Felix will be launching feUSD, a CDP stablecoin on HyperEVM once mainnet goes live, and additional money markets soon after. Users will be able to borrow against collateralized assets without intermediaries, unlocking more financial workflows (e.g capture the funding rate, run a carry trade, etc.) and cross-margin capabilities. At the same time, these systems must confront an array of risks: from collateral price volatility and liquidity gaps to manipulative exploits and more. We touched on some of these tangential ideas in our previous piece focused on protocol security. Now we turn our attention to risk management.

DeFi has emerged as a pivotal innovation within crypto, with borrow-lend protocols and CDP stablecoins forming core components of on-chain financial infrastructure. We’ve seen that DeFi provides for more efficient software rails for finance, resulting in decreased costs, faster settlement, increased access, and more. However, these protocols face ongoing challenges related to security, particularly as adversarial actors develop new techniques to exploit vulnerabilities and siphon user assets.

After receiving an inflow of questions from HYPE holders on what’s next (Who are the HYPE liquid staking providers? Where can I borrow against my HYPE? When is HyperEVM going live?), Felix protocol contributors have created a straightforward breakdown of the overall Hyperliquid ecosystem as we see it.

With a revitalized fervor for DeFi since the US elections coinciding with the imminent launch of HYPE, we at Felix are excited to share more about our motivation for building on the Hyperliquid L1.