Author | Wu Shuo Blockchain
Hyperliquid is one of the most successful projects of this cycle, with just an 11-person team, it has captured over 75% of the decentralized perpetual market share. At the time of this article, Hyperliquid's user asset scale reached about $6.2 billion, with the project token HYPE having a market cap near $16 billion and an FDV close to $46 billion, ranking 13th. Hyperliquid is even considered by the community to potentially be the next Binance.
In this episode, Hyperliquid founder Jeff Yan shared his thoughts and journey on building a decentralized trading protocol with Wu Shuo editor Colin. He talked about the importance of self-funding, the reasons for refusing venture capital, and the commitment to user-driven growth. Jeff also elaborated on Hyperliquid's vision for the future of decentralized finance, the logic behind not listing tokens on centralized exchanges, and the promise of maintaining a lean and efficient team. He also shared his views on crypto startups, leadership in the crypto industry, and how Eastern and Western cultural values influence his business thinking.
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Listen on Xiaoyuzhou:
https://www.xiaoyuzhoufm.com/episodes/68a16e5742cc2798e7f33e12
Listen on Youtube:
https://youtu.be/MUhUCbXuh4E
Jeff's background and journey into the crypto space
Colin: Thank you, Jeff, for taking the time to participate. As we know, Hyperliquid is one of the most influential crypto protocols of the past year. My first question is, can you talk about your experiences before creating Hyperliquid, and how those experiences shaped your path into the crypto industry?
Jeff: Of course. I grew up in the United States and graduated from Harvard University in 2017, majoring in Mathematics and Computer Science. Although it wasn't long ago, it feels like a very different era. Back then, everyone studying mathematics wanted to work in mathematics or computer science, but there weren't many options. The startup scene was relatively mature, and large-scale social media was gradually becoming outdated; AI wasn't as popular yet.
So most of us faced a choice: to stay in academia doing research or to switch to quantitative trading. I chose to go to Hudson River Trading, which at the time was one of the major market makers in the U.S. stock market and other markets (which I think still is). The working environment there was great, like a startup, but focused on trading. I got to think deeply about many interesting mathematical problems, understand how the market works, and learn how to apply quantitative thinking to the market.
Around 2018, I learned about Ethereum and thought it was really cool. I basically read the Ethereum white paper, understood a bit, and immediately felt that this would be the future of finance. So, since leaving HRT, I have been in the crypto space. Starting around 2022, we did quantitative trading in the crypto field, looking at both centralized and decentralized trading venues. At that time, FTX collapsed, and we did see its impact.
At that time, we realized that people would start to understand the value of self-custody and be ready to trade cryptocurrencies in a decentralized manner. Meanwhile, we also found that the market lacked an exchange that focused on both decentralized principles and user experience. So, we thought, why not try to build a trading platform that adheres to decentralized principles while providing a quality user experience? This is the DNA that Hyperliquid has had from the very beginning.
Colin: At the beginning, did you ever think Hyperliquid would be as successful as it is today?
Jeff: I definitely didn't expect it to get this big. I have always been visionary; it's easy to do well by working harder than others, maintaining faith, having a long-term vision, and being committed. The important thing is to recognize that things don't happen overnight; you have to be willing to get back up from failures, and I think that's indeed true.
So I feel we've always had this vision. Even now, I feel we still have grander goals. But of course, it would have been foolish to say we knew it would get this big at that time. It's mainly due to the hard work of the team, and the community supporting this important idea at critical moments, and of course, a bit of luck. You can never say such things are inevitable.
Why Hyperliquid chose to self-fund
Colin: Did you initially build Hyperliquid entirely with your own funds? Why choose to refuse venture capital or investments from others? What is the philosophy behind it?
Jeff: Yes, Hyperliquid is entirely self-funded. I don't think I ever did this to make money. In fact, before Hyperliquid, trading made me realize that money is just a number. I don't care much about material wealth; I actually don’t care about money that much. What's important to me is to do something interesting and valuable to the world. So I'm happy to do it, even if I fail, as long as I'm prepared for success.
I really think Hyperliquid is very unique because part of the vision—actually the entire vision—is to redefine how people interact with finance and value, and what it means to them. It is challenging to encourage people to try something very new, which might be unfamiliar.
One point that resonated with many people is that ownership should be community-led. When Hyperliquid launched, the standard practice was to raise large sums of money through venture capitalists and create a lot of excitement—fundraising over and over, feeling like 'oh, we're making progress because last time we raised $1 million, this time $10 million, and then $100 million.' But I always felt that approach was a bit false; it wasn't true progress.
Real progress is when users gain actual value from what you do, rather than a group of investors who put in some money early benefiting from it. So that's our vision, and I think that has truly touched many people. We are fortunate that everyone can support this vision.
Why not list on centralized exchanges?
Colin: Many people noticed that when Hyperliquid launched its token, it was not listed on any centralized exchange. Why did you choose to do that?
Jeff: They could have launched (HYPE) anywhere. Our framework has always focused on building and creating what users want, rather than worrying too much about what others are doing. We just focus, completely focus on what we are doing. We are a very small team, and we don't have a business development (BD) team. We have some people responsible for collaborating with the community and ecosystem, but we don't have a full-time team aimed at institutions like other companies.
So we don't have enough resources to help with the listing matters. We believe that ultimately each platform will decide for itself whether to list or not, and we can accept any outcome. If a platform wants to list our token, that's great, because it means their users will have access to our product. If other platforms don't, that's okay too, because over time they might list it— as long as we do our job and build the technology. It also means that those who really care about Hyperliquid will actively find us.
Assuming there is an enthusiastic user who really cares about Hyperliquid but can't find us, they might try to figure things out on their own. We think that's not a bad outcome. But in reality, the fundamental reason for this is just that we don't have enough capability to do things beyond our core functions.
Advice for crypto startups
Colin: From your perspective, if you were to give some advice to entrepreneurs with capital or resources, would you still advise them not to focus too much on listing tokens or venture capital?
Jeff: Not necessarily. I think if you need funding to do something, venture capital might be a good choice. Venture capital can make many investments; they have a large amount of capital. This way, startups don't have to worry about funding issues in the short term and can focus on building and scaling. So, I think it has its value.
However, I think if you have capital and the ability to do something, and you really believe in it, I personally think it's best to avoid diluting overall ownership—because ownership shares are fixed—rather than diluting it just for short-term benefits. Perhaps, it would be better if the community could hold more shares. In the long run, this is better and fairer. These people are the most important part of the network, right?
The role of market makers in Hyperliquid's development
Colin: Did you collaborate with some market makers in the early stages to build Hyperliquid? Did they offer tokens or airdrops? I heard a rumor that some significant market makers helped Hyperliquid compete with Binance; is that true?
Jeff: Basically, the answer is no. We don't have any private arrangements, such as profit-sharing agreements or investments. Some market makers have indeed reached out to us because that practice was quite common back then.
Many decentralized exchanges raise funds and receive money from market makers. Market makers are also investors; they provide liquidity and help. But we don’t have investors or such arrangements. Our idea has always been that, while this may bring some difficulties in the short term, it is the right thing to do in the long term.
Many centralized exchanges are criticized for their internal liquidity pools or designated market makers (DMMs). I think it's especially important for decentralized exchanges to avoid these practices from the very beginning. The only exception is HLP, but that's an entirely different matter because HLP is owned by the protocol, and any user can deposit into it; it doesn't belong to any single entity.
Hyperliquid's core team and hiring strategy
Colin: How large is the core team of Hyperliquid now? What is the atmosphere like within the team?
Jeff: We now have 11 people, about half of whom are engineers and the other half non-engineers. The team is quite small. The overall atmosphere is good; we've gone through a lot of difficulties together. My collaboration with the team has been very pleasant.
I think there are many things we do well, but also many areas where we can improve. We have been working hard to recruit the best people. So, we don't want to stay this small forever, but we are very selective about our partners. I have always believed, or rather, I learned quickly that hiring the wrong people is far worse than not hiring anyone at all.
Colin: So, will you be hiring more people in the future? What kind of people are you looking to hire?
Jeff: We kind of want everything. It's hard to predict because the future is full of uncertainties, and Hyperliquid itself is still very young, but a lot has changed already. Initially, our focus was completely on becoming a user-friendly, high-performance decentralized perpetual exchange. But now our vision is much larger. Many teams are now building on the platform, and the vision has become more grandiose, with increasing technical complexity.
Therefore, what people need to do during this transition has changed significantly. It's hard to predict what kind of people the team will need. I can only say that we need very smart, proactive, and highly trustworthy individuals, and most importantly, people who can truly be passionate about what we are building.
Ecosystem Projects
Colin: Will your team or foundation invest in ecosystem projects built on Hyperliquid?
Jeff: Well, I don't speak on behalf of the foundation, but so far, the foundation has not invested in any projects. I think it's important to remain neutral. Investments are feasible, but it would require us or the foundation a lot of time to identify all truly valuable projects, ensure they are treated fairly, and decide how to allocate resources. Ultimately, this should be the job of venture capitalists. Venture capital firms are investing in Hyperliquid ecosystem projects, and I think that's great because it allows different people and capital to decide for themselves where the funding goes.
Hyperliquid's development roadmap
Colin: What is the roadmap for Hyperliquid's future?
Jeff: We don't overly focus on specific milestones. We usually have some important items actively progressing; I think these things should be released as soon as possible, even though they will eventually become very complex. The system itself is complex, so we need to be very careful about how we release these features. Besides some long-term vision content we are pushing forward, we don't do much milestone planning. So, we don't make specific predictions like 'we'll do this in a certain quarter.'
The current focus is on the implementation of HIP-3, as well as making spot trading and perpetual contract trading more popular. At the same time, we are also enhancing the system's performance to handle the increasing load.
These matters have kept us very busy. I think knowing what we are doing next isn't particularly helpful. What's more important is to remain flexible and responsive, as this field is changing very quickly, and finance is evolving rapidly too. Being able to quickly understand what is happening and adapt is crucial. If we had a very detailed roadmap, it might make it harder to do the right thing at the right time.
Hyperliquid's role in the future of decentralized finance
Colin: Will Hyperliquid issue stablecoins in the future? Will Hyperliquid enter the tokenized stock market?
Jeff: Hyperliquid is unlikely to do these things because, so far, it has transitioned from being an application-based project to more of a protocol. What people think of as an application is actually just a frontend; anyone can create it, basically interacting with the blockchain through an API. The current focus is on making the blockchain as efficient and scalable as possible and ensuring it has all the necessary functions to support all financial operations. Then, others will build things like stablecoins, tokenization, or any other projects.
I think this approach has many benefits because the things a team can do are limited. We don't want to build a very large, centralized team with many departments and top-down management. This doesn't align with my view of cryptocurrencies, or rather, it doesn't align with the vision that Satoshi Nakamoto or others in the crypto community have for technology. Having a company build everything would lead to a lack of resilience and strength in the technology. Instead, if the core is a decentralized protocol that anyone can interact with, self-operating, and remains objective and neutral, then others can build, collaborate, compete, and combine on top of it. This is a very powerful system, and I believe that's how finance should operate.
Comparison of Hyperliquid's success with large teams
Colin: You just mentioned that Hyperliquid's core team only has 11 people. Companies like Binance or OKX may have three to four thousand people. Why is Hyperliquid so successful while many other decentralized exchanges are struggling? What do you think the reason is?
Jeff: Well, I actually don't know much about other teams, so it's hard to make comparisons.
But I think an important reason is that Hyperliquid is very focused. If you look at centralized exchanges, they are actually operating multiple businesses. It seems like they have a core team, but there might also be a staking team, a marketing team, and even an institutional team. In my view, each of these teams is like a separate company.
Each of those companies might have, well, ten times more people than Hyperliquid. But the key is that they are also trying to do more internal work. I feel this is just a different perspective. If you look at Hyperliquid more broadly, treating it as something anyone can do on the blockchain, then more people are involved. Any team working on Hyperliquid might be larger than the team responsible for the core protocol. So, maybe this comparison would be more appropriate.
Jeff's management style and leadership
Colin: What is your management style like? How do you lead your team in the crypto industry?
Jeff: I'm not quite sure what my management style is; you should probably ask those who work with me. However, I believe I have high expectations of people. Our team is very small, and the workload is significant. So yes, I might push people to do more than they are comfortable with, but that might be the same for every CEO or CTO.
I am quite hands-on. I try not to micromanage—just give people some challenging tasks, and the stronger individuals can handle them well. I like to let them take full responsibility.
But on the other hand, I think it's not really feasible to completely let go. I have always been actively involved in the technical side, almost always keeping up with everything on the technical front. Although it is becoming increasingly difficult, I feel it is very important to maintain this involvement because what Hyperliquid is doing is extremely important.
Everything is interconnected—it is a blockchain, with node software ensuring the security of the entire system. If that part becomes chaotic or if different people work from different perspectives and conflict occurs, it is very dangerous. Accuracy and performance are vital for the system's scalability.
The Importance of Leadership Philosophy and Team Collaboration
Colin: Many young people or startups are now choosing to enter the AI field; do you still think there are many entrepreneurial opportunities in the crypto industry? What advice would you give to these startups?
Jeff: Yes, I think there are many opportunities. If you are very smart, young, and ambitious, AI and crypto are definitely the two most obvious fields. But I do agree with you that some people are not entirely suited for it. AI has indeed taken the spotlight, and there's probably a reason for that. The crypto industry has many things that are not so popular, and there have been many irregularities in the past, and similar phenomena still exist today, so I don’t blame others for being cautious about it.
Nevertheless, I think there are still many things worth building in the crypto space. The key is the perspective. So far, most of the money made in the crypto industry has been 'predatory' rather than 'additive.' A lot of it is scam-like, creating demand for a certain token and then easily selling it off. I find that very unfortunate. It gives certain people a lot of power but also attracts those who want to exploit the system. If you look at it from this angle, there indeed isn't much worth building.
But if you look at it from another angle, finance is outdated, and the infrastructure that supports finance is also outdated. The only sustainable and effective way to upgrade it is to rewrite it from scratch, adopting decentralized ownership and control. Then there are many things to do.
The financial industry itself is very large, and the fintech industry is also huge. They are currently larger and more valuable than the crypto industry. Moreover, I believe crypto can indeed provide the best solutions for these problems. So, I hope to see more practical use cases in the coming years. It seems like a golden opportunity with policy changes and a general optimism in the tech field.
I think this industry has a second chance to make a good impression and build something valuable. Once that happens, it will form a self-reinforcing cycle, inspiring more people to build and create more examples. I think that's what this industry truly needs.
Jeff's cultural background and its influence on Hyperliquid
Colin: The next question may be a bit more personal. If you don't want to answer, that's okay. Were your parents Chinese immigrants? Do you speak Chinese?
Jeff: Right, both of my parents are immigrants from China. So, I consider myself a first-generation American, born and raised in the United States. I am a blend of Eastern and Western cultures.
I feel that many values from the East and West are complementary. Looking back, this might be a key reason for Hyperliquid's success. We combine the strengths of both. I believe that American and Western values are crucial for the success of startups, which is why most of the largest startups are in the United States. I think as long as the world remains in its current state, this will continue to hold true.
These values include believing that a small team can achieve great things, daring to dream big, but also thinking independently, not taking the status quo for granted, and believing that they can change the world. This is a very typical American mindset, which I, as someone who grew up in the United States, resonate with a lot.
I don't care much about politics; I just want to get things done, but I think these entrepreneurial values resonate with me very well. As for the Eastern part, I don’t know much about Chinese history and such. I think a downside for my generation could be that after immigrating to a new country, one might lose some connection with their roots.
So, I feel a bit guilty about this, but I have a certain understanding of these principles. Traditionally, Chinese values emphasize humility, doing more than talking, and a strong work ethic. All of these have influenced my way of working and building. Both Eastern and Western worldviews are very valuable and complementary, and that's how I see myself. Well, I can speak some Chinese, but I have indeed regressed because I don't use it much.
Jeff's gratitude to the Chinese community and thoughts on the crypto market
Colin: My last question is, can you say a few words to the Chinese community or Chinese fans? They have always been very supportive of Hyperliquid. And one more interesting question—do you think we are still in a bull market? What is your prediction for Bitcoin in this cycle?
Jeff: Thank you for your support; I really appreciate it. I haven't been to China for a while, and I feel both close and distant.
It's really great to see them become such a large community and provide support. Ultimately, Hyperliquid shouldn't be bound by any boundaries, whether political, national, or otherwise. I sincerely believe in the free market and capitalism; I think it's the best way to promote prosperity and drive human progress.
Yes, 'prosperity' is the most fitting word. I think Hyperliquid is an extension of that concept. It’s really cool to see people from all over the world supporting it and succeeding by building it, and I hope to continue supporting everyone in this process. As for the bull market, I'm actually not an expert in that area; I have no idea.
I have always focused on automated trading; my focus is on understanding the detailed time frames of the market. My mental model is that it's hard to make confident predictions in the long time frame.
If you think you know, you might be wrong. I believe the smartest people who can make long-term predictions must do so with a lot of uncertainty. For example, if you ask Warren Buffett what Coca-Cola's stock will be like in five years, he wouldn't assertively say it will be great. He might just give some vague answers about the fundamentals.
So, this isn't my area of expertise, but I think it actually doesn't matter that much. If your main focus is buying and selling tokens, then bull and bear markets are indeed very important. But if you focus on building, their impact is much less. In a sense, building when the market is calmer is better because there are fewer distractions. This has always been my approach.
Read more, with two previous articles about Jeff for reference:
https://www.wublock123.com/index.php?m=content&c=index&a=show&catid=47&id=45857
https://www.wublock123.com/index.php?m=content&c=index&a=show&catid=47&id=34811