Author: Jeff Yan
Translation: Wu Says Blockchain
This episode features a transcript of the When Shift Happens podcast interview with Hyperliquid founder and CEO Jeff Yan. Jeff reviews the wealth effects and responsibility shifts brought by TGE (Token Generation Event), explains Hyperliquid’s core philosophy of “no internal order book, no discretionary power,” and discusses why the protocol insists on automatic buyback and burn of fees rather than manual timing operations.
He emphasizes that Hyperliquid is not a “crypto company,” but a “financial protocol” that upgrades financial infrastructure with cryptography, aiming to “house all of finance”— enabling all financial activities to be completed within a composable, permissionless, transparent on-chain system. Additionally, Jeff details how key modules like HyperEVM, HIP-3 (Permissionless Perps), Outcome Markets, the USDH stablecoin alliance, Kinetiq staking, and Hyperlend lending work together to build a decentralized, scalable, composable on-chain financial system.
In response to external skepticism, he stresses that Hyperliquid is not operated as a company with “timing-based buybacks” or “human intervention,” but all mechanisms are encoded in on-chain logic. He also points out that true competition isn’t short-term data, but whether a trustless, globally accessible financial system can be established.
The entire conversation presents a core proposition: in an era of accelerating AI development, if the financial system does not upgrade to an on-chain, programmable, open architecture, there will be no place for humans in the future financial world.
On Wealth Effects and Long-termism
On Singapore’s Startup Environment
Kevin: What do you think of Singapore?
Jeff: It’s very good. Truly a place well-suited for building and projects. Very safe, modern, with smooth infrastructure. Many say it’s “boring,” which they see as a downside, but I see it as a major advantage. Here, you can focus on building without many distractions. It’s a place ideal for deep work.
Did You Expect Such a Wealth Effect?
Kevin: Did you anticipate such a large wealth effect at the time?
Jeff: Not really. Honestly, I rarely set specific expectations for outcomes at certain points. We focus more on doing things well. We know our direction and what we’re building, but I don’t write down goals like “if we hit a certain metric in a month, that’s great.” That’s not my style.
As contributors, many things are outside our control. We need to focus on doing what we should well. The results depend largely on our efforts, but external factors also influence outcomes.
However, I was surprised by the overwhelming positive feedback later. Hearing people say, “This is rare in crypto,” “This is what should have happened, but few real examples exist,” feels great. Others say Hyperliquid shows a positive path the industry can take.
That gave me great satisfaction because I truly believe in this model and in free markets. Many external examples are used to argue “this model doesn’t work.” But when you become a case that can counter such doubts, it’s a very good feeling.
Talent Mismatch in Crypto and Doing the Right Thing to Change Industry Image
Kevin: Clearly, what you’ve achieved is very difficult. But do you think there are enough people in crypto trying to do the right thing in the right way?
Jeff: I believe there’s a general mismatch between what can be built in crypto and those attempting to build it.
This largely stems from crypto’s long-standing negative reputation. Compare it to fields like AI, or traditional finance and tech projects before AI. If someone is talented, from a good school, or has potential to create something valuable— today, many such people wouldn’t seriously consider entering crypto.
Because the industry is filled with negative cases, it creates stereotypes: it seems only full of people rushing to make quick money without caring about product quality.
But I think this view is completely wrong. That’s not the industry’s true potential.
Kevin: How can we change this?
Jeff: The best we can do is keep building— focusing on creating what we truly believe in.
When I say “we,” I mean the entire ecosystem, not just one team. For example, Hyperliquid ecosystem has never cared much about “market meta” or external opinions— like what’s hot now or what’s trending. We more often act as a community, doing what we genuinely believe.
I think this might be the best we can do— providing real results as feedback and demonstration.
Of course, as a permissionless network, there will be bad actors. Some will try to exploit the community or mechanisms for short-term arbitrage or value extraction. That’s unfortunate.
But overall, I believe our community’s direction is very correct. There’s a good cultural atmosphere here. If we continue building this way, I hope the outside world will notice, and more long-term builders will join DeFi.
Responsibility Behind Massive Wealth
Kevin: I think many are paying attention to you now. As a founder, when you almost overnight created billions in wealth, what do you feel is the responsibility that comes with it?
Jeff: I’m not sure if specific events like genesis or TGE truly change the responsibility itself. I think, whenever you’re building any financial product, there’s inherently a huge responsibility.
If you choose to build financial infrastructure, you must do your best. Still, you’ll feel there’s so much to do because finance is a critical part of life. When someone uses financial products, their trust in you is much higher than with regular consumer products.
So I don’t have a grand answer. All we can do is execute to the best of our ability, striving for near perfection.
This might mean slowing down; or choosing to build systems in more complex, difficult ways. Many examples exist. We must always design around core principles: neutrality, fairness, robustness across market conditions.
These principles don’t change because of TGE. Even before that, users trusted Hyperliquid— trusted it as an on-chain, fully verifiable, transparent alternative to their tired, opaque systems. That trust is what we truly need to uphold.
From “Inner Circle Faith” to Global Users
Kevin: The last time we recorded was about a month before TGE. I did something I often use to test community authenticity— because in crypto, fake data and bot accounts are well-known issues. So I took a photo with the community and posted it, to see the reaction. The enthusiasm exceeded my expectations. I felt this community was stronger than I thought.
It felt like “inner circle faith,” but also like a hidden code— those who understand, get it. Many insiders still haven’t fully grasped what’s happening. After TGE, many things were done almost perfectly. You went from a tight-knit “faith-based community” inside crypto to a project supported by the entire industry.
So, how do we make Hyperliquid a “code” that attracts outside users? How do we get non-crypto people to join?
Jeff: I think, ultimately, it’s about providing real value. Not just for Hyperliquid, but for all builders.
I don’t think the goal is to create a “fanatic community.” The so-called “faith” or “cult vibe” is really just resonance among people who share a common goal and clear values. This is rare in crypto because long-termism and shared principles are uncommon.
I prefer not to call it “faith.” To me, it’s simply people coming together, doing the right things in the right way, upholding fairness, and building an open financial system. That should be “normal.”
If we want the whole world to join, we must keep proving that we can create value traditional finance can’t. I’m very confident about this.
From a macro perspective, DeFi has always carried this promise. Many past issues stemmed from a gap between ideals and technical implementation. An open financial system benefits the world— that’s almost undisputed. The key is execution and avoiding bad actors, short-term temptations, or personal interests from derailing the vision.
I believe there are only two core points: first, execution; second, doing things the right way. If these are achieved, DeFi is essentially a major technological upgrade to the existing financial system. When this becomes clear enough, people will naturally join.
Will you celebrate milestones?
Kevin: Did you celebrate when you hit milestones? Or just kept going as usual? I ask because I remember a story— I think it was from Paradigm’s Matt Huang— about a Web2 company’s IPO. They prepared champagne, but the team just had a glass of water and went back to work late into the night, with almost no celebration.
So I’m curious— what happened at Hyperliquid Labs? You said it was just a milestone, and there’s more to do. Will there be some form of celebration? Or is it “part of the plan,” and then focus on the next goal?
Jeff: I thought about it… seems there’s really no formal celebration. Looking back, I feel a bit regretful. There are many moments worth celebrating. But at the moment, there’s always more to do. You can never find a “perfect time” to stop and celebrate.
Maybe many years later, when the entire system is fully autonomous, mature, and truly a stable financial infrastructure, then perhaps it’s time to celebrate.
Of course, everyone might have their own way. But at least as a team, Hyperliquid Labs doesn’t have a “launch a feature, pop champagne” culture. That’s not our style.
I think it’s more a cultural thing— we’re naturally more focused on what to build next, rather than stopping to celebrate what’s done.
On Team Selection, Work Intensity, and Privacy Boundaries
How to Select “High-Integrity” Members
Kevin: How do you test if someone has “high integrity”?
Jeff: That’s a very good question. Honestly, there’s no perfect method.
In Hyperliquid Labs’ hiring process, we do a lot of technical assessments, but beyond that, we always arrange at least a full day of real collaboration. Not a high-pressure, simulated interview, but actual working together.
When you work with someone for a long time, discuss problems, write code, face real challenges— you gradually sense what kind of person they are. There are many “soft signals”— hard to quantify, but perceptible. You can never be 100% sure about someone’s character, but sometimes signals tell you “this risk isn’t worth taking.”
Also, we ensure everyone in the team genuinely feels comfortable with new members. There have been cases where support for a candidate was strong, but others had reservations. Usually, in such cases, we choose not to hire.
Kevin: So it’s like a consensus mechanism? Everyone votes?
Jeff: Not exactly formal voting. No structured voting process. But basically, if anyone has moderate to strong objections, that’s usually enough to veto the hire.
Work Intensity and Sleep
Kevin: How many hours do you sleep? How about team members? Do you “allow” them to sleep as much as they want?
Jeff: It varies by individual. We don’t pressure on “hours worked,” because that’s often the start of disaster.
If someone needs sleep but doesn’t get enough, their output quality drops. Our standards are very high— even when energetic, writing excellent code requires full effort.
So we trust people highly in this regard. I also don’t agree with “all-nighters” or glorifying staying up late. I might work longer hours than many who promote that culture, but I don’t think it should be a strict requirement.
Some team members work late into the night; others have their peak productivity periods. As long as they can consistently produce A+ results, we don’t care about hours.
For us, what matters is “quality of output,” not “duration of work.”
Employee Token Unlocks and Privacy Boundaries
Kevin: One last question about the team. I promise it’s the last. There’s been a lot of FUD in recent months, and one concern from community members and token holders is about token unlock schedules. Many worry that about $300 million worth of tokens are released into the market each month, and this will continue for a long time. What’s the real situation?
Jeff: We don’t publicly discuss these specifics. Because I truly believe financial privacy is a fundamental right. That’s also one reason we entered crypto and DeFi.
Just as you wouldn’t ask a community member to disclose every token operation they do, I think there’s a clear boundary— personal privacy.
I believe protocol operations should be fully transparent. Every dollar flow should be traceable; assets in the system should truly belong to their holders; protocol rules must be public and verifiable. This level of transparency is essential for an open financial system. Without it, issues like those seen in centralized exchanges can occur.
But on the other hand, how contributors handle their own tokens— that’s their personal assets. That shouldn’t be public scrutiny, nor is it my role to judge or disclose.
Protocols must be transparent, but individuals should have privacy. These are not mutually exclusive.
On Handling FUD, Automatic Burn Mechanisms, and Human Discretion
Handling FUD and External Attacks
Kevin: Your approach to FUD and external skepticism is interesting. Many think Hyperliquid just ignores or stays silent.
Jeff: Not quite. Early on, we preferred not to respond. But I realized my PR instincts weren’t always right. Now, I prefer to delegate this to more professional teams.
We’ve also deliberately adjusted our approach— when FUD appears, my instinct is often: “This is obviously wrong; the truth will surface eventually.” But I’ve come to realize that’s not always the best attitude.
From a pragmatic perspective, if false information spreads and needs clarification, we do respond. We explain and correct specific issues rather than ignoring everything.
Of course, we don’t respond to every voice. The key is judgment: does this misinformation mislead users, damage community trust, or hinder proper understanding of the protocol? If yes, we address it directly.
So rather than “ignoring FUD,” we’re learning to respond more maturely and strategically.
Kevin: Do these FUDs affect you personally? Honestly.
Jeff: Depends on the type.
In the past six months, crypto markets have been volatile, mostly downward. Some events caused real damage. Since Hyperliquid is one of the few truly transparent trading venues, much discussion naturally focused on us.
During that time, I was very concerned. I almost acted with a “mission-driven” mindset, trying to clarify technical details. Because these issues are very personal— many people probably lost a lot of money. Emotions are highly sensitive.
But I also saw some competitors deliberately “misrepresenting” Hyperliquid from different angles. They downplayed our strengths, used negative narratives to shift attention away from their own problems.
That makes me angry— it’s obvious they know what they’re doing.
But on the other hand, this anger eventually turns into motivation— pushing me to explain more clearly why Hyperliquid is designed this way, why transparency matters so much.
For example, some centralized exchanges cite data from certain analysis sites, claiming “Hyperliquid’s liquidation count is higher than ours.” But if you look at those platforms’ documentation (which few do), you’ll see they only report “the first liquidation per second,” not the full picture. No explanation why only that part is counted.
In Hyperliquid, every order, cancel, liquidation is on-chain and publicly accessible. When you compare “partial data” with “full data,” misleading conclusions can be drawn.
This is essentially information asymmetry— even outright misdirection.
It’s even more frustrating when influential voices amplify such narratives, making the impact grow rapidly.
Our voice may be smaller, with narrower coverage. But precisely because of that, we need to speak loudly, clearly, and repeatedly to clarify facts.
I won’t pretend these things don’t affect me. They do. But they bring more responsibility than retreat.
Automatic Buyback & Burn vs Human Discretion
Kevin: Many supporters in the ecosystem, but also some industry insiders, criticize Hyperliquid. A common view is: you buy back tokens daily, but when prices are high, you should stop; when prices are low, buy more. What do you think is the core issue with this view?
Jeff: The core issue is— we are not a “discretionary buyback program.”
Many see it as a corporate action, but that’s a mistake. Hyperliquid is a rules-based protocol, not a company making subjective decisions.
For analogy: on Ethereum, the priority fee (tip) is burned automatically. No one asks Ethereum developers: “When ETH price is high, should Vitalik divert these fees to other investments instead of burning?”
Because that’s not a subjective decision— it’s part of the protocol rules.
Hyperliquid works the same way. Fees are converted into HYPE tokens and burned according to preset rules. It’s not the team deciding “how much to buy today or when to stop.” The conversion logic is embedded in on-chain execution.
I think the misunderstanding arises because many centralized or semi-centralized exchanges do buybacks. In those models, the company can decide when and how much to buy, and whether to pause. For such structures, timing-based buybacks are reasonable.
But in Hyperliquid, fee conversion to HYPE and burn is an automated on-chain process.
It’s like a TWAP order— when you submit a TWAP, no one manually decides when to split or send the next order; it’s protocol execution.
Similarly, how fees are converted and burned is fully on-chain logic, not human intervention.
The core issue is— many people mistake an “automatic protocol burn” for a “timing-based buyback strategy.” These are fundamentally different in design philosophy and governance.
Why Removing Human Discretion Is Critical
Kevin: Why is “no discretionary power” so important for Hyperliquid?
Jeff: Because Hyperliquid is not a company. That’s another common misconception.
When I say “we,” or refer to Hyperliquid Labs, we’re just a very small team. Our role is to build a small but critical part of the entire Hyperliquid ecosystem. We are not “Hyperliquid itself.”
Many people are used to traditional finance analogies. Because they dislike learning new concepts, they prefer to fit new ideas into existing frameworks. That can find some similarities, but also many inapplicable points.
Hyperliquid is not a direct mapping of an existing financial entity. It’s not a company, not an exchange, not a “value-creating organization for shareholders.”
Our vision is to have the financial system itself run on-chain.
Yes, the protocol creates value and redistributes it to native tokens. But that’s a different logic from a company’s profit-sharing.
A company is a centralized entity with management, a board, subjective decisions. Hyperliquid is a neutral platform— a foundational infrastructure for finance.
Think of it like the internet for information. The internet isn’t a company, nor designed to generate profits for “internet shareholders.” It’s a neutral, open protocol enabling free flow of information.
Similarly, Hyperliquid aims to be a foundational layer for finance.
Once you give a core team “discretion,” like deciding when to buy back or pause, you’re essentially reverting to a “company model.”
We choose rules-based, automated, unchangeable mechanisms to ensure the system remains neutral and trustworthy, not dependent on subjective judgment.
If the goal is to build a truly on-chain financial system, removing human discretion isn’t optional—it’s a prerequisite.
On HyperEVM, Permissionless Perps, and On-Chain Finance
The Essence and Significance of HyperEVM
Kevin: Last time you visited, we discussed your goal to become “liquidity AWS.” Let’s now talk about what’s happened recently. Starting with HyperEVM— what is it? Explain simply, no industry jargon.**
Jeff: Simply put, HyperEVM is—— enabling developers to migrate their smart contracts from Ethereum directly onto Hyperliquid with minimal changes.
Think of it as a “blank canvas.” Developers can deploy contracts, run logic on it, just like on Ethereum.
On the surface, it feels very similar to Ethereum’s user experience. The innovations accumulated over years— development tools, standards, application patterns— can be reused on Hyperliquid.
Kevin: Share your honest view of HyperEVM’s current performance.
Jeff: That’s a nuanced question.
First, I think there’s a misconception that HyperEVM “has failed.” I can cite many successful examples.
But more importantly, HyperEVM isn’t just “migrating Ethereum stuff.” Its real uniqueness is enabling smart contracts to directly call Hyperliquid’s native on-chain capabilities. That’s crucial.
This narrative isn’t fully understood yet. HyperEVM isn’t just another EVM chain. It’s more like an “entry point”— a gateway to connect directly with Hyperliquid’s native liquidity and infrastructure.
So, when evaluating HyperEVM, it shouldn’t be compared simply as an independent EVM chain. It’s a portal to Hyperliquid’s core capabilities. From this perspective, its significance is entirely different.
Why HyperEVM Is Underestimated
Kevin: In simple terms, maybe people just haven’t fully understood HyperEVM?
Jeff: I think some understand, but the understanding hasn’t fully entered the mainstream narrative. For example, a long-standing criticism was: “Why hasn’t Circle deeply integrated yet?”
The issue is that HyperCore itself is a fully native set of primitives— like account balances, ledgers, etc. This architecture differs from traditional general-purpose blockchains. For companies with mature infrastructure and integrations on general chains, directly connecting to HyperCore is very difficult. That’s where HyperEVM’s value lies— it provides a bridge.
For example, native USDC minting and burning logic can be supported via Circle’s Hub-and-Spoke network: burning on one chain, minting on another. HyperEVM is one of the supported chains.
But understanding this requires grasping the architecture’s purpose. It’s not just “launch an EVM environment,” but enabling external infrastructure to connect seamlessly and interact deeply with HyperCore’s native capabilities.
When these integrations are well-done, they’re “invisible”— the user experience is smooth, and you don’t realize behind the scenes is HyperCore and HyperEVM’s special interaction. That’s why successful stories are hard to surface.
Many ask: “Why haven’t I heard of HyperEVM success stories?” On one hand, many big applications are still building. On the other, those that succeed are so native and seamless that they seem “just natural.” When a fundamental infrastructure is truly successful, it appears as an obvious part of the system. That’s also a reason it’s underestimated.
HIP-3: Permissionless Perps— Significance and Challenges
Kevin: Another product launched last year— though initially hard to understand— is HIP-3 (Permissionless Perps). Now, with the HYPE implementation, we see concrete results. What does it mean? Can you explain simply?**
Jeff: Simply put, Perps (perpetual contracts) are one of the most important innovations in crypto. While the concept has theoretical roots in academia, the real success— proving it as an efficient price discovery tool— was by BitMEX. It concentrates liquidity into a perpetual contract, improving market efficiency.
HIP-3’s core idea is straightforward: in crypto, there’s no “unique” restriction on perpetuals. If an asset has sufficient liquidity and existing futures or options markets, it should also have a perpetual contract. We’re not claiming perpetuals are always better, but users should have the choice.
I believe that if traditional finance widely adopts perpetuals across more assets, a significant portion of trading volume will shift to Perps— because they’re the most direct, efficient way to express views, especially with leverage and two-way trading.
In short, HIP-3 allows anyone to deploy perpetual contracts on Hyperliquid— “Permissionless Perps.”
Behind this, there’s complex work. Because no one has built a fully permissionless perpetual deployment system before. Key issues include:
- Can protocol-critical functions like real-time oracles be managed in a permissionless way?
- Perpetuals are tightly coupled with margin systems; making them permissionless introduces risks and edge cases that must be carefully designed.
- How to maintain system robustness and security in an open deployment environment? These aren’t simple tweaks; they’re deeply intertwined. Also, builders need to understand this new mechanism and be willing to develop on it, which takes time.
Before HIP-3, many doubted its success. We’re not 100% sure it will succeed, but logically, it’s feasible.
When a vibrant developer community and engaged users gather around, such innovation should succeed— and Hyperliquid provides the right environment.
Fundamental Difference Between Hyperliquid and Centralized Perpetual Platforms
Kevin: Can you explain how what you’re doing differs from others?**
Jeff: I can’t fully evaluate “everyone else,” but many attempts outside crypto to do perpetuals follow a pattern: a platform already running crypto perpetuals then adds other assets’ data feeds, offering perpetuals for those assets.
This pattern appears in many centralized exchanges and some DEXs. The core idea: the same platform, same architecture, same team, listing more assets’ perpetuals.
Kevin: How does your approach differ, and why should users care?**
Jeff: For end users, they might not care about the implementation details. But if we truly want to bring the entire financial system on-chain, we need domain experts to deploy and build these products.
In traditional finance, each country has its exchanges; within countries, different asset classes, with different rules and interfaces. The financial industry is highly specialized.
Some complexity comes from inefficiencies in traditional finance. Crypto eliminates some middlemen, but finance is still huge and can’t be built by a single team.
Many large financial firms might choose a different path: maintain a centralized “super-platform,” integrating all assets and services— through acquisitions, partnerships, or internal development. This top-down approach advances faster, with less fragmentation, and better initial user experience. But it’s fragile— risk concentrates in a single entity. When problems occur, they often do so because of over-centralization.
I believe users will prefer systems that truly give them financial sovereignty— accessible globally, with sufficient liquidity, and capable of all needed functions.
Building such a system requires decentralization across multiple dimensions. Ownership decentralization is key, and that’s a core principle Hyperliquid emphasizes. But equally important is that “who builds the core user-facing products” should also be decentralized.
That’s the fundamental difference: instead of a centralized team deploying all assets’ perpetuals, we build an open system allowing different builders— experts in their fields— to deploy markets on the same underlying protocol.
Why Bring All Finance On-Chain
Kevin: Summarize in one sentence: why is it so important to move the entire financial system on-chain?**
Jeff: Because if we don’t, the financial system will lag behind technological progress. The world changes too fast; traditional finance can’t keep up or meet user needs in a rapidly evolving environment.
Kevin: Why is Hyperliquid’s approach better?**
Jeff: It’s not just Hyperliquid’s way. Hyperliquid embodies the core values of DeFi. We’re a community trying to implement these ideas in a way that can truly succeed and be widely adopted.
These values include: finance shouldn’t be controlled by corporations but should be a neutral foundational layer— like the internet.
You mentioned AWS— an interesting analogy. Although AWS is controlled by a company, it functions as a neutral infrastructure. No one questions “why choose AWS? It’s a biased choice.” It’s a default infrastructure.
Finance should have this property— a neutral, globally accessible infrastructure. People shouldn’t be blocked by nationality, identity, or gatekeeping to access finance.
Moreover, finance should be deeply programmable— built from the ground up with programmable primitives, not just adding “programmable features” on top of non-programmable legacy systems. The core components should be code, smart contracts, directly interacting with users, bots, and programs.
To keep pace with tech, finance must become a neutral, programmable, open global infrastructure. That’s why we believe all finance must be on-chain.
Hyperliquid Data and Silver Trade Case
Kevin: If this approach is better, data should reflect that. Can you share some key data points demonstrating Hyperliquid’s proper operation of perpetual markets?**
Jeff: I want to emphasize we’re still very early. The future is uncertain; short-term data alone doesn’t guarantee long-term success.
But, current data already shows the power of permissionless protocols— when builders are free to innovate and execute their visions, results are measurable.
A notable example is the silver market. Recently, metals including silver experienced extreme volatility, with multi-day “10 sigma” events. Both institutions and retail traders paid close attention.
On Hyperliquid, markets launched via HIP-3 (mainly by the first deployer XYZ) now account for about 2% of global silver trading volume.
2% may seem small, but in the context of the global silver market, that’s quite significant. More importantly, these HIP-3 markets have only been live for a few months. For a nascent on-chain perpetual market, this growth is impressive.
And this isn’t driven by the core team “trading.” Their role is to build primitives— HIP-3 itself requires engineering effort. How liquidity is used depends entirely on developers choosing to build on it.
This is a testament to builder quality: they choose Hyperliquid because it allows them to realize their market ideas.
Kevin: You said the data is interesting but still early, so the future might go differently. Why say that?**
Jeff: Because if you only see some evidence supporting a principle and think it’s “unshakable,” that’s dangerous. The world changes too fast.
Some principles are relatively stable— like open access to finance, finance as an open system like information, and user sovereignty. These won’t change easily. But if specific implementations become too rigid, they become fragile.
When designing core primitives, a key approach is: when feedback from builders and users converges on “we want to do X but can’t,” and this feedback overlaps, that intersection often indicates a fundamental capability worth embedding in the protocol.
Protocols should be conservative and selective— deciding what must be native primitives and what can be left to EVM or application layers. This makes the system more elegant and resilient.
This way, the protocol doesn’t embed specific business models or market judgments but leaves “value-laden decisions” to builders. They can adapt quickly to market changes, while the core remains neutral.
All HIP proposals, including HIP-3, are based on this reasoning.
Spot Trading Becomes Price Discovery Hub
Kevin: We previously discussed spot trading, which isn’t developed by the core team but by a team called Unit, building in 2025. What does this tell us?**
Jeff: In 2025, several key projects launched, and during those early stages, Hyperliquid became the main source of spot prices for new assets. This is the first time I know of a decentralized platform becoming the dominant spot price discovery hub for a new asset.
For example, XPL. During critical phases, Hyperliquid’s on-chain spot depth and volume led the market.
In a sense, spot trading is closest to Satoshi’s original “peer-to-peer electronic cash” vision— on-chain asset transfer:
one party transfers quote assets to another; the other transfers base assets back. Order books, local matching— just tools to coordinate on-chain asset transfers.
If you ask Satoshi how Bitcoin should be traded, I believe he’d say it should be fully on-chain. Bitcoin itself may not support complex matching logic, but the trading process should be peer-to-peer.
On Hyperliquid, we do many things, but the core DNA is “native on-chain execution.” When all pieces— performance, order book, UX, liquidity— come together, users prefer a method consistent with crypto’s technical logic.
Most crypto spot traders believe in the vision of crypto and DeFi. After years, being able to trade your assets fully on-chain without sacrificing UX feels like completing a loop.
From technical concept to implementation, back to the original peer-to-peer idea— it’s a “full circle.” I think that’s very cool.
On Early Entrepreneurship, Nonlinear Primitives, and On-Chain Finance
Jeff’s Early Prediction Market Failures
Kevin: You’ve posted videos about how, in 2018, “young Jeff” ran a prediction market project similar to Kalshi. Why didn’t it succeed back then?**
Jeff: Many reasons. The simplest and most honest answer is— we weren’t ready.
The idea itself was cool. From an infrastructure perspective, some directions were correct— like off-chain matching and on-chain settlement. Given the tech at the time, that was a reasonable architecture.
But making a product successful involves much more than “having the right idea.” The idea is a small part. Execution, product refinement, market timing, user education, liquidity bootstrapping, psychological resilience— all are equally important.
Back then, I didn’t see many people genuinely wanting to use on-chain products. The project started during a bullish market, prices rising, everyone excited. But in late 2018, the market turned sharply downward.
We’ve seen this cycle many times in crypto— bull markets attract users, bear markets see almost none.
If that was your first cycle, and you tried to communicate with users who mostly refused to try your product, it’s a heavy blow— especially after investing so much time and effort.
But even so, that experience taught us a lot. We learned what it takes to build a successful financial product— long-term commitment and mindset.
In a way, that idea never disappeared. Some teams that started around the same time persisted, like Kalshi. They clearly had the resilience and conditions to succeed, and now they’re seeing results from years of effort and broader mainstream adoption.
Seeing these companies succeed makes me genuinely happy. It shows many ideas aren’t wrong— it’s about whether you’re prepared, and whether you persist at the right time and in the right way.
Outcome Markets: Nonlinear Expression Tools
Kevin: After eight years, you’re back to prediction markets. But now, more precisely, Outcome Markets. What’s the difference?**
Jeff: It goes back to our “primitives” design philosophy. On Hyperliquid, we want protocol primitives to be as small and self-consistent as possible— simple, performant, but broadly useful.
Outcome Markets aim to be the core tool for expressing “nonlinear views” on-chain.
Let’s compare: spot is the most basic asset form. You hold assets, transfer on-chain. This is fundamental; no dispute. Perpetuals are more controversial but increasingly recognized for their value in price discovery and capital efficiency— HIP-3 is a stage of this idea.
Despite mechanism differences— perpetuals can leverage more, offer higher capital efficiency; spot tokens represent real assets.
They are similar in one key aspect: both express “linear views.” Whether 1x or 100x leverage, the profit/loss scales proportionally with price change. For many users, that’s enough. But some want “nonlinear outcomes.”
Examples: a contract that only pays $1 or $0 depending on an event; long Bitcoin but with downside protection if price drops below a level; a bounded return structure. These are nonlinear views. Combining spot and perpetuals can’t precisely express them. That’s where Outcome Markets come in.
Outcome Markets are “fully collateralized contracts.” Both parties deposit collateral upfront, and based on the result, assets are redistributed. The settlement can be binary or continuous, with no liquidation risk. Users stake capital, wait for settlement, and there are no margin calls or funding rates.
Kevin: Are options and prediction markets similar?**
Jeff: Yes, they’re the most direct examples— nonlinear payoff structures.
There are also interesting applications: can markets aggregate opinions rather than just trade prices? Can they surface important issues? Can subjective outcomes form a capital-driven consensus? All fit within the Outcome Markets framework.
Perpetuals remain key price discovery tools, but they’re complex primitives. Outcome Markets provide a more basic, universal nonlinear expression.
In short: spot solves “owning assets,” perpetuals handle “linear views + leverage,” Outcome Markets enable “nonlinear view expression.” Together, they form a more complete on-chain financial expression system.
The True Meaning of “Housing All of Finance”
Kevin: You often mention “housing all of finance.” What does that really mean?**
Jeff: It means the financial system shouldn’t be fragmented. That’s what “all” signifies. You shouldn’t need separate bank accounts, transfer funds between accounts, or open new accounts for different products. Ideally, your entire financial life should be manageable in one place. I see “composability”— integrating all your financial activities into a unified system— as a huge breakthrough.
But this isn’t unique to crypto. In crypto, “housing all of finance” also emphasizes: the platform itself shouldn’t be controlled by a centralized entity. It should allow many teams to build. When someone creates a new app or protocol, it should automatically connect and interoperate with others. This network effect truly forms a financial system.
There’s a tension: on one side, fragmented but highly composable systems; on the other, more efficient but centrally operated systems. Both have pros and cons.
If designed well, a balance can be struck— maintaining composability while improving efficiency. That’s a major driver of our product and system design.
Hyperliquid Is Not a Crypto Company, But a Financial Protocol
Kevin: You previously said Hyperliquid isn’t a crypto company, but a financial company using cryptography as infrastructure. Of course, “company” might not be the right word. Can you elaborate?**
Jeff: It’s a matter of distinction. We truly believe in DeFi values. From that perspective, crypto and DeFi are in our DNA.
But we don’t see ourselves as “building the best crypto exchange.” That’s not our vision.
In my view, finance is fundamentally finance. The significance of crypto is its potential to upgrade the underlying rails— the core infrastructure— enabling more open, efficient, transparent financial activity. That’s what we’re building.
If Hyperliquid succeeds, some might say: “This proves crypto is right, crypto is validated.” That’s a reasonable interpretation.
Others might say: “It’s a new thing, borrowing ideas from crypto but evolving into an independent system.” That’s also valid.
The key isn’t labels— whether it’s a “crypto company” or not— but whether it advances financial infrastructure.
USDH Stablecoin Alliance
Kevin: Hyperliquid’s core team is only 11 people, but you have a vibrant ecosystem of top developers and builders.
