Hyperliquid launches native lending, HYPE sees $269M in first-day borrowing

Hyperliquid launched its native lending feature on September 18, allowing users to use HYPE or BTC as collateral to borrow USDC and USDT. The platform recorded $269 million in borrowing on its first day, a figure confirmed by co-founder Jeff Yan. HYPE reached an all-time high of $92.56 on the same day. The protocol set the loan-to-value (LTV) ratio for HYPE at 65% and BTC at 50%, with a liquidation threshold of 82.5%. Analysts suggest the high borrowing volume is driven by circular leverage, margin replenishment for perpetual futures trading, and arbitrage activities. While the protocol has implemented safety measures like interest reserves and borrowing caps, the use of a native token as collateral introduces potential reflexive risks during market volatility.