Felix Protocol vs Hypurr.fi

Felix Protocol

Felix Protocol is the primary stablecoin issuance and money market platform on Hyperliquid's HyperEVM, functioning as both a collateralized debt position (CDP) engine and a variable-rate lending marketplace. Built natively on HyperEVM, Felix has established itself as one of the largest DeFi protocols in the Hyperliquid ecosystem, having crossed $1 billion in total value locked in September 2025 before settling to approximately $440 million TVL by October 2025. The protocol's core thesis is that Hyperliquid's on-chain liquidity and composability create the ideal environment for a stablecoin primitive that earns real yield for its users rather than extracting value from them. WHAT IT IS Felix operates two distinct but complementary products: a CDP system that mints feUSD (a dollar-pegged synthetic stablecoin) against on-chain collateral, and Vanilla Markets, which are variable-rate lending pools for borrowing and earning yield against major assets. The protocol has also launched USDhl, a fiat-backed, T-bill-collateralized stablecoin powered by M0 (a wholesale dollar infrastructure), broadening Felix's stablecoin suite beyond purely algorithmic constructions. Together, these products position Felix as the stablecoin factory and lending backbone for the HyperEVM ecosystem. HOW IT WORKS The feUSD CDP system is built on a fork of Liquity v2's codebase, modified with additional risk controls suited to Hyperliquid's asset landscape. Users deposit accepted collateral — HYPE, wrapped BTC (UBTC), and liquid staking tokens like kHYPE — into Troves (individual CDP vaults) and mint feUSD against it at a conservative 40% loan-to-value ratio. This is notably lower than most DeFi lending platforms, a deliberate choice to limit systemic risk given the relative volatility of the collateral base. feUSD holders can redeem their tokens for $1 worth of underlying collateral at any time, and a Stability Pool absorbs liquidated positions, distributing collateral and earned interest to Stability Pool depositors. Interest rate selection is borrower-controlled, but positions with the lowest interest rates face first-redemption risk if feUSD depegs below $1 — a soft liquidation mechanism that enforces peg discipline. Vanilla Markets, the second pillar, are variable-rate lending pools built on Morpho's lending infrastructure. Lenders deposit stablecoins (USDhl, USDe, USDT0, USDH) and earn variable interest, while borrowers post collateral (HYPE, kHYPE, UBTC) to borrow. Interest rates adjust algorithmically with pool utilization, and liquidations execute automatically when a borrower's health factor falls below 1. All positions are over-collateralized. The July 2025 CoreWriter upgrade — which enables HyperEVM smart contracts to write data to HyperCore — means Felix can now route liquidations directly through HyperCore's orderbook rather than AMM pools, reducing slippage and creating tighter integration with Hyperliquid's core liquidity engine. USDhl, the third product, is a fiat-backed stablecoin issued via M0, a wholesale dollar infrastructure backed by T-bills with on-chain reserve attestations. Convertibility is enforced at 1:1 between M0 tokens and USD, and a maintained Uniswap v3 liquidity pool ensures low-friction arbitrage. The stablecoin distributes its 4%+ T-bill yield back to users as Hyperliquid incentives, split across HyperCore spot and HyperEVM liquidity pools and reweighted every two weeks. KEY FEATURES - Dual stablecoin architecture: feUSD (CDP, algorithmic peg via Liquity v2 mechanics) and USDhl (fiat-backed, M0-powered, yield-distributing) serve different user needs and risk profiles from a single platform. - Morpho-powered Vanilla Markets: Variable-rate lending pools with dynamic interest rates and automatic on-chain liquidations. Supports HYPE, kHYPE, UBTC as collateral against stablecoin borrowing. - CoreWriter liquidation integration: Since July 2025, Felix can programmatically send liquidation orders to HyperCore's orderbook, reducing slippage and execution risk during market stress. - Conservative risk parameters: 40% LTV cap on CDP positions, mint caps, admin-controlled pause mechanisms, and incremental collateral onboarding — reflecting a deliberate approach to risk management in a novel ecosystem. - Points and incentive program: An ongoing points program rewards users for minting feUSD, supplying to Vanilla Markets, and holding USDhl, creating strong growth incentives while the governance token remains unlaunched. TEAM AND BACKING Felix has operated without publicly naming its founding team, maintaining a degree of pseudonymity common in the Hyperliquid ecosystem. The project launched on HyperEVM shortly after the mainnet EVM became available in early 2025 and has not announced formal venture funding rounds as of the time of writing. The protocol operates under the usefelix.xyz domain and has an active development roadmap that includes "Chapter 2" — a planned expansion expected to unify incentive structures across HyperCore and HyperEVM and introduce new collateral types and evolved risk parameters. Community messaging has described Chapter 2 as a significant protocol upgrade aligned with full CoreWriter integration. Felix has maintained a partnership with Hyperion DeFi, a NASDAQ-listed company that has integrated with Felix's broader product suite. TRACTION AND METRICS Felix launched on HyperEVM in early 2025 and grew rapidly alongside the broader HyperEVM ecosystem. By June 2025, the protocol had crossed $100 million in outstanding loans — a milestone reported by The Defiant. September 2025 marked its all-time high with over $1 billion in TVL, as HyperEVM total TVL itself surged 350% in two months. As of October 2025, Felix held approximately $440 million in TVL, making it the second-largest native DeFi protocol on HyperEVM by this metric behind HyperLend. The protocol has accumulated significant volume through its Stability Pool mechanism and Vanilla Markets, with HYPE and UBTC serving as the primary collateral assets driving growth. An active points program has sustained user engagement and encouraged protocol experimentation. COMPETITIVE POSITION Within the HyperEVM ecosystem, Felix competes most directly with HyperLend for lending market share. Felix's differentiation lies in its CDP stablecoin product (feUSD), which HyperLend does not offer, and in the more conservative, risk-adjusted design of its collateral parameters. Versus Liquity on Ethereum, Felix inherits architectural inspiration but layers in pause mechanisms and admin controls that Liquity deliberately avoids — a trade-off between censorship resistance and pragmatic risk management. Against MakerDAO/Sky on Ethereum, Felix benefits from Hyperliquid's throughput and HyperCore composability. The USDhl product competes with Ethena's USDe and other yield-bearing stablecoins, but is differentiated by its M0 T-bill backing and distribution of real yield back to Hyperliquid participants rather than to protocol treasuries. HYPERLIQUID INTEGRATION Felix is architected exclusively for HyperEVM and deeply integrates with HyperCore at multiple levels. The feUSD CDP system accepts HYPE (HyperCore's native staking token) and kHYPE (Kinetiq's HyperCore-staked liquid staking token) as collateral — assets that are native to the Hyperliquid L1. The Vanilla Markets build on Morpho, which itself relies on HyperEVM's EVM execution. USDhl's yield distribution is routed through HyperCore spot market liquidity incentives. Critically, CoreWriter integration allows Felix to place liquidation orders directly on HyperCore's CLOB rather than routing through AMM pools — making Felix one of the first protocols to actively exploit the bidirectional HyperCore-HyperEVM bridge at a liquidation engine level. Felix's points program allocates rewards across both HyperCore spot and HyperEVM, incentivizing the dual-layer activity that is central to Hyperliquid's long-term design. RISKS AND CONSIDERATIONS The 40% LTV ratio provides a reasonable buffer against collateral volatility, but HYPE is the dominant collateral and is itself a relatively illiquid and volatile asset by traditional standards. A severe HYPE price shock could trigger cascading liquidations that test the Stability Pool's absorptive capacity and the CoreWriter liquidation pipeline. The feUSD peg mechanism's reliance on redemption pressure means that during market stress, borrowers with low interest rates face forced liquidation through redemption — a mechanism that is economically sound but can create adverse user experiences. The protocol's admin-controlled pause functionality and mint caps represent meaningful centralization versus Liquity's immutable design. Team pseudonymity creates limited accountability in the event of critical vulnerabilities or governance disputes. Governance token launch (not yet live as of the research period) introduces tokenomics uncertainty. Dependency on Morpho for Vanilla Markets means Felix inherits any bugs or risks from the Morpho lending infrastructure. Overall, Felix is well-designed for its environment but carries ecosystem concentration risk — its growth is tightly coupled to HYPE's price trajectory and HyperEVM's adoption curve.

Hypurr.fi

Hypurr.fi (HypurrFi) is a lending and borrowing protocol built natively on HyperEVM, Hyperliquid's EVM-compatible execution environment. It allows users to supply Hyperliquid-native assets as collateral to earn yield and borrow against those positions, including the ability to mint USDXL—a synthetic dollar denominated in U.S. dollars—that can be used across HyperEVM applications. The protocol is non-custodial, permissionless, and built specifically around the asset universe native to Hyperliquid, making it one of the earliest and most purpose-built lending protocols in the ecosystem. How It Works HypurrFi operates as an overcollateralized supply-and-borrow model governed by smart contracts on HyperEVM. Users deposit assets into liquidity pools, which simultaneously serve as collateral and lending supply. Other users borrow from those pools up to a collateralization limit defined per asset. The protocol features both pooled markets—where liquidity is shared across borrowers and lenders of a given asset—and isolated markets, where specific collateral/borrow pairs are ring-fenced to limit cross-contamination risk. The protocol's core design supports leveraged looping strategies: a user deposits an asset such as HYPE, mints USDXL against that collateral, uses the USDXL to purchase more HYPE from an exchange, and deposits the additional HYPE as further collateral. This loop can be repeated multiple times, creating leveraged long exposure to the underlying asset's price appreciation. The strategy amplifies both gains and losses proportionally. USDXL is HypurrFi's synthetic dollar. Users deposit digital asset collateral and gain the ability to borrow or mint USDXL against it. The synthetic dollar is designed to maintain a soft peg to the U.S. dollar through overcollateralization requirements and is intended for use across Hyperliquid EVM applications, with potential expansion to other blockchain systems in the future. Yield is distributed dynamically based on supply and demand conditions within each pool, meaning interest rates adjust algorithmically to market conditions. Interaction with HypurrFi happens exclusively through self-custodial wallets. The protocol does not have possession or control over user assets at any point. All transactions execute via publicly accessible and permissionless smart contracts, with no intermediaries involved in lending, borrowing, or liquidation decisions. Key Features - Overcollateralized Lending with Isolated Markets: Both pooled and isolated market structures allow for differentiated risk profiles, enabling higher-risk assets to be listed without threatening the stability of core markets. - USDXL Synthetic Dollar: Users can mint a U.S. Dollar-denominated synthetic asset against their collateral for use across the HyperEVM ecosystem, enabling leveraged strategies without selling underlying positions. - Leveraged Looping Strategies: The protocol is explicitly designed to support leveraged long exposure through recursive deposit-and-borrow cycles, giving traders amplified price appreciation on Hyperliquid-native assets. - Hyperliquid-Native Asset Focus: The protocol prioritizes assets native to the Hyperliquid ecosystem, including HYPE, with plans to add bridged assets from other chains as they become available on HyperEVM. - Non-Custodial and Permissionless: Users maintain full self-custody at all times, with all protocol mechanics governed by open, publicly auditable smart contracts. Team and Backing HypurrFi's team has not been publicly identified, maintaining pseudonymity consistent with many early DeFi protocol teams. External funding details have not been disclosed. The protocol notes that it will be governed by a decentralized network of users in the future, suggesting a planned token and governance structure, though specifics had not been announced as of early 2026. The protocol operates a points program for early users, weighted toward USDXL-related activities such as depositing HYPE, minting USDXL, staking USDXL, and providing USDXL liquidity on partner DEXes—suggesting the points will eventually convert into a governance token allocation. Traction and Metrics HypurrFi launched on HyperEVM as one of the first lending protocols in the ecosystem. Specific TVL figures have not been publicly announced with consistency, but the protocol has attracted activity through its points program and the broader enthusiasm for yield-generating strategies on Hyperliquid. The protocol's lending pools are denominated in Hyperliquid-native assets, meaning TVL growth is directly correlated with asset inflows to HyperEVM. HypurrFi competes in an ecosystem where Morpho (via Felix Protocol and HyperBeat) has established over $600 million in deposits by late 2025, setting a high baseline for what is achievable in HyperEVM lending but also suggesting strong underlying demand for lending services on the chain. Competitive Position HypurrFi's primary competitor on HyperEVM is the Morpho-powered ecosystem, specifically Felix Protocol and HyperBeat, which together attracted $600 million in deposits. Morpho's infrastructure carries the credibility of a battle-tested multi-chain protocol with a16z and Variant backing, and Felix has introduced hUSDL—a competing synthetic dollar with treasury backing and HYPE buyback mechanics. HypurrFi's competitive differentiation lies in its native focus on leveraged looping and its isolation-market architecture, which enables it to list a broader range of Hyperliquid-native assets that Morpho-based vaults may not support. The protocol's isolated market structure offers a risk management approach similar to Euler Finance or Morpho Blue, but purpose-built for the HyperEVM context. In the broader DeFi lending landscape, HypurrFi is a small protocol relative to Aave, Compound, or even Morpho globally. Its relevance is specifically tied to the Hyperliquid ecosystem and the assumption that HyperEVM will continue to attract capital and new asset types. Hyperliquid Integration HypurrFi is exclusively deployed on HyperEVM and is designed around Hyperliquid-native assets. HYPE, the primary native token of the Hyperliquid L1, serves as a core collateral asset. The protocol's USDXL stablecoin is intended to be the synthetic dollar layer for HyperEVM applications, potentially usable as collateral in HIP-3 perpetual markets and across other HyperEVM protocols. The leveraged looping strategies the protocol facilitates are designed specifically for traders who already hold HYPE or other Hyperliquid-native assets and want to amplify their exposure without accessing centralized venues. Risks and Considerations HypurrFi carries several notable risks. Smart contract risk is inherent in any DeFi lending protocol, and the non-custodial nature means users bear full responsibility for understanding liquidation thresholds and collateralization requirements before entering positions. Leveraged looping strategies are particularly high-risk: a decline in HYPE or other collateral assets can trigger rapid liquidations across multiple looped positions simultaneously, amplifying losses beyond what a simple price decline would suggest. The USDXL synthetic dollar's stability depends on overcollateralization and liquidation efficiency—if liquidations fail during periods of high volatility or low liquidity, USDXL could lose its peg. The team's anonymity, while not unusual in DeFi, limits accountability and makes external assessment of development capacity difficult. Finally, the protocol's dependence on a single chain (HyperEVM) and a single primary asset (HYPE) creates concentration risk: any issue with Hyperliquid's infrastructure or a sustained HYPE bear market would disproportionately affect HypurrFi's viability.

Choose Felix Protocol if you...

• ✓Want a lending & borrowing solution on HyperEVM
• ✓Prefer a verified and vetted protocol
• ✓Need features like CDP and feUSD
• ✓Need: CDP lending protocol on HyperEVM — mint feUSD stablecoin

Choose Hypurr.fi if you...

• ✓Want a lending & borrowing solution on HyperEVM
• ✓Need features like leveraged and USDXL
• ✓Need: Leveraged lending marketplace — home of USDXL synthetic dollar