Is Hyperliquid (HYPE) Losing Its Perp Edge to Lighter?

The decentralized derivatives market has long been a battlefield for innovation, with platforms like Hyperliquid and Lighter vying for dominance in perpetual contracts (perp) trading. By late 2025, the competition has intensified, driven by shifting user preferences, fee structures, and execution efficiency. This article examines whether Hyperliquid, once the undisputed leader in perp DEXs, is losing its edge to Lighter-a platform that has leveraged zero-fee models and privacy-centric design to attract traders.

Execution Cost Efficiency: Zero Fees vs. Tiered Pricing

Hyperliquid's fee structure has traditionally favored large-volume traders through a tiered model, where higher trading activity reduces marginal costs according to analysis. While this benefits institutional players and high-net-worth individuals, it creates a barrier for smaller traders with capital between $1,000 and $100,000, who face higher effective costs compared to Lighter according to on-chain data.

Lighter, in contrast, has adopted a zero-fee model for standard accounts, shifting the cost burden to slippage rather than transaction fees according to reports. This approach has proven particularly appealing to retail and high-frequency traders, who prioritize low-cost entry over microsecond-level latency. According to on-chain data, Lighter's Ethereum L2 architecture further enhances cost efficiency, enabling low-latency execution while maintaining competitive pricing according to a 2025 deep dive.

However, Lighter's strategy is not without trade-offs. Retail users experience a 300-millisecond delay in execution, a deliberate design choice to balance cost and speed according to data. For hyper-competitive traders, this delay could be a drawback. Yet, for most retail participants, the lower total execution costs outweigh the latency penalty.

Privacy and Front-Running Risks

Hyperliquid's transparency model, while beneficial for market visibility, exposes large positions and liquidation points to public scrutiny. This has led to concerns about front-running and targeted liquidations, particularly for large capital holders according to analysis. In contrast, Lighter's privacy-centric approach obscures user trading and holding data, offering a critical advantage for institutional investors and those wary of predatory trading strategies according to market reports.

Volume Migration: A Tectonic Shift in Market Share

The most telling sign of Hyperliquid's potential decline lies in volume migration trends. In May 2025, Hyperliquid commanded 80% of the perp DEX market share, bolstered by its points incentive system and first-mover advantages according to market data. By December 2025, however, its share had plummeted to 20%, while Lighter surged to 25%-a dramatic reversal driven by Lighter's zero-fee model and aggressive volume incentives according to technical analysis.

On November 28, 2025, Lighter even surpassed Hyperliquid in 24-hour DEX volume, recording $9 billion in trading activity according to volume reports. This shift reflects a broader industry trend: users prioritizing cost efficiency and privacy over traditional metrics like speed and brand recognition. Hyperliquid's pivot toward a "B2B" infrastructure model and reduced liquidity incentives has further accelerated this migration according to market analysis.

Hyperliquid's Remaining Advantages

Despite these challenges, Hyperliquid retains key strengths. It holds nearly two-thirds of the open interest (OI) across major perp DEX platforms in 2025, indicating sustained position-holding rather than speculative trading according to market data. This high OI/trading volume ratio suggests a more stable user base, contrasting with Lighter's frequent trading driven by incentives according to on-chain analysis. For traders seeking long-term exposure, Hyperliquid's ecosystem remains compelling.

Conclusion: A New Equilibrium in Perp Trading

The perp DEX landscape in 2025 is no longer dominated by a single platform. Lighter's rise underscores the power of zero-fee models and privacy features in attracting retail and institutional capital, while Hyperliquid's decline highlights the risks of over-reliance on structural advantages. For investors, the key takeaway is clear: execution cost efficiency and user-centric design are now the primary drivers of market share in decentralized derivatives.

Hyperliquid is not obsolete, but its edge has eroded. Lighter's ability to balance cost, privacy, and scalability positions it as a formidable competitor-and a potential long-term winner in the perp DEX race.