Hyperliquid: From Supremacy to Revival - How HIP-3 and Builder Codes Will Transform the Future of DEXs

In the decentralized derivatives market, few platforms have captured attention as much as Hyperliquid. From its dominant position with an 80% market share to a dramatic drop to 20%, this platform’s story represents one of the most fascinating case studies in the cryptocurrency industry. This article, based on a translation and in-depth analysis of an original technical assessment, examines the factors behind this transformation and Hyperliquid’s potential comeback through HIP-3 and Builder Codes.

When Hyperliquid Dominated the Market: From 80% Share to Strategic Collapse

From early 2023 to mid-2025, Hyperliquid was the uncontested force in the sector. Its path to dominance was built on a combination of structural advantages that were hard to replicate: a points-based incentive system attracted massive liquidity, while being the first mover in launching new perpetual contracts—such as $TRUMP and $BERA—made Hyperliquid the go-to platform for pre-listing trading and new pairs.

The platform offered what competitors couldn’t: a superior UI/UX experience compared to other DEXs, lower fees than traditional CEXs, the introduction of spot trading to expand use cases, and most importantly, zero downtime even during severe market crashes. The launch of HyperEVM and the integration of Builder Codes further solidified its position as the core infrastructure of the ecosystem.

The result? Nearly continuous market share growth for over a year, reaching a peak of 80% in May 2025. At this point, Hyperliquid seemed to have created an almost insurmountable competitive moat: no competitor could match the team’s innovation and execution speed.

The 2025 Challenge: How Competitors Seized the Opportunity from Hyperliquid

From May 2025 onward, the landscape changed dramatically. Hyperliquid’s market share plummeted from around 80% to nearly 20% by early December—a decline that surprised many industry observers. However, this drop did not reflect a weakness in Hyperliquid but rather a deliberate strategic decision.

Hyperliquid chose to transform from a traditional B2C platform into a B2B infrastructure, positioning itself as the “AWS of liquidity” for external developers. Instead of launching proprietary mobile apps or maintaining a steady stream of new perpetual contracts, the team delegated frontend innovation to third parties via Builder Codes.

In the short term, this transition created vulnerabilities. Competitors, maintaining a fully vertical model, accelerated the launch of new products without compromises. Lighter, in particular, not only replicated all of Hyperliquid’s products but also introduced missing features—such as spot markets, perpetuals on stocks and forex—maintaining full control over the innovation cycle. With a points season still active pre-TGE, Lighter captured a significant market share, currently around 25%, benefiting from the classic DeFi liquidity “rental” phenomenon.

Hyperliquid’s strategic shift transferred initiative to external developers at a time when the ecosystem was not yet mature enough to support it. The infrastructure was still in early stages, developers lacked Hyperliquid’s established distribution capacity, and the market seemed to favor platforms with faster innovation in the short term.

HIP-3 and Builder Codes: Hyperliquid’s Return to the Top via Infrastructure

While 2025 marked a period of strategic transition, 2026 promises to be the year of redemption. Although competitors have replicated current features, true innovation continues to come from Hyperliquid. The real strength of this new model lies in domain specialization: developers building on Hyperliquid benefit from an evolving infrastructure and can optimize their products more effectively than fully vertical players like Lighter.

HIP-3, the protocol enabling developers to launch customized perpetual markets, is still in early stages but is already catalyzing a vibrant ecosystem. Projects like @tradexyz for stock perpetuals and @hyenatrade for USDe trading terminals are just the beginning. Experimental markets such as @ventuals (pre-IPO exposure) and @trovemarkets (niche assets like Pokémon or CS:GO) demonstrate the platform’s versatility. By 2026, HIP-3 volume is expected to represent a significant share of total trading on the platform.

The true innovation lies in the virtuous cycle created by the integration of HIP-3 and Builder Codes: any frontend integrated with Hyperliquid immediately accesses the entire HIP-3 market, offering its users exclusive products. This strongly incentivizes developers to launch markets via HIP-3, knowing they can be distributed on any compatible frontend—from Phantom to MetaMask and beyond—thus accessing new liquidity sources.

Numbers confirm this: Builder Codes have already generated significant revenue and show accelerated growth in daily active users, mainly from native crypto applications like Phantom, MetaMask, and BasedApp. But the real potential lies beyond this: Hyperliquid is laying the groundwork for super-apps built directly on the platform, designed to attract users entirely outside the crypto ecosystem.

The shift from “queen of perpetuals” to “global infrastructure for decentralized finance” is a long-term bet. In the short term, Hyperliquid may continue to lose market share to more aggressive competitors in immediate user acquisition. But looking ahead to 2026 and beyond, building this infrastructure could prove to be the strategic move that transforms Hyperliquid into the hub of decentralized global finance—no longer just a trading platform, but the foundational infrastructure on which everything else is built.