Whether it is on-chain derivatives, DeFi, or DEX decentralized exchanges, these fields have long been overcrowded and the competition is suffocating. However, Hyperliquid, which has only been open for half a month, has attracted the attention and hot spots of the entire industry with its actual candlestick charts. In a short period of time, the price has risen from 2 US dollars to 29 US dollars, attracting countless people to chase after it.
What is the logic behind it? Is this a simple technological innovation craze, or is there some kind of deep-seated driving force behind it? Let’s put aside all our arrogance and prejudice and dig deep into the bottom to find out why this platform has quickly become the focus and whether it will become the next meme token maker.
What is Hyperliquid and what makes it different?
Hyperliquid is a decentralized perpetual contract trading platform. Compared with the familiar GMX and dYdX, it is not just another "substitute". It brings about technical and model disruption, solving the common pain points of DEX: slow transaction speed, high fees, and poor transparency. Especially in derivatives trading, its advantages are more obvious.
The following are its core features:
Decentralized order book perpetual contracts
Hyperliquid abandoned the AMM (Automated Market Maker) model of traditional DEX and adopted the order book model, which is more like the trading method of the traditional market. This method is not only efficient, but also accurate in matching.
Self-developed high-performance L1 chain
Unlike platforms such as GMX and dYdX that rely on Ethereum and Arbitrum, Hyperliquid has its own independently developed high-performance L1 public chain. It is designed for low-latency, high-frequency transactions, ensuring that every transaction can be completed instantly with almost no delay, truly achieving "fast and stable".
Zero gas bill
Hyperliquid reduces gas fees directly to zero. For DeFi users, this improvement is revolutionary. You can trade without restrictions without worrying about "losing money" due to gas fees.
Full chain transparency
Every transaction is recorded on the chain, which is open, transparent and fully verifiable. This not only improves trust, but also eliminates black box operations and provides users with a sense of security.
Innovative smart vault mechanism
Hyperliquid supports users to create personal "vaults" and allows other users to deposit funds into these vaults and copy the trading strategies of the vault owners. In simple terms, the vault mechanism is like "experts leading orders", and the experts can also take 10% of the profits.
To summarize the advantages of Hyperliquid:
Fast speed and low cost : self-developed L1 chain and zero gas fee make transactions more convenient and provide an excellent experience.
High transparency : All transaction data is public to prevent black box operations.
Innovative and flexible : In addition to supporting perpetual contracts, it also provides advanced features such as take profit and stop loss (TP/SL) and time-weighted average price (TWAP) to meet the needs of advanced traders.
Dutch Auction: meme launches new gameplay
Hyperliquid’s meme launch mechanism, the Dutch Auction, provides a new path for the resurgence of memes.
What is a Dutch auction? In layman's terms, a Dutch auction is a "reverse auction": it starts at a high price and gradually decreases over time until someone bids. At Hyperliquid, a "listing quota" is auctioned every 31 hours. The price of this quota is determined by the auction, and the starting price is usually twice that of the previous round.
Why is this attractive to memes? Because of scarcity! There is only one spot every 31 hours, which is a great opportunity for any small-cap project or active community to be exposed and gamble. Even those unknown small currencies, as long as the community enthusiasm is high enough and the ticker name is eye-catching enough, have the opportunity to ignite market heat through the Dutch auction.
Taking the recent auction as an example, the price of the quota has soared to 100 WU (about 100,000 US dollars) , and this is just the beginning. It is this scarcity and competition mechanism that make more projects willing to spend money to fight for a chance to "break out of the circle". In this way, small-cap meme coins can not only attract attention through collective bidding, but also become the focus of the industry.
Super-fast capital influx: the market's hot money star-making factory
From January to December, Hyperliquid's cumulative trading volume soared from $14 billion to $820 billion , an increase of more than 50 times. The number of users also increased from 25,000 to 244,000, nearly tenfold.
The speed and scale of this capital inflow has a direct impact on:
Liquidity surge : The influx of a large amount of funds has continuously increased trading depth and market heat, providing fertile soil for the development of memes.
Explosion of small-cap projects : After obtaining listing quotas through the Dutch auction, small projects can quickly gain attention with the help of the platform's popularity and complete capital accumulation and community expansion in a short period of time.
Hyperliquid is now like a meme token-making machine, pushing “small but beautiful” projects to a bigger stage.
How to get involved with Hyperliquid?
Method 1: Directly participate in spot projects (meme coins)
A large number of meme projects have been launched on Hyperliquid. Some of these projects usually have a lower market value but an active community atmosphere. If you prefer low risk, you can choose to participate in these spot projects and find potential projects driven by hot money.
Method 2: Participate in the Dutch auction and seize the opportunity of the internal market
If you have a higher risk appetite, you can use your own investment research strategy to choose the relevant memes that are auctioned by the Dutch auction mechanism, which is held every 31 hours. After the auction is successful, your tokens will receive trading support and community exposure from Hyperliquid.
Risks and recommendations
Market risk: Participating in Hyperliquid's auction means you may encounter some "dog coins" with low market capitalization and average community activity. Some coins may have problems such as pull-ups and manipulation, and even the risk of project failure. Especially when the auction fee rises to 100WU, many small projects may not have enough funds to cover the listing fees, and the quality of the project may not be so guaranteed.
Liquidity risk: Since the platform has a limited number of listings and only one opportunity every 31 hours, small projects with low liquidity may fall into a situation of drastic price fluctuations.
Participation logic: After some project parties obtain quotas through lower auction fees, they will use "pull-up" means to increase prices, thereby bringing higher handling fees and trading volumes. However, if the project does not have strong market support or substantial value, it may lead to a crash or "Rug Pull" (running away).
Recommendation: For beginners or users with less funds, it is recommended to participate in Dutch auctions with caution. You can first pay attention to some existing and active meme projects to observe their market performance and community dynamics. When choosing whether to participate in the auction, you must have sufficient understanding and judgment to avoid blindly following the trend just because of the market enthusiasm.
Don't follow the crowd blindly, stay calm
Hyperliquid is undoubtedly a shining star in the DeFi track. With its unique Dutch auction mechanism, extremely fast transaction experience, zero gas fees and decentralized transparency, it has quickly attracted a large amount of funds and users and has become the focus of market attention. As a "meme token manufacturing machine", it is not only a new gameplay craze, but also a market response brought about by a full understanding of the platform's functions and mechanisms.
However, the influx of hot money does not mean that all projects are worth blindly following. Especially in the face of such a complex market environment, you need to keep a clear head. The market is always right , and you can only make rational decisions based on a full understanding of the platform, project and market risks. The so-called "listing fee" auction, high-quality shells, and the outbreak of low-market-value projects are tempting, but the risks hidden behind them are far greater than we imagined.
Don’t be fooled by the so-called “beautiful narrative” and avoid blind FOMO (fear of missing out) . You must have clear judgment and understand the underlying logic behind each operation.
