Hyperliquid, the No.1 Decentralized Futures DEX... Why It's Called 'On-Chain Binance' [Hwang Doo-hyun's Web3+]

Hyperliquid Emerges as a Leader in the Futures DEX Ecosystem

Futures DEX Market Share Approaches 50% as of the 15th

Introduction of Order Book Familiar to Traditional Financial Investors

"Combining the Advantages of DEX and CEX as 'On-Chain Binance'"

Layer 1 (L1) blockchain Hyperliquid (HYPE) is gaining attention as the next-generation project leading the decentralized exchange (DEX) ecosystem. It has been evaluated for improving transaction speed and fees compared to centralized exchanges (CEX) like Binance, and has risen to the top in futures DEX market share.

According to DeFiLlama data, last year's cumulative futures trading volume on DEX surpassed $300 billion for the first time, reaching an all-time high. Notably, Hyperliquid's perpetual futures DEX accounted for about 80% of last year's cumulative DEX futures trading volume, achieving remarkable results.

As of the 15th (local time), Hyperliquid's futures DEX market share stands at 50%, ranking first, with a gap of about 44% from the second-place futures DEX 'Jupiter'. In December last year, it also ranked 26th globally in 24-hour trading volume, surpassing CEXs Huobi and KuCoin.

Crypto asset data analysis firm Messari stated, "Hyperliquid is growing at an incomparable rate to other perpetual futures exchanges," and predicted, "It is likely to establish itself as the on-chain Binance, setting a new standard in the decentralized finance (DeFi) market."

Hyperliquid Resolves DEX Drawbacks, Aiming to Become 'On-Chain Binance'

Hyperliquid is an 'futures trading specialized' L1 blockchain designed to compete with CEXs, which account for most of the crypto asset liquidity. It features the introduction of the Central Limit Order Book (CLOB), a trading execution system used in CEXs.

Most DEXs adopt an Automated Market Maker (AMM, a model where prices are determined according to specific formulas) as their trading execution system. AMM was introduced to solve the slow processing speed and high transaction fees of DEXs and to secure liquidity, but unlike the order book where sellers and buyers must directly complete transactions, it automatically calculates prices and processes transactions through smart contracts. This acted as a barrier to entry for traditional financial investors familiar with order books, ultimately leading to a lack of DEX trading liquidity.

Some DEXs have already adopted the order book method familiar to traditional financial investors to attract traditional financial liquidity. However, the drawbacks of DEXs, such as network fees, signatures, and slow processing speeds during transactions, still provided a less convenient user experience compared to CEXs. This was pointed out as a major reason why funds did not actively move from CEXs to DEXs.

To solve these problems, Hyperliquid developed its own Layer 1 optimized for order book trading, capable of processing over 2 million transactions per second. Currently, Hyperliquid's mainnet offers a latency (time taken for data transmission) of less than 1 second and processes an average of 100,000 to 200,000 orders per second. This is about 8 times higher than another order book-based DEX, 'Injective'.

The ease of creating a trading account through an email account and exemption from network fees are also cited as strengths unique to Hyperliquid. Dispread's research stated, "Through various features, Hyperliquid has implemented a user experience on DEX comparable to CEX," and evaluated, "It is expected to be a project that will attract CEX-only users to DEX, which existing blockchain projects could not easily achieve."

Crypto asset analysis company Populus also analyzed, "Based on its outstanding performance, Hyperliquid has earned the nickname 'On-Chain Binance' and is receiving significant attention in the market," and predicted, "Hyperliquid will aim not only to remain a trading platform but to become the mecca of on-chain finance."