How Hyperliquid Cracked Institutional Trading: From $47B Weekly Volume to 70-80% Market Dominance

Hyperliquid isn’t your typical crypto derivatives platform anymore. By 2025, this on-chain protocol transformed itself from a niche DeFi tool into an institutional trading powerhouse, hitting a jaw-dropping $47 billion in weekly trading volume while pulling in a 78% surge in its user base. What’s wild is how it managed to bridge the gap between decentralized finance and traditional finance in less than a year—and institutions are taking notice.

The Tech Behind the Machine: HIP-3 and Infrastructure Overhaul

The real story starts with HIP-3 growth mode, rolled out in November 2025. Hyperliquid slashed taker fees for new markets by over 90%, bringing them down to 0.00144% for top-tier traders. Sounds technical, but the impact was massive: suddenly creating new perpetual contracts became a no-brainer, and the platform exploded with fresh asset variety.

Case in point—when NVDA-PERP perpetual swap launched, it pulled $12 million in deposits and $5.8 million in open interest on day one. That’s not organic hype; that’s proof that serious money sees Hyperliquid as a legitimate place to trade.

Under the hood, Hyperliquid’s HyperEVM and Unit layers (February 2025 launch) provided the plumbing needed for this expansion. Ethereum Virtual Machine compatibility meant devs could actually build on it, while direct BTC and ETH deposits made the onramp frictionless. The result? $2.08 billion in total value locked within the HyperEVM ecosystem—a signal that institutions trust the infrastructure.

By mid-2025, Hyperliquid had captured 70-80% of the decentralized perpetual trading market. That’s not just dominance; that’s monopolistic territory.

Why Institutions Actually Show Up: Partnerships and Regulatory Credibility

Here’s where the institutional trading story gets interesting. Hyperliquid didn’t just build cool tech—it went after institutional trust directly.

The Safepal partnership (November 2025) is a perfect example. By integrating with one of crypto’s top wallet providers, Hyperliquid allowed users to access perpetual futures with up to 40x leverage straight from Safepal’s hardware and software wallets. That’s professional-grade infrastructure meeting institutional traders where they already are.

But the real game-changer was the S-1 SEC registration in 2025. By going through formal regulatory channels and pursuing a public listing (including a merger with Sonnet BioTherapeutics via SPAC), Hyperliquid sent a clear signal: we’re serious about legitimacy. This approach attracted institutional investments and set a blueprint for how other crypto platforms could follow suit.

Then there’s Hyperliquid Strategies, the digital asset treasury created in July 2023 to acquire HYPE tokens. The project aimed for a $1 billion capital raise through a Sonnet merger, and when it finally hit a shareholder vote, it pulled a 95% approval rate. That’s not just green lights from retail FOMO—that’s institutional consensus.

The Stablecoin Play: USDH Changes the Game

Hyperliquid’s USDH stablecoin (launched 2025) is where institutional adoption becomes unavoidable. Why? Because it’s backed entirely by fiat and U.S. Treasuries, managed by BlackRock, and tokenized through Stripe’s Bridge. That’s not some random stablecoin—that’s TradFi meeting DeFi head-on.

The killer part: its revenue model splits reserve yields 50-50 between HYPE buybacks and ecosystem development. So every time the protocol makes money, HYPE holders and institutions both win. It’s a feedback loop that makes institutional participation not just possible but economically rational.

The ETF Play and Custodial Trust

21Shares’ proposed SEC-approved ETF for the HYPE token, backed by custodians like Coinbase Custody and BitGo Trust, is the final puzzle piece. It transforms on-chain derivatives from “weird DeFi thing” into “legitimate institutional asset class” in the regulatory framework.

Combined with Hyperliquid’s HIP-3 protocol that allows permissionless market creation, you get a flywheel: more assets, more institutional players, more legitimacy, more capital inflow.

The Roadblocks Ahead

It’s not all smooth sailing. Regulatory scrutiny on DeFi remains real, and new competitors keep spawning. But Hyperliquid’s security partnerships with Checkmarx and CredShields suggest the platform is taking institutional-grade security seriously—audits, vulnerability management, the works.

The Bottom Line

Hyperliquid’s climb from experimental DeFi protocol to institutional trading destination isn’t luck. It’s systematic: killer tech (HIP-3, HyperEVM) removes friction, strategic partnerships (Safepal, BlackRock) build trust, and regulatory engagement (SEC registration) signals legitimacy. As the lines between DeFi and TradFi continue to blur, Hyperliquid isn’t just participating in that shift—it’s becoming the infrastructure that powers it.

The $47 billion weekly volume and 70-80% market share aren’t just vanity metrics. They’re proof that institutional trading on Hyperliquid isn’t a beta test anymore—it’s already the default.