Skip to main content

HyperLiquid

Unlike AMM‑based DeFi on Ethereum, HyperLiquid implements a native order‑book exchange on its own chain. This structure avoids AMM‑specific MEV issues such as sandwich attacks at the root. With high throughput and low fees, it is a notable candidate for next‑generation DeFi infrastructure.

official website: https://hyperfoundation.org/

How it works​

Order‑book model​

  • AMMs like Uniswap use the constant‑product model; prices depend on pool reserves, so large swaps and frontruns can manipulate price and enable sandwiches.
  • HyperLiquid, by contrast, offers a native order book similar to a CEX.
    • Price is set by the book, not a pool curve.
    • A matching engine processes trades, leaving less room for reorder‑based extraction.

Custom L1 chain​

  • Uses a dedicated PoS‑based BFT consensus rather than a general‑purpose chain.
  • Achieves tens of thousands of TPS, targeting CEX‑like on‑chain execution.
  • Fees (gas) are near zero, which avoids bot‑driven gas wars.

ref: HyperLiquid docs

Why it’s fast​

  • BFT consensus provides fast finality with minimal latency.
  • Parallel‑execution architecture improves scalability.
  • Tight integration of the order book with the chain improves efficiency.

Coverage and limits​

Strengths​

  • Avoids AMM‑specific sandwich mechanics.
  • Greatly limits in‑block reordering opportunities.
  • High throughput and low fees mean typical users are less disadvantaged vs. attackers.

Limits​

  • Risks like liquidation‑targeting and spoofing remain possible.
  • Some may perceive more centralization vs. fully on‑chain AMMs.
  • If books are thin, slippage can still occur.

Outlook​

  • Sometimes called an “on‑chain CEX,” it’s a next‑gen DeFi model that addresses AMM weaknesses.
  • With low gas and high throughput, it leads competition among order‑book DeFi (e.g., Sei).
  • Could support derivatives and perpetuals fully on‑chain.
  • By offering a fairer trading environment than typical AMMs, it may attract institutions and HFT participants.

Summary​

HyperLiquid removes AMM‑specific MEV weaknesses at the root. Beyond resistance to sandwiching, it brings performance, fees, and UX closer to CEX standards. It is a strong candidate to shape the future of order‑book‑based DeFi.