This edition of the newsletter analyses Hyperliquid which has emerged as a breakout decentralized application, starting as a perpetuals DEX in June 2023 and achieving over $1.8 trillion in trading volume while representing 4.8% of centralized exchange trading activity. The success of their PerpDEX led to the launch of HyperEVM, an EVM-compatible L1 blockchain that hosts various complementary dApps including money markets like Hyperlend ($340M TVL), DEXs like HyperSwap, cross-chain infrastructure like Unit, and structured products designed to generate yield for users.
a) Stablecoins are a Platform - New Financial Products
• Simon Taylor argues that stablecoins represent a fundamental platform shift beyond just being "another rail," enabling new financial products with instant settlement that removes traditional constraints like pre-funding credit programs and settlement delays.
• He contrasts the traditional Banking-as-a-Service (BaaS) stack with the emerging stablecoin stack, explaining how stablecoins eliminate settlement constraints while BaaS only removed licensing constraints, creating opportunities for entirely new categories of financial products that were previously impossible to build profitably.
Plus; Kalshi raises $185m at $2bn and FiServ launches FiUSD a stablecoin that may actually make sense.
b) The Great Divergence
• Crypto is experiencing a "Great Divergence" where the industry is maturing beyond its infancy phase, with companies that generate actual revenue starting to significantly outperform those that rely solely on perception and attention-grabbing tactics. .
• The writer contends that while many Layer 2 protocols and applications have been subsidized through grants and airdrops despite having minimal users or economic output, successful products like Aethir, Maple Finance, and Phantom wallet are proving that sustainable business models focused on niche verticals and real revenue generation will increasingly dominate over projects that prioritize social media buzz and speculative token valuations
How revenue drives valuations in web3
a) Infrared Finance
• Infrared has completed ten comprehensive security audits since April 2024 from respected firms like Zellic, Spearbit, Cantina, and Code4rena, with their most recent audit in April 2025, demonstrating their commitment to regular security reviews as they build new features.
• The company emphasizes that security is especially critical on new chains like Berachain due to unique risks from Proof of Liquidity mechanisms and novel protocol interactions, and they maintain transparency by sharing all audit results publicly while ensuring no features are released until fully audited.
b) Safe
• Safe Research has developed "Safe Harbour," a project that moves multisig transaction queuing entirely onchain to eliminate the centralized server dependency that typically exists in multisig operations.
• This approach improves security and availability by ensuring transactions can be proposed and signed as long as the blockchain is operational, removing single points of failure from traditional offchain coordination services.
Hyperliquid, as many of you might know, is one of the breakout decentralised applications (dApps) of this cycle. Hyperliquid did many things right, from having quality founders, to prioritising early adopters, to doing huge buy backs and burns, and more. It almost seems like Hyperliquid can do no wrong.
Hyperliquid, launched in June 2023, started off as a perpetuals decentralised exchange (Perp DEX). Since then, it has amassed a total trading volume of over US$1.8 trillion. Currently, the trading activity on Hyperliquid represents around 4.8% of the aggregated trading volume from centralised exchanges (CEXs).
Hyperliquid’s PerpDEX success spurred the team to launch their own EVM compatible L1, HyperEVM. HyperEVM will host various dApps to provide services that complement Hyperliquid’s PerpDEX, as well as to build out the Hyperliquid ecosystem. Although the chain is still in its infancy, let us take a look at some interesting protocols there.
Money Markets
There are quite a number of money markets on HyperEVM, suggesting high demand for lending/ borrowing services.
Leading the pack is Hyperlend, who has the highest TVL (US$340M at the time of writing) in the vertical as well as across HyperEVM. Hyperlend provides users with clean and simple lending and borrowing services, and other additional yield strategies to boot. Some interesting money markets to pay attention to include Felix and Hyperdrive. Felix is a Collateralised Dept Position stablecoin protocol, featuring $feUSD. Users can deposit collateral to borrow $feUSD.
On the other hand, Hyperdrive is a money market that is looking to tokenise Hyperliquidity Provider (HLP), Hyperliquid’s shared liquidity vault which is used to execute market-making and liquidation strategies. This would allow users to take a leveraged HLP position via looping, or borrow against HLP by using it as collateral, unlocking more interesting strategies as a whole.
HyperSwap
Every chain needs a quality DEX, and HyperSwap might just be what HyperEVM needs. It is currently the leading DEX on the chain, adopting Uniswap V2’s AMM as well as Uniswap V3’s concentrated liquidity pools.
Unit
Unit is a key piece of infrastructure for HyperEVM, allowing users to send major spot assets such as $BTC, $ETH, $SOL and $FARTCOIN from their native chains to Hyperliquid, improving liquidity and connectivity across chains.
Consumer dApps
Every chain needs a few good consumer dApps to appeal to the average user.
LiquidLaunch, a pumpfun-esque token launchpad is a good example. Another interesting dApp is Fan App, who is building a social trading platform where users can copytrade, and get real-time data of other users’ trades.
Structured Products
Hyperbeat, Upshift and Liminal are products that aim to generate yield off user’s deposits by leveraging automated DeFi strategies, hedging strategies etc. For a chain that is built around a PerpDEX, structured products may have a good product market fit, as PerpDEX users may be drawn to these products that help to generate yield off users’ idle assets, maximising returns.
Concluding thoughts
It is early days for HyperEVM. Many dApps are still in their beta launches and a work-in-progress. Many of them also have ongoing points programmes, which makes this a great opportunity to explore the ecosystem and support these dApps as well.
Hyperliquid.
*Disclosure: The information provided on this newsletter is for general informational purposes only and does not constitute professional nor investment advice.
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