Hyperliquid: The Next Generation of American Markets

Derivatives markets are an American story of continuous innovation. Agreements first used by grain farmers, millers, and merchants to manage seasonal price risk evolved into standardized contracts traded on regulated exchanges. Today, derivatives markets reference nearly everything, including metals, currencies, equities, energy resources, the weather, and world events. Derivatives contracts evolved alongside those markets, progressing from simple agreements to increasingly sophisticated tools such as interest rate swaps, binary options, and other structures to meet changing commercial needs.

Hyperliquid represents the next era of market evolution. Hyperliquid is a public, permissionless blockchain and decentralized exchange that is purpose-built for high-performance trading. Hyperliquid demonstrates how decentralized markets promote deep liquidity, continuous price discovery, and global market participation: it gives users permissionless access and self-custody of their assets while supporting a thriving ecosystem of builders and market participants. 

Yet, U.S. law provides no clear pathway for Americans to participate in decentralized derivatives markets, leaving domestic users and builders on the sidelines as liquidity and innovation concentrate abroad.

The Hyperliquid Policy Center exists to unlock Hyperliquid’s full potential for American users and to give the builders who power its ecosystem the legal clarity and protection they need to innovate here at home. HPC is funded by the Hyper Foundation and community-aligned in its mission. Our work spans the full Hyperliquid ecosystem, with a focus on onchain perpetuals, the largest and fastest-growing category of derivatives, and the area where clear rules can do the most to advance decentralized markets in America. 

Our objective is a lawful domestic pathway for these markets that keeps American participants and builders at the center of the next generation of financial innovation.

Onchain Perpetuals: A Better Derivative, A Better Market

Perpetuals are derivatives contracts that allow two parties to take continuous, leveraged exposure relative to an underlying asset, with no expiration date. Instead of expiring and settling on a fixed date, perpetuals rely on periodic payments between the two parties that anchor the price of the contract to the underlying asset’s spot price. This payment mechanism—known as the funding rate—tethers the contract’s price to the real-world value of the underlying asset. Without the funding rate, the contract could trade at any arbitrary price disconnected from the market it references.

Compared to traditional futures that must be periodically rolled at expiration, options with complex strike and premium dynamics, or swaps that are negotiated bilaterally, perpetuals offer a simpler way for market participants to gain exposure to the assets that matter to them. Beyond their simplicity, perpetuals concentrate liquidity in a single continuous market rather than fragmenting it across time-limited contracts, and allow participants to price and hedge risk on an ongoing, low-friction basis. 

Hyperliquid has become the dominant onchain perpetuals trading venue, delivering a decentralized market structure that represents a fundamental improvement over traditional, intermediated markets: 

• Self-custody. Users hold their own collateral at all times. There is no central party that controls user funds, eliminating the risk of losing assets to an intermediary’s failure or mismanagement.

• Transparency and Verifiability. Every order, fill, cancellation, funding payment, and liquidation is recorded on a public blockchain and visible to anyone in real time, providing an unmatched level of transparency compared to traditional trading systems, where trade data is often proprietary and inaccessible. 

• 24/7 Borderless Markets. Hyperliquid is open and permissionless by design. It runs continuously on public networks, with liquidity forming across diverse geographies rather than within the walls of a single, jurisdiction-bound venue. It also attracts entrepreneurs to build related products, driving permissionless innovation that closed, intermediated systems cannot match.

Taken together, these features illustrate how onchain perpetuals promise more than a new way to trade familiar products: they represent a structural improvement in how derivatives markets can enable price discovery, deep liquidity, and broad access. Decentralized markets also promote stability and resilience through hard-coded risk controls, block-level margin checks, and provable onchain solvency, without reliance on manual intervention or human staffing. 

Consumer demand is real and growing. Perpetuals protocols processed more than $6.5 trillion in notional volume in 2025, underscoring their emergence as the dominant onchain trading instrument across core global asset classes. Now is the time for the United States to adopt new rules so that Americans can benefit from this innovation.

Why Americans are Excluded from Onchain Derivatives Markets

The American regulatory framework for derivatives markets is premised on the existence of centralized intermediaries. As the financial markets evolved, Congress constructed a unified regime for derivatives markets that relies on centralized exchanges to standardize contracts, concentrate liquidity, and supervise participants. That design reflected the commercial and technological realities of its time: trading occurred on physical floors, communication moved at the speed of telegraph and rail, and effective oversight required centralized actors to monitor trading and enforce rules.

As a result, the law embeds a core assumption that intermediaries must stand between participants and the market. Regulatory obligations, market access, and compliance mechanisms are all organized around this premise. The U.S. framework for derivatives markets channels retail trading through custodial intermediaries and limits trading to centralized venues, leaving no clear pathway for markets that do not conform to this structure.

Decentralized markets do not fit within the intermediary-based model. They operate without centralized exchanges or brokers, allowing users to interact directly with trading protocols through non-custodial tools without any third party holding onto their assets or intermediating their transactions. The functions historically performed by intermediaries, such as execution, risk management, and enforcement, are instead automated through deterministic, non-discretionary code, which can achieve the same policy objectives through software rather than the regulation of legacy institutions. 

Current law presents a barrier to lawful U.S. participation in these markets, regardless of the extent to which decentralized systems improve outcomes for markets and their participants. In practice, this leaves innovators building decentralized markets with two unfortunate options. They must either conform their projects to intermediary-based structures that forfeit the benefits of decentralization, or they must exclude American participants altogether. 

The result is predictable: innovation develops offshore, and American leadership in financial market innovation suffers.

The Road Ahead

The full dynamism of American financial innovation should not be constrained by regulation built for a different era of finance. Decentralized markets that run on deterministic, non-discretionary code can achieve core regulatory objectives natively through protocol design rather than through layers of intermediaries. HPC will advocate for durable regulatory frameworks that protect responsible innovation, define oversight in workable terms, and measure decentralized market structures by whether they deliver the right policy and consumer protection outcomes, not by whether they replicate the architecture of legacy institutions. 

That work begins with onchain perpetuals, but HPC’s mission extends across the full range of markets and financial instruments that Hyperliquid supports, including spot digital asset markets, outcome markets, tokenized securities, and the growing range of tools that open, composable protocols make possible. Through its programmable architecture and community of independent builders, Hyperliquid is poised to become the house of all finance. HPC exists to build a foundation that ensures Americans are not left out in the cold.

HPC welcomes outreach from market participants, developers, policymakers, and researchers who share our commitment to clear, workable rules for decentralized markets. We look forward to hearing from you.