Composability and DeFi

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

Each xToken represents a tokenized, delta-neutral carry strategy that continuously accrues in price as it earns native yield. But unlike traditional yield products, xTokens remain fully liquid and usable across DeFi, enabling holders to unlock additional layers of utility and capital efficiency.

By putting xTokens to work in DeFi, holders can earn additional yield & utilities on top of the native yield you get by holding the asset, coming from the underlying delta-neutral strategy.

Core DeFi Use Cases

Liquidity Provision

xTokens can be paired with stablecoins or $kHYPE on AMMs such as Project X.

By providing liquidity, holders:

• Earn trading fees on top of the native xToken yield

• Help deepen liquidity for xTokens

• Improve market efficiency and reduce slippage for other users

This allows xTokens to function as yield-bearing liquidity primitives within the Hyperliquid ecosystem.

Provide Liquidity for xHYPE/USDC on Project X here Provide Liquidity for xHYPE/kHYPE on Project X here

Lending & Borrowing

xTokens can be supplied as productive collateral on money market protocols such as HyperLend.

By supplying xTokens, users can:

• Use their xTokens as collateral

• Borrow stablecoins against their xTokens

• Reuse the borrowed capital to mint additional xTokens

This enables users to increase exposure to funding-based returns while maintaining their existing xToken position.

In practice, xTokens continue to accrue their native funding yield, while the same capital is reused across DeFi to improve capital efficiency, without relying on additional lending yield.

Borrow $USDC against your $xHYPE on HyperLend here

Yield Derivatives

xTokens are integrated into yield-derivatives protocols such as Pendle or Spectra.

This unlocks advanced strategies, including:

• Secure fixed rates with Principal Tokens (PTs)

• Speculate on the xToken yield via Yield Tokens (YTs)

• Sophisticated yield management without touching the underlying strategy

These tools allow users to tailor their risk and return profile around Liminal’s funding-based yields.

Trade xHYPE yield on Pendle via PTs and YTs here

In Summary

xTokens transform Hyperliquid’s native yield into productive, liquid & composable DeFi assets

They can be:

• Held passively to earn from its native yield coming from funding rates

• Actively deployed across DeFi for additional returns

• Used as building blocks for advanced capital-efficient strategies

By combining native funding yield with DeFi composability, xTokens unlock new dimensions of utility and efficiency for on-chain capital.