How to Use Hyperliquid: Complete Guide to Trading, Vaults, and Staking (2025)

TL;DR: Hyperliquid is a high-speed, fully decentralized crypto exchange built on its own custom Layer-1 blockchain. It offers spot and perpetual futures trading with no KYC required. All wallets are non-custodial, and all transactions are transparent and on-chain. You can trade, stake the native HYPE token, and participate in innovative Vaults like the HLP (Hyperliquidity Provider), which lets anyone join market-making strategies and share profits. Hyperliquid features built-in multi-sig security, a blockchain explorer, and seamless API integration for tax tools. As usual, taxpayers should be aware of capital gains and income tax obligations on crypto trades and staking rewards.

Hyperliquid has emerged as a revolutionary player in the decentralised finance space, combining the speed and efficiency of centralised exchanges with the transparency and security of decentralised platforms. This guide explores everything you need to know about trading on Hyperliquid, from getting started to understanding its unique features.

What is Hyperliquid?

Hyperliquid is a high-performance decentralised exchange (DEX) that operates on its own purpose-built Layer-1 blockchain. Unlike most DEXs that run on existing networks like Ethereum, Hyperliquid created its own blockchain specifically optimised for trading performance.

The platform uses a custom consensus algorithm called HyperBFT (inspired by Hotstuff and its successors) and is engineered for maximum speed and efficiency. This allows Hyperliquid to achieve something rare in the DeFi space: the performance characteristics of centralised exchanges while maintaining decentralisation.

Key features of Hyperliquid include:

• Fast transaction speeds with block confirmations taking less than a second
• Low transaction fees
• Advanced trading tools like perpetual derivatives
• Fully on-chain order books (unlike most DEXs that rely on off-chain solutions)
• Powered by the native HYPE token, which launched via airdrop in 2024

The platform’s architecture is split into two main components: HyperCore (which includes the fully on-chain perpetual futures and spot order books) and HyperEVM (which brings Ethereum-like smart contract functionality to the Hyperliquid blockchain).

Onboarding to Hyperliquid

Getting started with Hyperliquid is straightforward and notably lacks the typical KYC procedures found on centralized exchanges.

Login Options

Hyperliquid offers two main ways to access the platform:

1. Email Login: Simply enter your email address, receive a 6-digit code, and you’re in. This creates a new blockchain address associated with your email.

2. Wallet Connection: Connect using various wallet options including:

   • MetaMask
   • Rabby Wallet
   • WalletConnect
   • Coinbase Wallet
   • Other EVM-compatible wallets

Funding Your Account

To start trading, you need to deposit funds to Hyperliquid. The platform supports deposits from multiple blockchains:

• Arbitrum: USDC (preferred option)
• Bitcoin: Native BTC
• Ethereum: Native ETH
• Solana: SOL or FARTCOIN

The deposit process is simple:

1. Click the “Deposit” button on the platform
2. Choose your asset and network
3. For USDC deposits, enter the amount and confirm the transaction
4. For other assets (BTC, ETH, SOL), send to the provided destination address

Note that only USDC is used as trading collateral for perpetuals, so other assets need to be sold for USDC first if you intend to trade perpetual contracts.

Wallet Management

Decentralised Control

Hyperliquid maintains a fully decentralised approach to wallet management:

• Email Wallets: When you log in with email, the platform generates a wallet for you, but you maintain control of the private key. Users can export their private key by clicking the gear icon and selecting “Export Email Wallet,” allowing them to import this wallet into other applications like MetaMask or Rabby Wallet.

• Connected Wallets: When using an external wallet, you maintain full control of your private keys as Hyperliquid never takes custody of them.

Transfers Between Accounts

Moving funds between your spot account and perpetuals (“perps”) trading account requires signing a message with your connected wallet. This cryptographic verification ensures that only you can authorise movements of your funds.

No Fiat On/Off Ramps

Hyperliquid operates purely in the crypto domain:

• No direct fiat currency deposits or withdrawals
• Users must deposit crypto assets from other platforms
• Withdrawals are only available in crypto assets

This crypto-only approach eliminates the need for KYC (Know Your Customer) and AML (Anti-Money Laundering) checks typically required for platforms that handle fiat currency.

Available Markets

Hyperliquid offers exceptionally deep liquidity across both its spot and futures markets, positioning it as a strong competitor to leading centralised exchanges (CEXs). Currently it offers various markets to cater to different trading needs:

Spot Trading

Trade cryptocurrencies directly on the exchange’s spot markets. Hyperliquid’s spot trading features a fully on-chain order book, enabling transparent and secure trading.

Perpetual Futures (Perps)

The platform specialises in perpetual futures contracts—derivatives without expiration dates that allow traders to take leveraged positions:

• Leverage up to 40x
• Linear perpetual contracts using USDC as collateral
• Both isolated and cross margin options
• Position sizes up to $10,000,000 depending on leverage
• Hourly funding payments to ensure contract prices track underlying assets

Hyperliquid Vaults

Vaults are one of Hyperliquid’s innovative features built directly into the HyperCore system. They allow users to participate in various trading strategies without actively managing positions themselves.

Key Features of Vaults:

• Users can deposit assets into vaults to earn a share of trading profits
• Vault owners receive 10% of total profits (except for protocol vaults, which have no fees)
• Vaults can be managed by individual traders or automated by market makers
• They benefit from the same advanced features as the DEX, including liquidations and high-throughput market making

HLP Vault: Community Market Making

• The HLP vault enables anyone to participate in market making on Hyperliquid by depositing USDC. Unlike traditional market making, which is often reserved for privileged insiders or exchange operators, HLP opens this opportunity to the entire community.
• The vault runs sophisticated market making strategies that compute a fair price based on real-time tick data from both Hyperliquid and major centralised exchanges. It then executes both making and taking strategies to provide 24/7 liquidity across all listed assets.
• The strategy itself operates off-chain, but all positions, open orders, trade history, deposits, and withdrawals are fully transparent and visible on-chain. This ensures that anyone can audit HLP activities in real time using the built-in explorer.
• HLP does not collect any fees; profits and losses are shared proportionally among depositors based on their share of the vault. Rewards compound automatically, so there is no need to claim them manually. Withdrawals (principal and rewards) are available in USDC after a brief lock-up period.
• The vault is not tokenised, distinguishing it from many DeFi liquidity pools. Participation is straightforward: deposit USDC and your share of profits (or losses) accrues automatically.
• The main risk is that the strategy could incur trading losses, similar to other liquidity pools like Uniswap or GLP. Historical performance can be tracked online, but future returns are not guaranteed.

Transparency and Access

By opening the vault to the community, Hyperliquid sets a new standard for transparency and equal access in exchange operations. All vault activities are trackable on-chain, and the platform encourages external market makers to participate, which is expected to improve the risk profile and performance of the HLP vault over time.

HYPE Token Staking

Hyperliquid’s native token, HYPE, can be staked directly from the trading interface. The platform uses a delegated proof-of-stake model.

Staking Process:

1. Transfer HYPE from spot account to staking account (instant transfer)
2. Stake HYPE to validators of your choice
3. Earn staking rewards proportional to your staked amount

Important Staking Details:

• Validators require a self-delegation of 10,000 HYPE to become active
• Delegations have a 1-day lockup period
• Transfers from staking back to spot account have a 7-day unstaking queue
• Validators may charge commissions, but these cannot be increased beyond 1% without restriction
• The staking reward rate is inversely proportional to the square root of total HYPE staked
• At 400M HYPE staked, the yearly reward rate is approximately 2.37%

Unique Features of Hyperliquid

Multi-Signature Functionality

Hyperliquid offers native multi-signature capability for enhanced security:

• Multiple private keys can control a single account
• Users can specify how many authorised signers are required to approve transactions
• Provides an additional security layer for high-value accounts
• Unlike other chains, this is built directly into Hyperliquid rather than requiring smart contracts

Fully On-Chain Transactions

One of Hyperliquid’s distinguishing features is its commitment to on-chain transparency:

• Every order, cancellation, trade, and liquidation happens on-chain
• All transactions are publicly verifiable on the Hyperliquid blockchain
• The exchange features a built-in blockchain explorer within the trading terminal
• This provides unprecedented transparency compared to centralised exchanges
• The platform currently supports 200,000 orders per second on-chain

Data Integration and Tax Implications

API Integration

Hyperliquid provides reliable and well-documented APIs for integration with various services:

• For developers, the Hyperliquid API SDK supports both REST and WebSocket endpoints
• Compatible with crypto tax calculation tools like DeCrypto.tax
• Complete API coverage with TypeScript support
• Browser and Node.js compatibility

Tax Implications for UK Traders

UK residents trading on Hyperliquid should be aware of the following tax considerations:

• Capital Gains Tax (CGT): Applies to profits from selling, trading, or exchanging cryptocurrencies

  • Tax rates between 18% and 24% depending on income
  • £3,000 annual tax-free CGT allowance (as of 2025)
  • Rates changed on October 30, 2024 (previously 10%-20%)

• Income Tax: May apply to earnings from staking, liquidity provision, or vault profits

  • Rates ranging from 20% to 45% depending on income. Additionally, HMRC may classify your trading activity as a professional occupation rather than casual investing, which could result in your profits being subject to income tax instead of capital gains tax
  • Personal allowance of £12,570 (as of 2025)

• Reporting Requirements: UK traders must report crypto gains and income on Self Assessment Tax Return (with a dedicated ‘cryptoassets’ section from April 6, 2025)

  • Deadline for filing: January 31st following the tax year

Using crypto tax reporting tools like DeCrypto.tax significantly simplifies the process of maintaining detailed transaction records and compiling accurate tax reports, saving time and ensuring compliance with HMRC requirements.

HMRC has increasing capabilities to track cryptocurrency activities, including data-sharing agreements with exchanges. From 2026, new OECD regulations will require all exchanges to collect and report customer data to tax authorities.