GM. This is Milk Road PRO, the newsletter that obsesses over impressive new tokens like a twelve-year-old with a fresh pack of Pokemon cards.
This year has yet to turn out the way we’d all hoped.
Sure, Trump’s inauguration wasn’t the "sell the news" event that some thought it would be.
…but a few of his later moves definitely hurt a bit (*cough* tariffs *cough*).
That’s why the charts for major assets since his inauguration look so rough. Everything is down—even $BTC!
But in the middle of all this, we were eyeing a token that has been on our radar for a while. Its resilience stood out, holding strong while everything else was falling.
Bitcoin is currently down 21%, while Ethereum and Solana have taken even bigger hits with double-digit losses.
But what really caught our attention is $HYPE—the token for Hyperliquid.
Hyperliquid is a next-gen trading platform built on its own super-fast blockchain.
Think of it like Binance (the largest crypto company in the world), but fully decentralized—meaning you stay in control of your funds instead of trusting a centralized exchange!
But if you’ve been a Milk Road reader for a while, you know we don’t just chase price action. And this time is no different.
👉 Price can be a great signal that something’s worth looking into, but we always dig deeper to separate the real opportunities from the noise.
With Hyperliquid, we wanted to understand the market they’re targeting—and more importantly, how they’re performing in terms of market share.
The results were honestly kinda shocking—Hyperliquid has been steadily increasing its market share since launch and has now already captured 60% of the entire decentralized perp market! 🚀
It’s hard to find a stronger signal than that! 🔥
Let’s take a quick look at some key numbers to get an even better perspective on what’s really happening.
You don’t need to know all the nitty-gritty details—what really matters is that Hyperliquid is laser-focused on serving traders.
And the best way to measure if they’re doing a good job? Trading volume.
They’re pulling in $56.8 billion in weekly trading volume—that’s 8 times more than their closest competitor, Jupiter.
Ok, we’re sold. We want to learn more about $HYPE, see if it’s a good investment – and maybe even see if it has a place in the Milk Road PRO Portfolio.
As always, we are going to use our own framework to analyze new projects, following a structured approach to get a clear, concise picture.
Want to learn more about our process for evaluating new tokens? Check out this report.
Here are the key questions we’re looking to answer in today’s report:
- Who’s behind this powerhouse of a project?
- What gives them such a massive edge over the competition?
- Are there any upcoming catalysts that could send the price even higher?
- Is there still room for more upside?
We hope you’re just as excited as we are. Let’s dive in!
TEAM
Always start with the team—especially the founders. They’re the driving force behind the project, and their vision, experience, and leadership determine success. This is the most crucial factor, so never overlook it!
Hyperliquid was founded by two key individuals. Let’s take a closer look at their backgrounds to see if they have the right experience and vision to make this project a success!
Jeff Yan (Co-Founder)
Jeff Yan is a Harvard graduate with a strong background in high-frequency trading. He started his career at Hudson River Trading, one of the top quantitative trading firms, and also had a stint at Google.
In 2020, he transitioned into crypto, founding a proprietary trading firm (Chameleon Trading), where he developed automated trading strategies. His team became one of the largest market makers in crypto by 2022. 👏
After witnessing the collapse of FTX, Yan saw the need for a high-speed, trustless decentralized exchange, leading him to co-found Hyperliquid.
Iliensinc (Co-Founder)
Iliensinc, known by his online alias, is also a Harvard graduate and was a classmate of Jeff Yan. While his pre-crypto career details are limited, he was a key part of Chameleon Trading, helping develop high-frequency crypto trading strategies.
He operates more behind the scenes but is considered a critical force in the platform’s development. His deep understanding of trading infrastructure and blockchain technology, combined with a track record of successful execution, makes him an ideal co-founder for Hyperliquid.
TL;DR: While we’d love to know more about Iliensinc, we respect his privacy. Based on what we do know, these founders have a strong chance of building something meaningful.
They have direct experience in high-frequency trading and crypto market making, which aligns perfectly with Hyperliquid’s mission to create a high-performance decentralized exchange.
Their firsthand frustration with existing platforms gave them insight into building a better solution.
☝️ This last bit is super important. The best founders are those who worked on similar ideas within traditional systems but saw a way to do it better using blockchain.
Jeff and Iliensinc fit that mold!
It’s hard to imagine any VC in the world who wouldn’t throw money at these two to build this. But we’ll dive into their fundraising and VC backing later. Hint: It’s a great story!
Let’s move on to the TAM.
TOTAL ADDRESSABLE MARKET
Hyperliquid is making derivatives trading seamless, powerful, and easy to use.
Let’s take a quick look at the traditional finance derivatives market—because it’s on a whole different level.
To put it simply, derivatives make the stock market look tiny. The total notional value of the global derivatives market is estimated to be over $1 quadrillion.
(If that number makes your head spin, you’re not alone.)
The takeaway? This market isn’t just big—it’s massive.
So, what makes this market so massive? Derivatives like futures, options, and leveraged ETFs let traders control huge positions with relatively little capital. They’re crucial for managing risk across different markets—currencies, interest rates, commodities, equities, and more.
👉 And because many of these trades offset each other, the actual financial exposure is far smaller than the jaw-dropping notional value you see in headlines.
TL;DR: Derivatives aren’t just a part of the market—they are the biggest market.
Great, but what about crypto? Even in the digital asset space, derivatives trading is already outpacing spot trading.
Every month, crypto trading volumes (including spot and derivatives) hover around $5 trillion, and a whopping 70% of that comes from derivatives.
These numbers are massive. And here’s something important to keep in mind—these numbers mainly come from centralized exchanges like Binance, OKX, and Bybit.
Mainly because that’s where the vast majority of trading activity happens today. Here is the chart showing the market share of all major CEXs.
Binance leads the pack with a 36% market share, handling a staggering $2 trillion in monthly trading volume.
Now, enter Hyperliquid—often seen as the decentralized version of Binance. They offer a similar user experience (UX) while delivering better security. That’s a game-changer.
And for serious traders and institutions – that extra layer of security could be the key factor that shifts the market.
TL;DR: The Total Addressable Market (TAM) for Hyperliquid isn’t just big—it’s enormous. Right now, most crypto trading happens on centralized exchanges like Binance and OKX.
Binance leads the pack with over $1 trillion in monthly derivatives trading volume, with OKX and Bybit trailing behind.
Hyperliquid handles around $150 billion in monthly trading volume, making up less than 5% of the total volume across centralized exchanges, which averages around $3 trillion.
But here’s the bigger picture—this is just the beginning. As more assets become tokenized and available for trading, the market is set to expand even further, unlocking massive new opportunities for traders and platforms alike.
As this shift accelerates, the potential TAM for platforms like Hyperliquid could far exceed tens of trillions.
Plus, Hyperliquid recently announced plans to add spot trading, not just derivatives.
This move expands their total addressable market (TAM) even further, attracting more traders and increasing platform demand!
Great, so big enough TAM? Check! ✅
Moving on to the product.
PRODUCT
Launched in 2022, Hyperliquid is a trading platform run on a customized proof-of-stake (PoS) blockchain designed to deliver a frictionless, high-performance trading experience.
But here’s the big question—how can it compete with Binance and other industry giants?
The team behind Hyperliquid recognized a key insight: traders don’t just care about fees—they care about the entire trading experience.
Until now, centralized exchanges (CEXs) have dominated because they offer smoother, faster, and more reliable trading than decentralized platforms.
Hyperliquid set out to change that.
👉 By combining the speed and usability of CEXs with the security and transparency of decentralized finance (DeFi), it’s creating a next-gen trading platform that can truly rival the biggest names in the industry.
Let's take a closer look at how their product actually works—and what makes it stand out.
1/ Custom High-Performance Blockchain
Hyperliquid runs on its own custom Layer-1 blockchain, designed for speed and high throughput.
It can handle up to 2 million transactions per second (TPS), with blocks finalizing in just 0.2 seconds—matching the performance of top centralized exchanges.
This powerful infrastructure allows Hyperliquid to operate a fully central limit order book (CLOB) and trade matching engine without the usual slowdowns of general-purpose blockchains.
The result? Near-instant order execution and updates, making it a perfect fit for high-frequency trading.
2/ Gas-free trading
Hyperliquid eliminates gas fees for order placement and execution, meaning traders can submit and cancel orders without extra costs.
This makes trading more efficient and cost-effective while still maintaining the security and transparency of an order book.
The only fee? A tiny network fee (~$0.001 per transaction) for certain blockchain updates, like withdrawals or liquidations—a small price for a seamless trading experience.
3/ Competitive trading fees
Hyperliquid offers some of the lowest trading fees in the crypto derivatives market, making it an ideal choice for active traders.
- Maker Fees: If you place a limit order (it adds liquidity), you’ll pay a small maker fee (0.01% on Hyperliquid). But if you’re a high-volume trader, you can actually earn money instead. This rebate starts at -0.001% and can go up to -0.003%, meaning you get paid a tiny percentage for each trade you make as a market maker.
- Taker Fees: Traders who remove liquidity pay just 0.035% per trade, lower than many centralized exchanges.
- Fee Discounts: High-volume traders get automatic discounts, ensuring the most active users pay the lowest fees.
- Funding Fees: Like other perpetual futures platforms, Hyperliquid uses funding rates to keep contract prices aligned with spot prices. Fees are exchanged directly between long and short traders at regular intervals.
With low fees, maker rebates, and gas-free trading, Hyperliquid is built for professional and high-frequency traders looking for an edge.
4/ Vaults
A system similar to copy trading, to boost liquidity and offer users a way to earn passive income.
The main Hyperliquidity Provider (HLP) vault is a liquidity pool owned by the platform that acts as a counterparty for trades. You want to become a market maker, but you don't know how? Just deposit USDC and the vault provides the liquidity and makes money from trading fees, funding fees, and liquidation profits. By depositing in HLP, you are effectively acting as the “house” in a casino.
Here are some recent stats:
Traders can launch their own “User Vaults”. Other users can invest in these vaults, and the vault creator earns 10% of the profits as a performance fee.
This feature not only deepens liquidity but also adds a unique social trading aspect that sets Hyperliquid apart from other DEXs.
All these factors together make Hyperliquid a massive success. Their platform outperforms the competition, which is why more and more traders are making the switch.
But it’s not just traders getting involved. Some people prefer not to trade themselves but still want to profit from the “casino-like” business model. That’s where HLP vaults come in—they let users earn from the platform’s success without actively trading.
But is this just hype, or is it built to last? To answer that, we need to look at Hyperliquid’s competitive edge.
Uh, Oh… 😧 The rest of this report is exclusive to Milk Road PRO members!
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WHAT’S LEFT INSIDE? 👀
- How does Hyperliquid stack up against its competitors?
- A deep dive into $HYPE’s tokenomics
- Are we buying $HYPE?
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