L1 Overview

Introduction

The Hyperliquid L1 is custom built around a performant derivatives exchange as the flagship native component. A perpetuals order book exchange was chosen for the following key reasons:

1. It is a realistic real-world application with more infrastructure demands than any existing L1 can handle.

2. It is the most valuable vertical in defi upon from which most user built applications would benefit.

3. It drives real users to interact with the underlying L1 infrastructure.

The Hyperliquid L1 is continually pushed by the flagship native perps DEX, leading to crucial optimizations that general purpose chains miss in their design.

Note that the L1 state includes all margin and matching engine states. Importantly, Hyperliquid does not rely on the crutch of off-chain order books. A core design principle is full decentralization with one consistent order of transactions achieved through BFT consensus.

Latency

Consensus currently uses a tuned version of Tendermint, which is optimized for end-to-end latency. End-to-end latency is measured as duration between sending request to receiving committed response.

For an order placed from a geographically co-located client, end-to-end latency has a median 0.2 seconds and 99th percentile 0.9 seconds. This performance allows users to port over automated strategies from other crypto venues with minimal changes and gives retail users instant feedback through the UI.

Throughput

Through efficient representation and batching of transactions, the Hyperliquid L1 supports 20k operations/second, where operations include orders, cancels, and liquidations. This will be sufficient for the alpha phase of retail and market makers, and further research to improve TPS will be conducted in parallel.

Implementation

Hyperliquid is consciously written from the ground up to allow for full stack optimizations. There is no reliance on the Cosmos SDK or other frameworks. The L1 state transition logic is written in Rust, and exposes an ABCI server to Tendermint.

The Hyperliquid L1 is secured by proof of stake. Staking and slashing work similarly to Cosmos chains, with more details to be released upon the launch of the native token.