Article written by Jeroen Nieuwkoop, Chief Operating Officer, Hyperliquid Strategies Inc
Hyperliquid Strategies Inc is a digital asset treasury company. We hold HYPE on our balance sheet, we are listed on the Nasdaq, we stake and deploy our HYPE in the Hyperliquid ecosystem to earn yield and the primary thing our shareholders own when they own us is exposure to the Hyperliquid ecosystem in an equity wrapper. That is an accurate description of what we are. It is not a complete description of everything that we do.
A meaningful share of our day-to-day work is “translation”. Hyperliquid is one of the most innovative venues to have emerged in markets in the last decade, but the traditional institutional audience (aka “TradFi”) often still lacks the conceptual bridges to fully understand and engage with it. That’s where we, and many others, come in: to provide introductions, help understand potential use cases and highlight some of the core principles that make Hyperliquid a uniquely attractive market structure.
This note highlights three compelling features of Hyperliquid that regularly surface during our translation efforts — features a TradFi practitioner should care a great deal about when they are presented in language they already use:
- Continuous price discovery. Markets that trade 24/7 with no session breaks — eliminating weekend gap risk and enabling real-time mark-to-market across the full week.
- Distribution infrastructure. Plug-and-play connectivity that lets institutions offer clients access to a deep, liquid central limit order book and source liquidity without having to build the underlying matching engine, custody rails, or risk systems themselves.
- Transparent, rules-based governance. Onchain, transparent rules and governance that make the venue a viable counterparty within institutional risk management frameworks.
The 168-hour market
Traditional markets are not continuous. US equities close at 4pm Eastern Time. CME oil and gold have weekend halts. Foreign exchange markets thin out significantly on weekends.
The consequences are well understood: risk does not pause when the venue does. A geopolitical event on a Saturday morning, an OPEC communique, a regional conflict escalation, none of these wait for Monday. These events create real exposure that practitioners cannot hedge, modify, or exit until trading resumes. The standard mitigation, flattening exposure into Friday's close, is itself a cost: it is an opportunity foregone every weekend in exchange for the absence of an unhedgeable tail.
Hyperliquid, by virtue of being a continuously settling onchain venue with no operating hours, does not have a weekend. For a TradFi desk holding exposure, whether that is a direct allocation, a basket of equities, or an ETF inventory, Hyperliquid has turned into one of the very few practically available venues that does not close while the risk continues to compound.
This is exactly what we saw on January 30, 2026, when silver trading and volatility exploded on a Friday and continued to trade in record volumes (in perp form) on Hyperliquid. Similarly, in early March the Iran conflict broke out on a Friday, causing record volumes in oil-related perps trading during the following weekend (and days and weekends following).
Note: Silver Perps Trading represents trading volume for all Silver perps pairs on HIP-3; Oil Perps Trading represents trading volume for BRENTOIL and CL perps pairs on HIP-3.
The point that has started to attract mainstream media attention is price discovery. When a Saturday news event moves the asset class, the print on Hyperliquid is increasingly the print that the rest of the market references when it reopens. Pricing on the platform over the weekend is read by sophisticated participants as a leading indicator for Monday's spot direction. This is not because Hyperliquid has been designated as a reference venue; it is because the orderbook is real, the liquidity is real, and there are not many other places one can transact at scale on a Sunday afternoon. The market votes with its volume. A growing body of research has emerged to prove this point.
The supporting evidence has become quite compelling (especially the work done by @shaundaevans at Blockworks Research and the related weekendmarkets.xyz/analytics) and it consistently points the same way: across a broad set of weekend observations spanning equities and commodities through February and March 2026, Hyperliquid's final weekend price was, more often than not, a better guide to where an asset would actually reopen in traditional markets than the preceding Friday's close.
Source: Blockworks Research
The improvement was not marginal. Hyperliquid beat Friday's close as a reopen estimate in roughly four out of five cases, cut the median reopen error by more than half, and the move it implied over the weekend tracked the move TradFi venues realized at the reopen almost one-for-one. The signal was strongest exactly where it mattered most: during the weekends that genuinely repriced an asset and where Friday's close had become the stalest benchmark.
The benefits of continuous trading extend beyond convenience. Continuous trading is a structural improvement to market efficiency: prices move whether traditional venues are open or not, and the discontinuities and overnight gaps that session-based markets generate — with their attendant hedging costs and opening reset risks — simply do not arise. The structural improvement to market efficiency is a benefit that accrues to every participant, not only to those carrying exposure into a weekend.
This type of benefit is not confined to weekend trading only, or even to assets that already trade publicly. The same logic — a continuous, real orderbook pricing a gap that a legacy mechanism leaves unpriced — has begun to extend to private companies ahead of their listings through so-call pre-IPO perps (“IPOP”).
The first such market, TradeXYZ’s IPOP on Cerebras, was highly successful in attracting material trading volume through the month of May ahead of Cerebras’ public listing on May 14, 2026. A name that would historically have only been priced through gated allocations and a single opening auction was continuously and closely priced by an open orderbook for weeks beforehand. Wall Street traders were observed pulling up the IPOP mark alongside Bloomberg as a live valuation reference before the public open.
Source: Hyperliquid Strategies Inc (Internal Research)
With Cerebras showing that an IPOP could both support meaningful liquidity and anticipate the public cross, TradeXYZ moved from validation to scale. Following news that SpaceX could list as early as June 12 in what is likely to be the largest stock-market debut in history, TradeXYZ launched a live SpaceX IPO, which immediately became active and attracted materials trading volumes.
Source: Hyperliquid Strategies Inc (Internal Research)
These two markets point in the same direction as the weekend research: where a real, continuous market exists, price discovery tends to migrate toward it.
For a portfolio manager holding assets that may be subject to weekend events and related volatility (which in practice means every portfolio manager), all of this is worth absorbing. The weekend is no longer a black box between two closes. It is an open and continuous market with a published price, and that market is likely on Hyperliquid.
Builder codes and the distribution opportunity
Continuous markets are the structural feature that comes up the most in our conversations with trading desks. For institutions thinking about Hyperliquid not necessarily as a venue to trade on but as infrastructure to build on and provide access to, another interesting feature is the builder code system.
A builder code is a permissionless way for any external front-end, wallet, broker, or platform to route order flow into Hyperliquid's core execution engine and capture a share of the resulting trading fees. The distribution platform does not need to build a matching engine. It does not need to run a market-making program. It does not need to warehouse risk or maintain its own orderbook. It simply connects to Hyperliquid, brands its own user experience, and shares in the economics of the flow it brings. A TradFi analogy may be the separation between exchange and brokerage: a retail broker does not build the NASDAQ; it distributes access to it and is compensated for routing flow. Builder codes are the onchain expression of a similar split between distribution and infrastructure.
What this means for institutions is straightforward and still significantly under-appreciated. Building a competitive trading venue from scratch is enormously capital-intensive. The hard parts (matching engine, liquidity programs, market-maker relationships, surveillance, settlement infrastructure) are the parts that take years and substantial capital investment to get right. We estimate that the market-making costs alone would be between $100-$200m per year to replicate Hyperliquid’s liquidity.
Builder codes let an institution skip all of that and focus on what they are good at: building client relationships, distribution networks, customized user experiences, and the compliance overlay appropriate to their jurisdiction. The integration itself is open and engineering-light. There is no negotiation with a venue operator, no bespoke licensing arrangement, no permissioned gates.
The model is not theoretical. Builder codes have already routed more than USD 237 billion in perpetual trading volume to Hyperliquid and generated in excess of USD 75 million in fees for the platforms operating them. The single most striking proof point is Phantom, the provider of non-custodial wallets, which has driven more than USD 40 billion in trading volume and earned more than USD 20 million in fees in less than a year. Such numbers describe a working channel, not a roadmap.
Source: https://hyperscreener.asxn.xyz/builder-codes (as of May 19, 2026)
Explaining this to traditional financial institutions is usually a revelation. They are accustomed to growth opportunities that are capital-intensive and low-margin, and that, more often than not, cannibalize existing revenue or profit pools. Instead, the builder code opportunity is low on capital requirements, high on margin and derived from a market that users previously didn’t have access to (perps).
The recent launch by Hyperliquid of additional markets (in the form of HIP-3 and HIP-4) makes the builder code proposition even more compelling. The hugely successful launch of HIP-3 introduced perpetual markets in any reference asset, significantly widening the “product” universe to include everything from major stock indices to commodities to foreign exchange to equities.
Represents HIP-3 percentage share of 7-day trailing perps trading volume on Hyperliquid. Source: DeFiLlama (as of May 19, 2026)
The more recent introduction of HIP-4 further extended the market range to include outcome markets, such as options and prediction markets.
We find ourselves an interestingly direct illustration of how wide that “product” universe has become: our own stock is now one of those markets. A HIP-3 perpetual referencing PURR, our Nasdaq-listed stock, trades on Hyperliquid under the ticker “PURRDAT”.
The recursion is worth pausing on. A company whose purpose is to give traditional investors an equity wrapper around the Hyperliquid ecosystem now has that very equity referenced as a perp on the venue it is built around — deployed permissionlessly, through the same HIP-3 mechanism that lets any builder list any reference asset. We did not create it and we do not operate it; it simply exists because the rails allow it to and users are interested in and benefit from having another instrument to express their beliefs (continuously).
The result of Hyperliquid’s recent market extensions is the development of a single platform housing spot, perpetuals, options, and prediction markets on digital assets, commodities, foreign exchange, equities and indices under one cross-margin risk engine. A user can create a portfolio with offsetting exposures across spot, futures, options, and other event-driven instruments without having to post margin separately at each venue. Capital is no longer trapped at the boundaries of fragmented venues. Hyperliquid collapses those boundaries into a single risk engine.
The practical consequence is that Hyperliquid has become the most capital-efficient way to access spot, perpetuals, options, and prediction markets. All accessible in a single venue, with deep liquidity in each.
For institutional finance, this combination is hugely attractive. A venue that offers continuous operation, distribution economics through builder codes, and a cross-margined product surface spanning spot, perpetuals, options, and prediction markets compresses both the capital cost and the operational complexity of expressing a multi-product view.
Where a TradFi institution today manages relationships, integrations, margin pools, and risk surveillance across multiple venues, Hyperliquid offers a single venue, a single integration, and a single risk surface. For an allocator, a wealth platform, or a broker building out a derivatives product, that is a structural cost advantage rather than a tactical one. None of it, however, is usable at institutional scale unless the venue itself can be underwritten, which is a different question, and one of rules.
Transparency as the precondition
None of the above matters if the venue cannot be diligenced. Institutional capital does not allocate to venues it cannot model, and the historical objection to digital asset venues from a TradFi standpoint has always been the same: opaque rules, discretionary intervention, and dispute resolution that is difficult or impossible to anticipate. The result, from an institutional risk perspective, is unmeasurable tail risk. That is disqualifying for most pools of capital regardless of how attractive the upside looks.
Hyperliquid's structural answer to this is not a marketing claim about being trustworthy; it is an architectural property of the venue. The orderbook is public, free and accessible to anyone. The matching logic is published. Liquidations are deterministic, public, and post-able to a transaction explorer in real time. The rulebook is the code, and the code is changed by validator vote rather than by operator discretion.
That last point is sometimes harder to convey in conversation. Hyperliquid’s transparency extends beyond its architecture to the governance of the venue itself. Unlike a traditional exchange whose corporate operator can amend its rulebook, the Hyperliquid protocol is run by a permissionless validator set (currently 24 active validators and changing soon to 27 validators).
In May 2026 we launched a validator on Hyperliquid together with Unit Labs — operated as Hyperliquid Strategies x Unit — with the majority of the initial stake delegated from our treasury HYPE, custodied at Anchorage Digital Bank.
There were many reasons that drove our decision to launch a validator (among them, the opportunity to partner with Unit Labs, the leading deployer in the Hyperliquid ecosystem and parent company of Unit and TradeXYZ), but first and foremost we wanted to actively contribute to the governance of Hyperliquid. We believe that launching professional-grade validation infrastructure contributes directly to the decentralization and resilience of the Hyperliquid ecosystem.
Getting back to governance, substantive changes to rules require an onchain majority vote of staked HYPE. Even the mechanism by which protocol revenue accrues to the HYPE token — the Assistance Fund is a Hyperliquid protocol-level mechanism that automatically routes approximately 99% of platform trading revenue into open-market purchases of HYPE — sits under that same governance, not under operator discretion.
For an institutional risk manager accustomed to underwriting venue risk by reading an exchange’s rulebook and forming a view on the integrity of the operator behind it, this is a structurally different question: there is no single operator with the discretion to change the rules, and the changes that do happen are observable onchain.
The practical consequence is that a risk memo on Hyperliquid can be written against actual mechanics rather than against press releases. A counterparty review can reference observable behavior of the venue under stress rather than its operator's account of that behavior. That is not a trivial difference. It is, in many cases, the difference between a venue an institutional allocator can engage with and one it cannot.
There is a related dimension that comes up less often than it should. Because every transaction on Hyperliquid is published to the chain in real time, the venue is a uniquely hostile environment for insider trading or price manipulation. Where in traditional markets surveillance depends on after-the-fact data requests, regulatory subpoenas, and venue-supplied tapes, on Hyperliquid the audit trail is the venue itself. Regulators, law enforcement, and counterparties can observe activity directly, without intermediation. That property is a deterrent to misconduct in its own right and it materially lowers the cost of surveillance, detection, and investigation.
Hyperliquid is not risk-free; no market venue is. What can be said is that the risks are measurable, the rules are disclosed in advance, and the disclosures are continuously verifiable. That is the language institutional risk managers speak. For many TradFi practitioners, encountering a market venue that meets this bar is itself novel.
Where HSI fits
Hyperliquid Strategies sits at the intersection of TradFi and DeFi. In the long run, these terms may not retain much of their meaning and we will all operate in the integrated world of global finance (which will likely have migrated to run primarily on blockchain rails).
But for now, as we are in the midst of an accelerating integration and migration to the (Hyperliquid) blockchain, a big part of our role is to engage with traditional financial institutions who are evaluating Hyperliquid for the first time, sometimes by looking to take a position in our equity, sometimes by seeking direct exposure to the HYPE token and sometimes by exploring opportunities to participate in the Hyperliquid ecosystem.
Many of our conversations start with translating concepts and mapping them onto frameworks that TradFi institutions are familiar with: what does tokenomics mean, what are builder codes, what does HIP-3 and HIP-4 mean, how to think about validator economics and staking rewards. None of these concepts are novel to anyone deep in the Hyperliquid ecosystem. Many of them are novel to the institutions we interact with, but they are eager to learn and they are starting to adopt their organizations and formulate engagement strategies.
One of the important takeaways then is that it is still very early days and the opportunity for the Hyperliquid ecosystem to expand its institutional reach is substantial. The infrastructure to support institutional flow on Hyperliquid is already there. What is being built now are the conceptual bridges.
HSI hopes to be one of many bridges and bring many financial institutions into the Hyperliquid ecosystem. This is one of the reasons we think the role of a digital asset treasury company in this ecosystem is worth more than the sum of its tokens.
About Hyperliquid Strategies Inc
Hyperliquid Strategies Inc (NASDAQ: PURR) is a digital asset treasury company whose primary focus is to maximize shareholder value through accumulating HYPE, the native token of Hyperliquid, a high-performance blockchain custom-built to house all of finance. HSI aims to provide capital-efficient and productive access to the HYPE token for U.S. and institutional investors, generating compounding shareholder returns that individual holders may not be able to replicate through staking, yield optimization, and active ecosystem engagement. HSI is currently the largest HYPE-focused digital asset treasury vehicle capitalizing on Hyperliquid’s rapid growth and providing exposure to one of the largest and fastest growing revenue pools in digital assets.
For more information, please visit www.hypestrat.xyz.
