Hyperliquid from 80% share to 20% – Will HIP-3 and Builder Codes restore dominance?

Hyperliquid maintained dominance in the decentralized derivatives market for over a year, but since May 2025, we have observed a dramatic shift. Market share dropped from around 80% to just 20% between November and December. The question market observers are asking today: is this the end of Hyperliquid’s success story, or just a transitional phase before a new chapter?

When Everything Was Clear – Hipperdomination 2023-2025

The first half of 2025 was a period when Hyperliquid virtually had no competitors. Several factors contributed to this undeniable position:

The project implemented an intelligent incentive system based on points, which attracted significant liquidity. At the same time, Hyperliquid consistently launched new perpetual contracts as the first (e.g., $TRUMP, $BERA), becoming the natural choice for traders who didn’t want to miss emerging trends. This first-mover advantage meant that every investor interested in the latest trading pairs had to come here.

Additionally, the platform stood out with the best usability in the industry, lower fees than centralized exchanges, spot trading functionality, and zero downtime even during market crises. As a result, market share grew almost like clockwork, reaching a peak of 80% in May of this year.

Changing the Narrative – B2C versus B2B and Growing Competition

The breakthrough came faster than many expected. From May to December 2025, Hyperliquid’s position eroded at an alarming rate. What happened?

The Hyperliquid team deliberately changed its strategy. Instead of further investments in a traditional consumer app and rapid product rollout, they decided to position themselves as the “AWS of decentralized finance” – infrastructure for third-party developers. HIP-3 enables launching new perpetual markets by external teams, and Builder Codes serve as a toolkit for frontends. In theory, this is brilliant. In short-term practice – disastrous for liquidity maintenance.

While Hyperliquid adapted to the new business model, competitors (especially Lighter) remained fully vertically integrated. This meant faster deployment of new features, full control over product issuance, and the ability to leverage already established user trust. As a result, platforms like Lighter added existing Hyperliquid products to their offerings but also introduced elements unavailable there – spot markets, perpetual stocks, forex.

Furthermore, the incentive game changed fundamentally. Hyperliquid did not run an official incentive program for over a year, while competitors actively farmed airdrops. In the DeFi world, liquidity is always “rented,” and before a significant TGE, the next day’s market is rewarded to those with the strongest promises. Lighter, leading the market share ranking (around 25%), is only now preparing for TGE. A significant portion of the volume that left Hyperliquid was lured there precisely by the promise of tokens.

Return to the Game – HIP-3 and Builder Codes as Long-term Solutions

However, the transformation into “liquidity AWS” makes sense in the long run. While competitors have already copied most of Hyperliquid’s current innovations, the truly groundbreaking solutions still originate from there. Developers building on Hyperliquid’s infrastructure have access to specialized technology and can implement more precise product strategies. Competitors, say protocols remaining fully vertically integrated, face limitations in optimizing multiple product lines simultaneously.

HIP-3 is still in its early stages, but its impact is gradually becoming evident. Trade.xyz launched perpetual stocks, Hyena Trade implemented a USDe terminal. Experimental markets are emerging – Ventuals offers exposure before IPO, Trove Markets is building niche markets for items like Pokémon cards or CS:GO skins. Estimates suggest that by 2026, volumes originating from HIP-3 will become a significant part of the total activity on the platform.

The engine of revival will be the synergy between HIP-3 and Builder Codes. Every frontend integrated with Hyperliquid gains instant access to the entire ecosystem of new markets. Developers are thus motivated to launch on HIP-3, knowing their products can be distributed through compatible interfaces (Phantom, MetaMask, and others), opening access to new liquidity sources. This creates an ideal positive feedback loop.

Revenues and Activity – Signals Awaiting Confirmation

Builder Codes are gradually demonstrating growth. Revenues are increasing, and the number of daily active users is clearly rising. Currently, native crypto applications dominate here, but we expect the emergence of a whole class of “superapps” built on Hyperliquid – interfaces designed to attract completely new, inexperienced users. This could be the key to the next wave of scaling.

Will Hyperliquid return to the top? Not in the short term – competitors with their aggressive TGE and market of the next day will promote that. But fundamentally, if the developer ecosystem on HIP-3 takes off as expected, the chance is realistic.