Hyperliquid in upheaval: From 80% market leader to B2B infrastructure player – Can the rise truly succeed?

In May 2025, Hyperliquid still controlled 80% of the perpetual trading volume in the decentralized derivatives market. Seven months later: 20%. A decline that sent shockwaves through the industry. But while many talk about the downfall of the former market leader, a completely different story is unfolding behind the scenes – a strategic realignment that could not only save Hyperliquid but redefine it as a global financial infrastructure.

A meteoric rise that became a problem

Hyperliquid’s first phase was simply dominant. From early 2023 to May 2025, the platform built an impregnable fortress:

A point-based incentive model attracted massive liquidity. New perpetual contracts like $TRUMP or $BERA were the most liquid at Hyperliquid. Traders who didn’t want to miss pre-listing trades like $PUMP or $WLFI had to register there – a self-reinforcing effect that left competitors behind.

The user interface was unmatched. Fees were lower than traditional exchanges. Spot trading, builder codes, HIP-2, HyperEVM, and technical reliability created an ecosystem that left competitors years behind.

With an 80% market share, Hyperliquid was not just leading – it was dominant.

The strategic turning point: B2C becomes B2B

Here begins the turning point. Hyperliquid decided not to grow as a traditional centralized exchange but to reinvent itself as the “AWS of liquidity” – a B2B infrastructure layer for external developers.

This decision had immediate consequences:

The initiative is lost: Instead of building mobile apps themselves or continuously listing new perpetuals, Hyperliquid hands product development over to third-party developers. In the short term, this is toxic for liquidity. The infrastructure is still young; external teams lack the distribution power Hyperliquid built over years.

Competitors strike back: While Hyperliquid steps back, platforms like Lighter remain fully vertically integrated. They can launch new products in weeks instead of months. They introduce features Hyperliquid doesn’t have yet – spot markets, perpetual stocks, forex. And they run aggressive incentive programs, while Hyperliquid has been running a year without an official incentive program.

Rented liquidity prevails: In DeFi, liquidity is as fleeting as nowhere else. Most of the migrating traders follow airdrops, not fundamental differences. Lighter leads with about 25%, still in the pre-TGE phase. After the token launch, this share is expected to shrink again.

The result: a market share collapsing from 80% to 20% in months.

The long-term perspective: HIP-3 and builder codes as turning points

But here lies strategic depth. What looks like a defeat in the short term is a repositioning in the long run.

HIP-3, Hyperliquid’s protocol for new perpetual markets, is developing into a silent weapon. Developers like Trade XYZ introduced perpetual stocks, Hyena Trade is launching a USDe trading terminal, experimental markets for pre-IPO exposure, and even Pokémon assets are emerging.

The volume of these HIP-3 markets is growing steadily. By 2026, they are expected to constitute a significant part of the total volume.

At the same time, builder codes are expanding – frontend integrations that enable wallets and interfaces to embed Hyperliquid natively. Revenues are rising, daily active users are growing.

The perfect cycle: Every new frontend that integrates builder codes gains immediate access to all HIP-3 markets. Developers are motivated to launch on HIP-3 because their markets are instantly available on Phantom, MetaMask, and other wallets. Users gain access to innovation. Everyone benefits.

This is not dominance through market size, but through network effects.

From crypto-natives to super-apps

The key to the next phase: builder codes are currently used by crypto apps like Phantom and MetaMask. But Hyperliquid aims for something bigger – super-apps that attract entirely new, non-crypto-native user segments.

This would be the scaling path that not only brings Hyperliquid back to the top but redefines it. Not as a centralized exchange, but as an infrastructure backbone on which the next generation of financial apps is built.

The real race

Lighter and other competitors have copied Hyperliquid’s current features. That’s easy. But innovation on Hyperliquid is constantly sharpening – building on top requires more specialized teams and deeper integration than trying to optimize everything yourself.

The question is no longer: Can Hyperliquid come back? The question is: Can the infrastructure strategy build network effects fast enough before the competition becomes too large?

Data suggests that the next 12 months will be decisive. Not for the traditional market share ranking, but for the fundamental architecture of the decentralized derivatives market itself.