes in two directions: part of it returns to HyperCore along with trading volume, and part stays in the middle layer that builds these businesses — and for now the latter accounts for a not-insignificant share:

How it plugs in Where trades execute Who mainly gets the revenue HIP-3 markets HyperCore Split 50/50 with the deployer, and fees on most markets are cut to a tenth Papertrade Its own liquidity pool $PAPER stakers Elysium On the Elysium chain; assets enter HyperCore once mature Half buys back $KNTQ, the rest goes to developers and Kinetiq; $HYPE only gets gas demand ICE[XYZ] Hyperliquid matching, possibly using a separate order book Still pending approval; the revenue split has not been disclosed

HIP-3 is the only business that has already brought a large amount of trading back to HyperCore, but the revenue has not come back in step. To attract deployers and users, most markets are in growth mode with fees cut sharply, and the remaining fees still have to be split evenly with deployers, so its share of volume is far higher than its share of fees:

In addition, the volume of the new businesses is highly concentrated in the hands of a few teams, and so is the revenue it generates. Trade[XYZ] alone accounts for more than 90% of HIP-3 and takes half of its fees. To some extent this is a phase-specific outcome of Hyperliquid's expansion: the official side encourages third parties to enter with fee cuts and revenue sharing, growing the market first.

Overall, Hyperliquid is trading margin for expansion. In the short term the new businesses contribute only limited value to $HYPE, and how much they ultimately bring depends on how much trading volume the middle layer can carry back to HyperCore.

7. Conclusion: the order book is Hyperliquid's most core asset

Papertrade, ICE and Elysium each plug into Hyperliquid in a different way, yet all of them want the same thing: its order book. Papertrade reads the order book's prices, ICE uses the matching engine behind the order book, and Elysium wants to read the entire order book and place orders directly. Even Elysium, an L2, serves a different purpose from the L2s on Ethereum. Ethereum's L2s exist to offload mainnet transactions; Elysium exists to plug into Hyperliquid's order book faster and more completely. The value of most public chains lies in block space; what outsiders compete for on Hyperliquid is the order book.

For the order book to be used this way, two conditions must be met:

• First, it is onchain, so external programs can call it directly. The chains of Robinhood and Circle only carry assets, with matching still done inside their own systems, leaving nothing for outsiders to call.
• Second, it is deep enough and open 7×24, so that anyone can take part — which is why weekend crude oil and pre-listing SpaceX both formed prices here first. It is because of the second point that Wall Street noticed Hyperliquid. After the CFTC opened up perpetual contracts in May, ICE shifted from pushing to regulate Hyperliquid to taking a stake in Trade[XYZ], which opens markets on top of it.

But the order book being relied on from outside does not mean Hyperliquid benefits automatically. At least two problems remain unresolved.

First, its risk and reward are asymmetric. External products do not have to pay to read Hyperliquid's prices, yet once large amounts of capital settle at those prices, manipulating the price becomes profitable — something that already happened on the night Papertrade launched. The larger the scale of external references, the greater the manipulation pressure on Hyperliquid's order book, while the revenue belongs to the external products.

Second, compliance slices liquidity apart. ICE and Payward use Hyperliquid's matching technology, but regulated markets must set entry thresholds, and offshore traders and market makers cannot get in. What is most valuable about Hyperliquid is its unified liquidity, and that is precisely the part regulated markets find hardest to inherit. Matching technology can be exported; liquidity may not come along with it.

Both problems will ultimately show up in the value of $HYPE. $HYPE's value comes from HyperCore's fees and buybacks, and only trades executed on HyperCore count. Right now Hyperliquid is cutting fees, sharing revenue and opening up price reads, trading margin for more integrators, and a considerable share of revenue stays with Trade[XYZ], Kinetiq and PAPER stakers. This is a strategy of expanding first and recouping later; whether it can recoup depends on how much trading volume these integrators ultimately carry back to HyperCore.

So two things are key to Hyperliquid's next stage: whether it can price the use of its order book and charge for it, and whether it can keep liquidity unified between regulated and offshore markets. If it achieves both, the order book it has opened up will become its hardest advantage to replace. If it does not, it may end up merely supplying the underlying engine of prices and matching for others — and the livelier the ecosystem, the more value leaks away.

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