Hyperliquid’s L1 Begins to Find its Footing

HyperEVM, Hyperliquid's EVM-compatible, general-purpose layer-1 blockchain, is beginning to show early signs of traction.

Although activity remains modest compared to HyperCore (Hyperliquid's flagship perpetuals platform), HyperEVM has demonstrated steady growth in transaction volume, total value locked (TVL), and application development since its launch in February. This progress comes despite the absence of robust tooling and direct incentive programs. Momentum has been fueled by key infrastructure upgrades, a maturing DeFi ecosystem, and growing speculation about potential airdrops.

The recent release of the CoreWriter update marks a pivotal moment for the ecosystem. By enabling full write access to HyperCore, CoreWriter will unlock a new class of applications that are natively integrated across both layers, further blurring the boundaries between the two platforms and positioning HyperEVM to evolve from a sidecar into a core driver of Hyperliquid's expanding onchain financial stack.

Key Takeaways

HyperEVM is deliberately being rolled out in an iterative and controlled fashion to ensure its activity does not affect HyperCore. This has created some friction for early teams building on the chain but has not deterred a large cohort of developers from launching applications, with more than 175 teams now building on HyperEVM.

HyperEVM already ranks 10th among L1s by TVL. Leading applications primarily consist of DeFi products, especially lending and borrowing. This is consistent with HyperEVM's goal to unlock DeFi composability for HyperCore.

HYPE is the native gas token for HyperEVM, and both base fees and priority fees are burned for every transaction. To date, transaction fees have burned 0.006% of HYPE's total supply, but that is poised to increase if onchain activity picks up as expected in the coming months.

User activity is still catching up with HyperCore adoption. Adoption will accelerate in the coming month as chain infrastructure and tooling enables unique use cases that better integrate HyperEVM and HyperCore.

The recent release of CoreWriter, which gives smart contacts on HyperEVM the ability to write directly to HyperCore, is a major unlock for the HyperEVM application ecosystem and will drive a surge in application deployments and user activity over the coming months.

Hyperliquid's broader vision is to position HyperEVM as a complementary financial layer to HyperCore. Over time, the goal is to create a vertically integrated DeFi stack where trading, lending, vaults, and staking all co-exist natively across the two chains.

HyperEVM architecture

Hyperliquid has two connected, but discrete, platforms: HyperEVM and HyperCore. HyperCore, the better-known of the two, is Hyperliquid's perpetuals futures platform that includes onchain order books, a margining system, and a matching engine. It has dominated the perpetuals market since its launch in 2023 and even begun to rival centralized exchange perpetuals offerings. HyperEVM is Hyperliquid's EVM-compatible general-purpose L1. It is a newer platform, launched on February 18, that is meant to unlock DeFi composability for HyperCore by integrating it with a general-purpose smart contract platform.

An important distinction here is that HyperCore and HyperEVM are separate chains but are secured by the same HyperBFT consensus mechanism (a combination of proof of stake and Byzantine Fault Tolerance optimized for high-throughput and low-latency systems) and the same validator set. This enables applications built on HyperEVM to directly interact with HyperCore's spot and perp order books.

(Source: Hyperliquid Docs)

Consensus and execution

HyperEVM employs a "dual-block architecture" to address the tradeoff between speed and capacity. Tiny fast blocks are processed every second and has a 2 million gas limit, enabling routine transfers and swaps to clear almost instantly. In parallel, a big block is processed once a minute with a 30 million gas limit, giving builders the space for heavyweight jobs such as deploying a large smart-contract or minting a huge NFT batch. The chain boasts a block latency of under one second and supports up to 200,000 orders per second.

While HyperEVM boasts high throughput and low latency, its transaction fees are consistently higher than those on Ethereum L2s, especially during periods of onchain congestion. The chart below compares median daily transaction fees across HyperEVM and seven L2s networks.

Notably, HyperEVM fees spike significantly during peak activity periods (to levels higher than $0.30 per transaction).

HYPE serves as the gas token on HyperEVM, which uses a modified version of Ethereum's EIP-1559 burn mechanism to burn both base and priority fees. The chain is EVM-compatible, enabling teams to easily redeploy EVM smart contracts on HyperEVM. Since launch, more than 55,000 HYPE tokens have been burnt, accounting for 0.006% of the total HYPE supply. For comparison, more than 367,000 HYPE have been burned on HyperCore from spot trading fees. At the current market price of $39.12 per HYPE, the burn represents over $2.15 million in HYPE burned since launch. Daily burns peaked at 5,849 HYPE (roughly $226,000) on May 26, coinciding with a spike in contract deployments and user activity. As activity on HyperEVM scales, its contribution to total HYPE burn will grow meaningfully, turning it from a marginal sink into a material driver of long-term supply reduction.

Since launching in February, HyperEVM has processed more than 30 million transactions, with daily transaction counts steadily climbing through Q2. Daily activity peaked at 411,120 transactions in June, coinciding with several key technical releases and an uptick in onchain NFT and memecoin activity.

Technical upgrades

HyperEVM launched with only very basic features, including spot transfers of HYPE to and from HyperCore and a wrapped HYPE contract for DeFi applications. This was a bare-bones launch, with the chain lacking many of the key features that should eventually distinguish it from other generic L1, most notably its integration with the HyperCore.

In the launch announcement, the team said one reason for launching in such a raw state was to ensure everyone had "equal access and starts on a level playing field." Additionally, a gradual roll-out enables them to more safely upgrade the system over time while incorporating user feedback in real time. According to teams building on HyperEVM, the lack of comprehensive tooling has created some friction but has not been a deterrent from building.

Since launch, the team has made several technical updates to HyperEVM, including:

• March 25: HyperCore and HyperEVM were linked, enabling users to trade any token from one chain on the other.

• April 30: Read precompiles were launched, enabling HyperEVM smart contracts to read state from HyperCore.

• May 26: Small block duration was cut in half to 1 second, increasing HyperEVM throughput. Scaling throughput remains a top technical priority for the team and further reductions in block time are expected.

• June 26: HyperEVM blocks were updated to sort post-only orders before cancels to improve integration with HyperCore.

On July 5, HyperEVM was updated to include a new precompile called CoreWriter. It enables HyperEVM contracts to write directly to HyperCore, placing orders, transferring spot assets, managing vaults, staking HYPE, and more. This upgraded HyperEVM from a chain that could only read updates on HyperCore to one that can now directly update HyperCore state and will be a major step forward for unique functionality on HyperEVM (discussed further below). The team announced the initial CoreWriter upgrade on July 2, and it was formally deployed three days later (mainnet updates are usually deployed on Saturdays).

While CoreWriter represents a major step forward in unifying HyperEVM and HyperCore, it does come with limitations. Most notably, write operations via CoreWriter are not atomic, meaning smart contracts cannot confirm within a single transaction whether an order or state change on HyperCore was successful. This asynchronous design is intentional, aimed at minimizing front-running, but it presents challenges for more complex or precision-dependent trading strategies. As a result, while CoreWriter allows new classes of applications, its early implementation favors use cases that can tolerate asynchronous execution or assume high success rates, such as staking, vault deposits, and simpler programmatic interactions. Given the complex nature of the interaction between HyperEVM and HyperCore, the Hyperliquid team continues to roll out these updates iteratively, unlocking functionality overtime to ensure that they do not affect HyperCore functionality.

HyperEVM's app ecosystem

Since launch, HyperEVM has seen rapid ecosystem growth, with more than 175 projects publicly building on the chain and even more building in stealth. Developers are the heartbeat of any emerging ecosystem and Hyperliquid has been able to attract a strong cohort of builders thanks to its unique architecture and integration with HyperCore, one of the most liquid onchain exchanges with a large userbase that can easily bridge over to HyperEVM. When we spoke with many teams building on HyperEVM that previously worked on other chains, they repeatedly emphasized that their decision to move was driven by either constant user requests or the need for more liquidity for their applications to function. Furthermore, unlike many other L1 ecosystems, Hyperliquid has been able to attract builders without a targeted incentives/funding program. Instead, the success of HYPE, combined with expectations for future airdrops (42% of the remaining supply), has proven to be incentive enough.

HyperEVM TVL has steadily climbed the L1 leaderboard since launching and currently ranks No. 10 overall. The increase in TVL is concentrated in a few key protocols (covered in depth below). Importantly, this growth is occurring without any liquidity mining campaigns or ecosystem grants. While most of Hyperliquid's user and transaction activity still resides on HyperCore, HyperEVM is now positioning itself as the DeFi settlement layer for the entire stack. With CoreWriter set to unlock write access to HyperCore soon, TVL will transition from passive capital (idle lend/borrow) to active capital that trades with real-time perpetuals markets, vaults, and order books.

As shown below, the ecosystem's assistance fund still holds more HYPE (25.79 million) than is deployed across the entire HyperEVM chain (~25 million). The imbalance shows that HyperEVM is still in the early innings. As on-chain usage grows, we expect more idle capital to migrate into productive DeFi use cases.

Despite the chain launching in February, smart contract deployment on HyperEVM did not really start to pick up until mid-May. This can be attributed to a few reasons. When HyperEVM launched it lacked ERC-20 support, block explorers, or reliable indexers, creating limitations for developers. Additionally, the Hyperliquid team gave little advance notice on when HyperEVM would roll out, leading many teams to begin full development and deployment of contracts only after the launch. As core infrastructure and tooling like the cross-VM asset bridge, contract indexing, and verification tools started to roll out in March and April, smart contract deployment began to pick up. With the launch of CoreWriter, we expect to see another surge in smart contract deployment as applications update their offerings and products come to market.

Top Protocols by TVL

• HyperLend is the largest project by TVL on HyperEVM, with $487 million, and the chain's primary borrow/lend protocol. It offers many of the standard borrow/lend features, such as core pools, which enable the supplying or borrowing of multiple tokens in a single pool; efficiency mode, which allows users to borrow with a higher TVL against correlated assets; and isolated pools, which isolate risk to a specific token pair. On June 10, HyperLend announced it was shifting its focus toward integrating with HyperCore. With this latest update, position liquidations can now occur either directly on HyperEVM or via cross-chain execution on HyperCore. This represents one of the first major HyperEVM integrations with HyperCore and is likely what the Hyperliquid founders had in mind when launching HyperEVM. With the HyperCore integration, HyperLend now offers liquidators three distinct methods through which they can execute liquidations. For a full overview of how HyperLend handles liquidations please review to the team's post here. The team has also hinted that they are working on additional products that take advantage of the CoreWriter release but have yet to publish any details.

• Felix ranks second by TVL with $340 million and also provides a suite of on-chain borrowing and lending products. The application has two core primitives, its collateralized debt position market and "vanilla" lending markets. Felix has taken advantage of Hyperliquid's EVM compatibility for its backend infrastructure, using Liquity's v2 architecture for its CDP stablecoin feUSD and Morpho's tech stack for its vanilla lending markets. In April, Felix announced the launch of USDhl, a fiat backed stablecoin being developed in partnership with stablecoin platform M0. In aggregate, Felix's stablecoin offerings have contributed over $100 million in stablecoins to the HyperEVM ecosystem since launch, with the majority ($75 million) coming from feUSD, according to public onchain data. Felix also plans to integrate liquidations on HyperCore following the release of CoreWriter.

• HypurrFi is the third largest lend/borrow application on Hyperliquid with $318 million in TVL. It markets itself as Hyperliquid's "debt infrastructure provider." In addition to lend/borrow facilities, HypurrFi also offers an overcollateralized stablecoin, USDXL; a built-in DEX; and yield vaults for users to deploy their assets. Following a depeg of USXL in May, the team lowered minting caps on the stablecoin to $5 million while they work to implement a more robust peg mechanism.

• HyperSwap and KittenSwap are the primary AMM DEXs on Hyperliquid and the fourth- and fifth-largest applications by TVL. They borrow their designs from familiar EVM AMMs and offer standard and concentrated liquidity positions similar to Uniswap's. KittenSwap also incorporates Curve's ve(3,3) model. The release of CoreWriter will significantly upgrade their capabilities by enabling both DEXs to integrate HyperCore order books so that users' orders can be routed through either the DEX or the order books for best execution.

• Unit Protocol is an asset tokenization layer for the Hyperliquid ecosystem, enabling cross-chain deposits and withdrawals of major cryptocurrencies like BTC, ETH, and SOL on HyperCore and HyperEVM. Unit operates a decentralized guardian network that uses a lock-and-mint system to issue native spot assets without relying on centralized custodians. As of July 1, Unit had helped deploy over $100 million BTC and $13 million ETH on HyperEVM.

In addition to the examples mentioned above, numerous teams are working on product releases that rely on the CoreWriter integration. A few examples include:

• Kinetiq is a liquid staking protocol on Hyperliquid, operating across HyperCore and HyperEVM. It enables users to stake HYPE tokens, which are natively staked on HyperCore, and receive kHYPE, a liquid staking token usable in DeFi applications on HyperEVM. Kinetiq employs an autonomous, oracle-based validator selection system to dynamically delegate HYPE to the highest-performing validators, optimizing yield and supporting network security. To facilitate staking actions between HyperEVM and HyperCore, Kinetiq will leverage CoreWriter, enabling simple integration and liquidity for staked assets. Just a few days since the CoreWriter release, the team has already indicated they plan to launch their product on July 15.

• Sentiment is a decentralized lending protocol on HyperEVM that enables users to borrow and lend assets with customizable leverage. It allows users to pledge assets, such as kHYPE from Kinetiq or other HyperEVM tokens, to borrow stablecoins like USDC at competitive rates, facilitating strategies like leveraged yield farming. Sentiment's smart contracts will soon interact with HyperCore via CoreWriter, enabling real-time access to Hyperliquid's onchain order books for collateral valuation and liquidation management.

• HyperDrive and Hyperwave offer tokenized versions of HLP (a community-owned protocol vault that conducts market-making and liquidation strategies on HyperCore). The CoreWriter update will enable these projects to more easily integrate HLP into HyperEVM's growing DeFi ecosystem.

• Liminal is a delta-neutral yield protocol built on HyperCore. Liminal leverages Hyperliquid's high-performance trading infrastructure to execute automated, market-neutral strategies that capture funding fees from perpetual futures markets. Its non-custodial design ensures user control over funds, with institutional accounts utilizing Hyperliquid's native agent system for secure trade execution. The release of CoreWriter will eventually enable the team to deploy HyperEVM contracts for users to manage positions on HyperCore.

• Rysk is a decentralized options trading protocol built on HyperEVM that turns covered calls into a liquid, tradable primitive. It enables users to generate yield upfront while allowing advanced options trading within Hyperliquid's DeFi ecosystem. Rysk leverages the HyperCore API to hedge the buy-side flow of options in real time, directly onchain, but the team plans to update the stack to integrate CoreWriter. This will reduce covered call options execution risk and provide greater transparency for users. The team is also exploring options to enable users to spin up their own custom trading strategies that combine options and perps using HyperEVM and CoreWriter.

Outlook

Approaching nearly half a year since its launch, HyperEVM has all the ingredients to become a successful general purpose L1 that complements a successful perpetuals platform. Unlike other emerging L1s, which require large incentives programs and truly novel apps to attract users and developers, HyperEVM has built-in access to both, enabling developers to focus on product development and innovation.

Speaking on a podcast recently, Hyperliquid founder Jeff Yan said, "[Hyper]EVM is to all of finance, as AMMs are to all of trading." While HyperCore is the main building block of the Hyperliquid ecosystem, it alone cannot service all the possible use cases that can be built on top of a perps exchange. HyperCore will likely remain the predominant hub for activity in the near term, but we expect HyperEVM activity to accelerate over the coming year as chain performance and tooling improve and applications mature. By vertically integrating the platforms, Hyperliquid aims to create a comprehensive financial ecosystem that provides users everything they need in one place and keeps liquidity sticky.

The recent CoreWriter release is a major catalyst that will accelerate HyperEVM activity by fully integrating it with HyperCore. It will allow applications on HyperEVM to write directly to HyperCore for the first time, enabling frictionless interaction across the two environments and unlocking more powerful, coordinated onchain applications.

Simply put, CoreWriter represents a significant milestone for HyperEVM, and developers have expressed interest in leveraging this integration to build products that are hard to find elsewhere.