Hey Edge readers,

This week, we’re taking a closer look at HyperEVM, the new Ethereum-compatible layer built on Hyperliquid. HyperEVM integrates directly with Hyperliquid’s trading engine, promising a more seamless experience for developers building DeFi apps and for traders looking to access deep liquidity. On this edition we are going to cover all you need to know about it.

Stay sharp. 🫡

-The Exponential team

HyperEVM: A New Approach to On-Chain Trading Infrastructure

HyperEVM is an Ethereum Virtual Machine (EVM) execution environment built within the Hyperliquid Layer 1 blockchain. What makes it stand out is that it’s not a separate chain—it runs on the same consensus layer, HyperBFT, that powers Hyperliquid’s high-speed trading engine for spot and perpetual markets.

In theory, this design allows developers to build Ethereum-compatible smart contracts that can directly interact with Hyperliquid’s order books—without needing bridges or external price feeds. For example:

• A lending protocol could read real-time prices from HyperCore order books to set liquidation thresholds.

• Liquidations could be executed directly on the order book via system calls in Solidity, eliminating the need for third-party bots.

• Projects can list tokens on HyperCore’s spot auction and use those same tokens in HyperEVM smart contracts—all on the same chain, in a single state.

This tight coupling of smart contracts and trading infrastructure is a core part of HyperEVM’s value proposition. It aims to reduce fragmentation, remove friction, and unlock new types of DeFi applications.

How Does It Compare to Other EVM Chains?

HyperEVM’s architecture is unique in several ways:
✅ Unified State: No separate chains or bridges between the trading layer and smart contract layer.
✅ Direct Access to Liquidity: Smart contracts can interact directly with Hyperliquid’s order books.
✅ Ethereum-Compatible: Developers can use Solidity and standard EVM tools, but must adapt to HyperEVM’s custom environment.
✅ Alpha Stage: Features like higher throughput and advanced system contracts are still in development.

This contrasts with most Layer 2s or app chains, where liquidity is often fragmented across different layers, and bridging is required to connect applications to trading venues.

What Does This Mean for Developers?

For developers, HyperEVM combines familiar tools with new building blocks. Solidity works out of the box, so you can use standard EVM frameworks like Hardhat or Foundry. But HyperEVM isn’t just another EVM—it introduces system contracts that let your smart contracts read live prices from HyperCore order books and execute trades directly, without oracles or bots.

What’s missing? Since HyperEVM is in alpha, tooling is limited, some features like higher throughput aren’t live yet, and token standards (HIP-1, HIP-2) differ from ERC-20s, adding a learning curve. For now, HyperEVM is a sandbox for developers curious about blending liquidity and smart contracts on a single chain.

HyperEVM Ecosystem

The HyperEVM ecosystem is still in its early stages, but builders are already experimenting with new ways to combine DeFi apps and Hyperliquid’s deep liquidity. While the landscape is still taking shape, it’s an interesting mix of DeFi protocols, AI tools, and even meme coins exploring what’s possible on this architecture.

One example is Felix Protocol, a DeFi suite offering on-chain borrowing and lending. Users can mint feUSD by depositing collateral and use it for margin trading, carry trades, or spot purchases—without leaving the Hyperliquid ecosystem. Felix also offers Vanilla Markets, where traders can lend or borrow asset-native tokens like HYPE, HUSD, or USDC at dynamic rates.

On the AI side, Beats AI is exploring ways to bring AI-driven analytics and trading strategies to HyperEVM, aiming to enhance how users interact with DeFi data and markets.

In the news 🗞️

• Hyperliquid’s Hype Token Soars 84% on Buybacks, Airdrop Farming, and Market Dominance: Hype’s price surge is driven by airdrop farming, a buy-and-burn program reducing supply, and Hyperliquid’s dominance in onchain derivatives, with the protocol capturing 70% of the sector’s volume and rivaling CEXs in trading activity.

• Avalanche Transaction Activity Hits Record High on MapleStory and FIFA News: Avalanche’s daily transactions have tripled since the launch of MapleStory’s blockchain marketplace and the FIFA subnet announcement, surpassing 12.9 million per day. The surge highlights Avalanche’s growing ecosystem, though AVAX has lagged in price, down 10% this week.

• Ethereum Foundation Borrows $2M GHO on Aave to Fund Operations: The Ethereum Foundation has borrowed $2 million in GHO stablecoin on Aave, leveraging its ETH holdings instead of selling them for funding. The move marks a deeper shift into DeFi strategies for the Foundation amid ongoing debates about using ETH for operations.

Trending 📈