What is Hyperliquid (HYPE)?

Hyperliquid has grown quickly into the most-used decentralised exchange for derivatives trading, and its native token, HYPE, has become one of the more talked-about assets in the market.

This guide explains what Hyperliquid is and how it differs from a centralised exchange, what HYPE actually does, and why tokens tied to financial infrastructure are worth understanding as their own category. We also look at the risks involved, and how to buy HYPE on Luno.

What is Hyperliquid?

Hyperliquid is a decentralised exchange, often shortened to DEX. It is built for trading derivatives, in particular perpetual futures – contracts that let traders bet on the price of an asset without owning it and with no expiry date. It runs on its own layer-1 blockchain, which the team built specifically for trading.

On a centralised exchange, the company holds your funds, matches trades on its own internal systems, and you trust it to manage everything behind the scenes. On Hyperliquid, you keep custody of your own assets, and the trading, matching, and settlement all happen on-chain where anyone can verify. There is no central company holding the funds in the middle of a trade.

Hyperliquid is known for its speed. The network processes around 200,000 orders per second with near-instant settlement, which is fast enough to feel like a centralised exchange while keeping the self-custody and transparency of a decentralised one. 

What HYPE does within the Hyperliquid ecosystem

HYPE is the native token of the network. It is the asset the blockchain itself runs on. It has a maximum supply of 1 billion tokens, and it does a few specific jobs:

• Network fees: HYPE is used to pay transaction fees on the Hyperliquid blockchain, in the same way other networks use their own native coin for gas.
• Governance: Holders can take part in decisions about how the protocol develops.

The feature that gets the most attention is how the platform links its own success back to the token. Hyperliquid directs roughly 97% of its trading fee revenue into buying HYPE back from the open market, through a mechanism it calls the Assistance Fund. Those purchased tokens reduce the supply available to everyone else. In practice, the more the platform is used, the more fees it earns, and the more HYPE is bought back. 

The scale of this has been significant. In 2025 the protocol spent over $645 million on these buybacks, one of the largest such programmes in decentralised finance, and in the first quarter of 2026 it repurchased a further $192 million worth of HYPE. The idea behind it is to tie the value of the token to actual usage of the platform, more like a company using profits to buy back its own shares than a token that simply trades on sentiment. That link is the core of the investment case people make for HYPE, though, as with everything here, it depends on trading volumes holding up.

Why DeFi infrastructure tokens are a distinct category

It is easy to lump every crypto asset together, but HYPE sits in a unique category. Infrastructure crypto assets like HYPE are tied to a piece of financial plumbing that earns fees when people use it, and the asset is designed to capture some of that value. The Hyperliquid network is an exchange, and exchanges make money from trading activity. The argument for this category is that you are getting exposure to the growth of on-chain trading itself, rather than only speculating on whether the crypto will go up or down.

It doesn’t mean that the link between volume and value always holds, but it is closer to owning a stake in the activity of a trading venue, which is why some institutional research has started covering it in those terms.

Risks worth understanding before you buy

HYPE is a higher-risk asset, and it is important to be clear on the risks before investing.

Price volatility

HYPE can move sharply in both directions, and it has already had large swings in its short history. Crypto markets in general are volatile, and a relatively new token tied to one platform can be more volatile still. You could lose a significant part of what you put in.

Smart contract and protocol risk

Hyperliquid is software, and software can have bugs or be exploited. It is also a young protocol that has not been through a full market cycle, and it has faced stress events in the past that the team had to manage. Newer networks carry more of this risk than older, more battle-tested ones.

Concentration

Hyperliquid runs on a relatively small number of validators compared with older networks, and a large share of its trading activity comes from a limited group of high-volume traders. Its revenue is also tightly linked to derivatives trading volumes, so if that activity falls, the buyback mechanism that supports the asset weakens with it.

How to buy HYPE on Luno

Buying HYPE works the same way as buying any other asset on Instant Buy and Sell:

1. Open the Luno app and sign in. If you are new to Luno, create an account and complete the verification steps first.
2. Add funds to your Luno wallet using your usual deposit method.
3. Search for HYPE in the app.
4. Select Buy, enter the amount you want to spend, and review the order. You do not need to buy a whole token, so you can start with a small amount.
5. Confirm the purchase. HYPE will appear in your portfolio, where you can track it and sell whenever you choose.
    

Security incidents

Hyperliquid has not experienced a smart contract exploit, private key compromise, or bridge drain since mainnet launch in 2023. Its notable incidents to date have been market-structure and governance events rather than security breaches, as set out below.

The JELLYJELLY squeeze (26 March 2025)

A trader opened a large short position in JELLYJELLY, a thinly traded token, then bought the underlying spot market to push the price up and force their own position into a large paper loss. Because the position was too large for the token's liquidity, the resulting exposure landed on the HLP vault, the pool that sits on the other side of liquidations, and open-interest caps then blocked new positions from opening, which stopped liquidators from closing the short. 

Hyperliquid's validators voted within roughly two minutes to delist the JELLYJELLY market and settle all positions at the trader's original entry price rather than the price the market was showing, and the Hyper Foundation reimbursed affected users other than flagged addresses. Reported losses to the HLP vault vary widely by source, from around $700,000 realised to $12–13.5 million unrealised at peak, and should be treated as estimates. Source: Halborn, OAK Research

The above may not be an exhaustive list of incidents. As always, it's important that you do your own research to ensure you're comfortable with an asset's associated risks before investing in it.

Third-party security audits

Hyperliquid has not been audited by CertiK itself, but CertiK's Skynet tracker records two third-party audit reports for the project and confirms it runs a third-party bug bounty programme. Hyperliquid's own documentation adds detail: its Arbitrum bridge contract the smart contract holding all USDC deposited to trade on the platform- and the largest single concentration of user funds in the system has been audited by Zellic, which published an initial report and a final report. 

No public audit report has been located for HyperCore (the exchange engine) or HyperBFT (the consensus mechanism) themselves; these core components remain unaudited by any named third party as far as public records show. Hyperliquid runs an official bug bounty programme, paid in USDC and scaled to severity, but does not currently hold a SOC 2 report or any publicly disclosed penetration-testing report. Source: CertiK Skynet, Hyperliquid Docs

Token supply and concentration

Hyperliquid has a maximum supply of 1 billion HYPE, though most data providers now report a lower figure of roughly 952–999 million, because HYPE bought back by the Assistance Fund (the protocol's fee-funded buyback mechanism) has been formally recognised as burned. As of June 2026, five large allocation wallets, covering the Hyper Foundation, HyperLabs, future emissions, the Assistance Fund and community grants, collectively held approximately 777.4 million HYPE, around 81.4% of the roughly 955.3 million total chain supply at that time, with all other holders combined holding the remaining ~18.6%.

Visit HypurrScan to see token and wallet-level data on the Hyperliquid network.


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