Hyperliquid has launched manual borrowing on its HyperCore infrastructure, allowing users to put up HYPE and BTC as collateral to borrow USDC and USDT. The new feature uses the same underlying infrastructure as Hyperliquid’s portfolio margin system, while giving users direct control over how much they borrow.
The launch has already attracted significant demand. Hyperliquid said $269 million in assets had been borrowed on the first day. Borrowers pay interest on their loans, while users supplying quote assets earn interest. The rates change based on how much of the available liquidity is being used.
Manual borrows are live on Hyperliquid
Portfolio margin and manual borrows use the same underlying HyperCore infrastructure, with $269M in assets borrowed today.Users can supply HYPE and BTC as collateral to borrow quote assets (USDC and USDT). Borrowed quote assets pay… pic.twitter.com/C3crESxaM0
— Hyperliquid (@HyperliquidX) September 18, 2026
What does manual borrowing change for Hyperliquid users?
For Hyperliquid users, the main change is that they can borrow against their existing collateral without selling it. A trader holding eligible BTC, for example, can use it as collateral to borrow USDC while keeping BTC exposure. The feature also gives standard HyperCore accounts access to the same borrowing infrastructure already used by portfolio margin.
There has been some confusion over whether the collateral is native BTC or UBTC. Hyperliquid’s announcement refers to BTC, while some users have questioned whether the asset shown in certain interfaces is UBTC, the bridged version of Bitcoin used on Hyperliquid. Nick, a Hyperliquid community member, clarified that manual borrowing does not create a separate credit system. It opens the existing HyperCore borrowing system to standard accounts, allowing HYPE and BTC collateral to remain in place while users borrow USDC.
The removal of bridge or wrapper friction could also make borrowing more useful. Ian Lee described native BTC collateral combined with stablecoin liquidity as a simpler setup because users do not have to deal with the additional steps associated with moving or wrapping BTC before using it as collateral.
The trade-off is that borrowing adds liquidation risk. If collateral value falls far enough, the position can be liquidated. That means users now have another way to access liquidity from their HYPE or BTC, but they also have to manage debt, interest costs and collateral levels rather than simply holding the assets.
Aave and MakerDAO show what can go wrong with crypto lending
Hyperliquid is entering a market that has already gone through several major lending cycles. Aave, for example, handled about $109 million in liquidations during the May 2022 market selloff without major insolvencies. But later that year, an attempted CRV position on Aave led to the protocol’s first meaningful insolvency on version 2, after a trader borrowed large amounts of CRV and sold it. At the same time, the token’s price fell sharply. Aave responded by tightening risk parameters, including borrow and supply caps.
MakerDAO provides an even earlier warning. During the March 2020 crash, Ethereum fell more than 30% and network congestion prevented some liquidators from competing properly in auctions. Maker ended up with about $4.5 million of unbacked DAI. Compound also recorded its highest number of liquidations during the same crash.
The lesson for Hyperliquid could be that the difficult part of lending comes during a sharp market move, when collateral prices fall, borrowers rush to protect positions and lenders want their money back at the same time. Hyperliquid’s use of borrow caps, LTV limits, and a liquidation backstop shows these risks are already built into the system.
Meanwhile, Hyperliquid said a future network upgrade will add optional permissioned market functionality, known as HIP-3*, to its HIP-3 system. The feature will allow market deployers and sub-deployers to manage on-chain whitelists that limit who can trade in selected markets.
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