In the rapidly evolving world of decentralized finance, two protocols, Hyperliquid and Euler, have captured the attention of yield seekers with headline figures that could not be more different. Hyperliquid advertises an annualized return of roughly 21.9%, while Euler boasts an eye-popping 286% APY. On the surface, the comparison seems to favor Euler, but a closer look at each protocol’s underlying mechanics reveals why these numbers could not be less alike, and why Hyperliquid’s model offers far greater long-term promise.
Hyperliquid achieves its yield through a combination of perpetual contract funding payments and a share of spot and perpetual trading fees. Every hour, traders who hold long or short positions settle a funding payment based on the gap between the contract price and an external reference price. Those peer-to-peer payments, together with fees from spot trading and liquidations, flow directly to liquidity providers without any inflationary impact on token supply. Over time this real, market-driven income typically lands in the mid-teens to low-twenties percent range, and when markets are active it can climb to around 22%.
By contrast, Euler’s spectacular 285% APY relies almost entirely on inflationary token rewards rather than organic lending interest. In practice borrowers pay and lenders earn a modest interest rate that rarely exceeds the low double digits. Euler supplements these returns by minting its own token, distributing rewards in the form of rEUL to both suppliers and borrowers, and inflating the displayed APY into the hundreds. These rewards do not compound on chain, and once token emissions slow or the market value of rEUL falls, effective yields collapse, often leaving late participants worse off.
The critical distinction lies between peer-to-peer funding and protocol-subsidized incentives. Hyperliquid’s returns derive directly from trading activity, so as long as traders maintain leveraged positions and volumes remain strong, the fees continue to flow. Euler’s rewards, by contrast, are a temporary bonus fueled by token emissions. When those emissions cease or the token price declines, the subsidy-driven yield evaporates, effectively “killing” any long-term return.
Viewed objectively, Hyperliquid stands out as the stronger project. Its sustainable, fee-driven revenue model generates genuine returns without diluting token value. It also benefits from its own high-performance Layer 1 blockchain, which processes tens of thousands of transactions per second with sub-second finality. This infrastructure underpins a fully on chain central limit order book that delivers tight bid-ask spreads and CEX-level functionality, such as up to fifty-times leverage, while preserving non-custodial security. These features attract professional traders and market makers, further deepening liquidity and reinforcing a virtuous cycle of adoption and fee generation.
Hyperliquid’s market leadership is evident in its trading volumes. In March 2025 the protocol processed $1.75 trillion of perpetual contract volume, capturing nearly 70% of on-chain perps market share. Even during a broader market downturn in April, it handled $178 billion, maintaining about the same share. Compared to its closest rival, Jupiter Perps, which averaged just $704 million of daily volume over the same period, Hyperliquid’s average daily volume of $6.4 billion speaks to its overwhelming dominance. Smaller protocols such as dYdX held barely 3% of the on-chain perps market by March.
Several factors combine to cement Hyperliquid’s supremacy. Its native Layer 1 blockchain delivers performance and reliability that far exceed what can be achieved on shared, congested networks. Its fully on chain order book ensures transparent, verifiable trade execution without hidden off chain matching. Deep liquidity and razor-tight spreads make it a natural home for high-frequency and institutional strategies. A trustless architecture removes counterparty risk, and a community-focused governance model aligns stakeholders around long-term success. Together these elements create a seamless, professional trading experience while safeguarding the yields that liquidity providers earn.
In the end, comparing Hyperliquid’s roughly 22% real yield to Euler’s fleeting 286% subsidy reveals more than a numerical disparity. It illustrates a fundamental choice between sustainable economics rooted in actual market activity and ephemeral token incentives that collapse once the emissions end. For traders and liquidity providers seeking dependable returns and robust infrastructure, Hyperliquid’s enduring model offers a clear advantage.
