The rise of Hyperliquid has made perpetuals, or perps, a dominant instrument in onchain trading over the past three years. The decentralized exchange (DEX) traded nearly $200 billion of perps in the past 30 days and has an open interest of over $11.5 billion, as of writing.
Hyperliquid accounted for 9.3% of the global aggregate perpetual open interest in early July this year, up from 6.9% in May. This increase in capital moving onchain has attracted genuine institutional interest. While custodians and compliant infrastructure are coming onboard to serve this interest, a fundamental question remains: can an institution’s internal approval workflow keep pace with a DEX that settles in milliseconds?
Compliant Infrastructure Is Built
Institutions can now hold HYPE and trade on Hyperliquid through providers they already trust. Fireblocks integrated HyperEVM in March 2025. In the past quarter, custodians including BitGo, Anchorage Digital, and Copper also added support for Hyperliquid. Talos, which builds institutional trading technology, opened Hyperliquid spot and perpetual markets to select clients in May.
Traditional finance is also participating. In March this year, S&P Dow Jones Indices licensed the S&P 500 to Trade[XYZ] for perpetual contracts on Hyperliquid. While synthetic equities have traded onchain for years, this is the first time a major Wall Street benchmark has been officially licensed for perpetual trading.
In addition, onchain yield protocols are evolving for regulated capital. Kinetiq, the largest liquid staking protocol on Hyperliquid, launched iHYPE to give institutions a permissioned way to stake HYPE. The protocol embeds institutional guardrails such as identity verification, audit-ready reporting, and curated validators into its design.
Settlement runs through regulated players. The collateral institutions post on Hyperliquid is USDC, issued by Circle, with Coinbase managing liquidity across spot, perpetual and outcome markets. For institutions, it means their trading collateral is issued and managed by familiar, regulated entities.
With the custody and access layers largely in place, institutions need to assess their own transaction approval workflows, which were not built for a market that moves this fast.
Manual Sign-offs Are Inefficient
The institutional custody approval workflow intentionally involves humans. A trader initiates a transaction, risk officers review it, and once quorum is reached, it executes. This deliberate friction is a security guardrail to prevent theft or unauthorized trades.
However, this custody design assumes the transaction can wait a few minutes for approval. Hyperliquid finalizes blocks in about 0.07 seconds, with every order, fill, liquidation, and margin update settling onchain at one-block finality. Margin is continuously recalculated, and a position that looks safe now can face liquidation a few blocks later.
Market events on October 10, 2025 are a case study in this speed. A surprise tariff announcement by the US on Chinese imports set off a sell-off across equities and commodities, and crypto followed. Data from research firm Amberdata show that $6.93 billion worth of leveraged positions were liquidated within 40 minutes, a rate of roughly $10.4 billion an hour against a normal baseline of $120 million. Hyperliquid took the hardest hit, with open interest falling 57% in a day, from $14 billion to $6 billion.
In such scenarios, waiting a couple minutes for multi-party signoffs, particularly after hours, means the position closes before the approval arrives.
Workarounds and Their Limits
To manage this conflict, institutions often separate custodied funds from trading capital. Anchorage’s linked staking and trading represents this model. HYPE tokens stay in qualified custody while acting as collateral for an external trading account.
However, this model does not address the timing concern. Regardless of how the account is linked to Hyperliquid, it must still approve network-speed transactions, or the setup becomes ineffective.
The cruder alternative is using an unmanaged hot wallet outside custody with a single key and no approval queue. But this reintroduces the dangers of a single point of failure and a meaningfully large balance waiting to be hacked.
Set the Rules Before the Market Moves
The most practical fix is to reduce the moments in a trade where humans are needed in the loop at all. Institutional risk teams should define the rules before any trade happens: which venues and trading pairs the wallet can access; how large a position can get in any single asset; how much capital can move within a given time window; and which destinations funds can be sent to. Once those rules are encoded at the wallet level, they execute automatically at the point of transaction. There’s no manual signoff sitting between a margin call and a liquidation, because there’s nothing left to sign off on.
This design moves humans from racing to approve a trade inside a single block to setting the boundaries beforehand. On a venue where positions can move from safe to liquidated within blocks, that relocation is the difference between a workflow that holds up and one that gets run over.
Institutions evaluating Hyperliquid access should be asking their custody provider one question: can your approval model execute at network speed without giving up the control that made custody necessary in the first place?
See how the Fireblocks Policy Engine lets institutional risk teams set the rules before the market moves, so trades execute at network speed without giving up the control that made custody necessary in the first place.
