Hyperliquid and Phantom Alliance: The Rise of a New Generation of Liquidity Infrastructure

Hyperliquid has recently officially entered the Solana ecosystem through a partnership with Phantom. This move is not just a simple multi-chain deployment, but rather provides Liquidity support through the Phantom wallet. Surprisingly, Phantom chose Hyperliquid over other competitors.

Unlike predecessors like dYdX and GMX, Hyperliquid's strategy is more akin to an on-chain version of a large centralized exchange. It aims to become the ultimate source and destination of liquidity for all protocols and dApps, leveraging ultra-high liquidity to become a true on-chain cornerstone.

To fully understand Hyperliquid, it is necessary to compare it with spot DEXs and other contract trading platforms. The main challenge for spot DEXs is liquidity creation, while contract DEXs need to attract and concentrate liquidity. Hyperliquid employs a unique approach that combines the efficiency of centralization with the user experience of decentralization.

Hyperliquid's HyperCore is responsible for spot and contract trading, while HyperEVM handles blockchain-related functions. This design allows Hyperliquid to maintain a balance between decentralization and centralization, while achieving ultra-high Liquidity and efficient matching.

In collaboration with Phantom, Hyperliquid is embedded into the Phantom interface. Users' SOL enters the Hyperliquid system through bridging, converts to USDC, and then serves as margin for contract trading. This method increases the flexibility of funds, allowing users to trade any asset supported by Hyperliquid, and offers leverage of up to 40 times.

However, this design also brings some security challenges, especially during periods of extreme market volatility. Users need to have a level of trust in Hyperliquid similar to that of centralized exchanges.

Hyperliquid and Phantom are both known for their strong profitability. The collaboration between the two sets up charging points at various stages, which may trigger fee reduction pressure from competitors.

This collaboration reflects that the cryptocurrency industry has entered a new stage, where simple product types can no longer support business growth. In the future, we may see more cross-platform collaborations, acquisitions, and competition.

Each market cycle is an arena for exchanges and public chains. This time, we may witness a showdown between Hyperliquid and certain large centralized exchanges, as well as competition among different public chains.