Hyperliquid Bridging and the Coming Liquidity Deluge

The Hyperliquid team has made one good decision after another, starting with the clear and singular goal of building the best exchange on the planet. Meeting that goal takes two things: Execution, which they’ve got locked down; and liquidity, which is a little more complicated. 

One answer to the liquidity challenge is the wealth effect created by the very successful Hyperliquid airdrop. But of course, you need to be able to reliably trade a much broader variety of assets, and since HL is a self-contained Layer 1 blockchain, that means bridging tokens, both to Hyperliquid’s layer 1 perpetual swap exchange, and to the parallel Hyperliquid EVM, where HypurrFi and other smart-contract protocols live.

Along with airdrop wealth and new stablecoins coming online (such as our own USDXL), bridging is a third massive source of new liquidity on Hyperliquid. Even a quick glance at relative scale drives the point home: the total market cap of HYPE is around $4 billion, while Bitcoin’s is over $1.6 trillion – almost 446 times higher. 

That means recruiting just a tiny slice of Bitcoin liquidity will have an outsized impact on Hyperliquid – and that’s already happening. In its first two weeks in operation, the bridging solution Unit added a stunning $58m USD worth of Bitcoin liquidity (UBTC) to the Hyperliquid system - nearly 1.5% of the total value of HYPE. That has since grown to nearly $100m in BTC deposits, and with growing awareness of the opportunity on Hyperliquid, that imported BTC liquidity can be expected to keep growing. 

Bridged ETH went live in early April, and now SOL is imminent. Each will unlock more liquidity -  and entice new users. Maybe the most interesting assets are the ones that, like BTC, lack robust native DeFi – think Cardano and ADA, Ripple and XRP, Hedera and HBAR, or Bitcoin Cash, whose holders are acutely hungry for DeFi opportunities.

Depending on how things go, Hyperliquid could swallow major portions of those networks’ value, and put them to work not just for spot or derivatives trading on the DEX, but as collateral for lending or stablecoin issuance via the EVM layer. In other words, onboarding XRP benefits all Hyperliquid users, regardless of how they feel about XRP.

Crucially, like so many other aspects of the Hyperliquid ecosystem, the leading bridging solution is doing things the right way. Its consensus-based Guardian Network enables truly non-custodial bridging, with users keeping full control of their assets at all times. 

For an exchange, liquidity is paramount: it makes everything better. This fantastic deep dive on Unit lays out all the ways that reliably-bridged native assets will make the user experience better – things like settlement speed, healthy liquidations, and native price discovery to diversify away from reliance on oracles.

The key takeaway here is simply just how much further Hyperliquid can grow as new assets are onboarded. That’s a clear roadmap of successive liquidity unlocks. 

An entire ocean is waiting: Get your boat in the water now, and you’ll rise with it.

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