> For the complete documentation index, see [llms.txt](https://docs.bounce.tech/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bounce.tech/basics/how-leveraged-tokens-work/hyperliquid.md). # 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). --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.bounce.tech/basics/how-leveraged-tokens-work/hyperliquid.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.