Hyperliquid

Hyperliquid is a performant layer 1 blockchain (L1) designed to house a fully onchain open financial system. To accomplish this, Hyperliquid splits state execution into two broad components:

• HyperCore: HyperCore includes fully onchain perpetual futures and spot order books. Every order, cancel, trade, and liquidation happens transparently with one-block finality inherited from HyperBFT. HyperCore currently supports 200k orders / second, with throughput constantly improving as the node software is further optimized.

• HyperEVM: The HyperEVM brings the familiar general-purpose smart contract platform pioneered by Ethereum to the Hyperliquid blockchain. With the HyperEVM, the performant liquidity and financial primitives of HyperCore are available as permissionless building blocks for all users and builders.

Bounce utilizes both components to enable leveraged tokens for the entire Hyperliquid stack. Through Bounce, all markets available on HyperCore can be represented by composable ERC-20 tokens.

Precompiles

Precompiles are special built-in contracts that are not written in Solidity but implemented natively. Hyperliquid uses read precompiles and write precompiles to let HyperEVM contracts interact with HyperCore state and execute Core Actions. Bounce utilizes precompiles to manage state between HyperCore and HyperEVM

Leveraged tokens

Bounce creates leveraged tokens by consolidating them based on asset, direction, and leverage (e.g., 10x long ETH) and backing them with a corresponding single perpetual futures contract on Hyperliquid. This position is continuously adjusted to account for price movements that trigger a rebalancing event or user interaction such as minting and redeeming.

Integrating the Hyperliquid stack allows Bounce users to gain leveraged exposure to the underlying asset without holding the actual asset. A user's margin is denominated in USDC and the counterparty to all leveraged tokens minted on Bounce are direct Hyperliquid market makers (such as the HLP vault).