Composability and DeFi

xTokens are not just yield-bearing tokens, their real strength lies in being composable building blocks for DeFi.

By putting them to work in DeFi, holders can unlock additional yield and utility on top of the base funding stream.

• Liquidity Provision: Pair xTokens with a stablecoin on AMMs such as Project X or HyperSwap to earn trading fees while helping deepen liquidity for xTokens. By providing liquidity, LPs make the market more efficient and enable easier entry and exit for other users.

• Lending & Borrowing: Supply xTokens as collateral on Money Markets protocols to borrow stablecoins while your collateral keeps compounding in value.

• Yield Derivatives: Platforms like Pendle let holders lock fixed returns via PTs or leverage funding yields through YTs, enabling advanced strategies around Liminal’s yields.

In short, xTokens transform Hyperliquid’s native funding yield into liquid, composable assets. They can be held passively or actively integrated into DeFi strategies, unlocking new layers of capital efficiency.