Hyperliquid is a decentralized trading protocol designed to replicate the user experience of centralized exchanges while providing a fully on-chain order book for trading spot, derivatives, and prelaunch markets. Built on its own Layer 1 (L1) blockchain, Hyperliquid has attracted over 200,000 users and processed more than $300 billion in cumulative transaction volume. The platform has seen consistent daily trading volumes exceeding $1 billion, with over 8,000 unique traders participating. The protocol allows users to engage in perpetual futures trading with leverage of up to 50x, as well as spot trading through its on-chain order book. The evolution of on-chain trading over the past six years has led to various models, including Automated Market Makers (AMMs), peer-to-pool systems, and hybrid order book-AMM models. Each of these models has its advantages and disadvantages, particularly concerning liquidity provision and price discovery. AMMs, which dominate on-chain spot trading, utilize smart contracts to manage liquidity pools and automate market-making processes. While they enable permissionless trading and asset listing, they often expose liquidity providers to losses due to price slippage and impermanent loss (IL). The passive nature of AMMs means they do not adjust prices proactively, leading to stale pricing that can be exploited by arbitrageurs. In contrast, peer-to-pool derivatives exchanges, like GMX, have seen a decline in trading volumes. These platforms allow traders to interact directly with liquidity pools rather than matching with other traders. While they offer benefits such as consistent liquidity and reduced slippage, they also face risks related to oracle price feeds and potential manipulation. Hyperliquid's architecture is designed to overcome the limitations of existing models by implementing a high-performance consensus mechanism called HyperBFT, which significantly enhances throughput and reduces latency. This allows the platform to process millions of orders per second, providing a user experience comparable to centralized exchanges. The Hyperliquid team, composed of experienced engineers from prestigious institutions, initially focused on proprietary crypto market making before transitioning to DeFi. Their goal is to create a seamless trading experience that addresses the shortcomings of existing decentralized platforms. The urgency to develop a decentralized perpetual DEX was heightened by the collapse of FTX, emphasizing the need for reliable alternatives. Hyperliquid's order book and clearing house are integral to its functionality, ensuring transparency and efficient margin management. The platform employs custom-built oracles to maintain accurate pricing, which is crucial for margin calculations and liquidations. Users can set leverage levels and manage their positions through cross-margin or isolated margin options. The Hyperliquid Liquidity Provider (HLP) program democratizes market-making by allowing everyday users to provide liquidity and share in the profits. This initiative aims to create a more equitable trading environment, contrasting with traditional market-making agreements that often disadvantage token projects. The platform's future development includes the launch of a native Ethereum Virtual Machine (EVM), which will enable broader application support and enhance the ecosystem's composability. Hyperliquid's spot markets have shown promising performance, and the anticipated launch of the HyperEVM is expected to attract new projects and liquidity. Despite its potential, Hyperliquid faces challenges, including competition from other decentralized exchanges and regulatory scrutiny. The platform's success will depend on its ability to maintain user engagement and adapt to the evolving landscape of decentralized finance. The narrative surrounding Hyperliquid emphasizes its community-first approach and commitment to a fair launch, positioning it as a viable alternative to traditional centralized exchanges.