In my last alpha feed, I covered the two early DEX contenders on Hyperliquid’s L1, the HyperEVM. While it’s still early, Kittenswap’s ve(3,3) model looks well-aligned with the ecosystem’s ethos: protocols that reward token holders and community members, not just LPs. KITTEN stakers earn a larger share of protocol fees, with planned token buybacks and point incentives across pools denominated in LSTs and CDPs—not just HYPE—offering strong yield opportunities in a market that, at the time, lacked native USDT or USDC.

Outside of Hyperliquid’s top lending and borrowing markets—HyperLend ($300M TVL) and HypurrFi ($170M)—Felix stands out as the leading native CDP protocol on the HyperEVM, with over $150 million in total value locked. It’s a licensed fork of Liquity V2, but brings more to the table than just a clone. Felix is gaining real traction: it’s partnered with Morpho and Ethena, has minted over $40 million worth of feUSD, and has become a go-to venue for farming Hyperliquid points, Felix points, and yield on HyperEVM-native assets. Most recently, Felix announced plans to launch HUSD—a fiat-backed stablecoin designed to keep capital in the ecosystem and redirect the yield that traditional issuers like Circle typically capture back to the community. For a chain that prioritizes aligned incentives, this is a meaningful step.

Felix: Hyperliquid’s Native CDP Protocol

Felix is a licensed fork of Liquity V2—a protocol previously covered in detail by my colleague Jordan, here. But while it inherits the core architecture of Liquity, Felix has been adapted for Hyperliquid and offers two key primitives:

• CDP markets (feUSD)
• Vanilla markets (built on Morpho’s lending stack)

CDP Markets: feUSD

Felix’s CDP system matches borrowers and stability pool (SP) depositors in a dynamic inter