Author | Wu Says Blockchain
Hyperliquid is one of the most successful projects of this cycle, with a team of just 11 people, already capturing over 75% of the decentralized perpetual market. At the time of this publication, Hyperliquid's user assets reached about $6.2 billion, with the project token HYPE having a market cap of nearly $16 billion, an FDV of nearly $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 with Wu Says editor Colin the journey and thoughts on building a decentralized trading protocol. He talked about the importance of self-funding, the reasons for rejecting venture capital, and the commitment to a user-driven growth philosophy. Jeff also elaborated on Hyperliquid's vision for the future of decentralized finance, the rationale behind not listing tokens on centralized exchanges, and the commitment to keeping the team lean and efficient. He also shared his views on crypto entrepreneurship, leadership in the crypto industry, and how Eastern and Western cultural values influence his business thinking.
Listen to the full audio and video on Xiaoyuzhou and other mainstream audio platforms at home and abroad. This article does not constitute any investment advice, and the interviewee's views do not represent Wu's opinion; readers should strictly comply with local laws and regulations.
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, could 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 time. 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 The startup scene was relatively mature, and large-scale social media was gradually becoming outdated; AI wasn't as hot as it is now.
So most of us face a choice: stay in academia to do research or switch to quantitative trading. I chose to go to Hudson River Trading, which at the time was one of the large market makers in the U.S. stock market and other markets (and I think still is). The work environment there was great, like a startup, but it was trading work. I was able to think deeply about many interesting mathematical problems, understand how the market works, and learn how to apply quantitative thinking in the market.
Around 2018, I learned about Ethereum and thought it was very cool. I basically read Ethereum's white paper, understood a little bit, and immediately felt that this would be the future of finance. So since leaving HRT, I have basically been in the crypto space. Starting around 2022, we have been doing quantitative trading in crypto, looking at both centralized exchanges and decentralized trading venues. At that time, FTX collapsed, and we indeed saw its impact.
At that time, we realized that people would start to understand the value of self-custody and be prepared to trade cryptocurrencies in a decentralized way. Meanwhile, we also found that there was a lack of an exchange that adhered to decentralization principles while also focusing on user experience. So we thought, why not try to build a trading platform that meets both decentralization principles and provides a high-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; working harder than others, maintaining faith, having a long-term vision, and commitment makes doing well quite easy. It's important to recognize that things won't happen overnight; you have to be willing to get back up from failure, and I think that is indeed true.
So I feel that we have always had this vision. Even now, I feel we still have grander goals. But of course, if we say we knew it would be this big back then, that would certainly be foolish. Mainly due to the hard work of the team, there was also community support at critical moments for this important idea, and of course, some luck. You can never say such things are inevitable.
Why Hyperliquid chose self-funding
Colin: Did you initially build Hyperliquid entirely with your own funds? Why choose to reject venture capital or investments from others? What is the philosophy behind it?
Jeff: Yes, Hyperliquid is entirely self-funded. I think I have never done this to make money. In fact, before Hyperliquid, trading taught me that money is just a number. I don't value material wealth much; I actually don't care much about money. What's important to me is to do something interesting and valuable to the world. So I'm happy to do it, even if it fails, as long as I'm prepared for success.
I do 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 that means for them. It's challenging to push people to try something very new and possibly unfamiliar.
One point that resonates with many is that ownership should be led by the community. When Hyperliquid launched, the standard approach was to raise large amounts of money from venture capitalists and create a lot of excitement — financing over and over again, feeling 'oh, we are making progress because last time we raised $1 million, this time it’s $10 million, then $100 million.' But I always felt that way of doing things was somewhat false; it wasn't true progress.
Real progress is when users derive actual value from what you're doing, rather than a bunch of investors who put in some money early on benefiting from it. So that's our vision, and I think it really resonates with many people. We're fortunate that everyone can support this vision.
Why not list on a centralized exchange?
Colin: Many people noticed that when Hyperliquid released its token, it was not listed on any centralized exchanges. 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, entirely focus on what we are doing. We are a very small team and do not 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 targeting institutions like other companies do.
So, we don't have enough resources to help handle the listing matters. We believe that ultimately every platform will choose whether or not to list based on its own decision, and we can accept any outcome. If a platform wants to list our token, that's great because it means their users will be exposed to our product. If other platforms don't, that's okay too, because over time, they might — as long as we do our job and build the technology. It also means that those who truly care about Hyperliquid will actively find us.
Suppose there is an enthusiastic user who really cares about Hyperliquid but can't find us; they might try on their own. We think that's not a bad outcome either. But the fundamental reason for all this is just that we don't have enough capacity 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 funding or resources, would you still advise them not to focus too much on coin listings 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 lot of capital. This way, startups don't have to worry about short-term funding issues and can focus on building and scaling. So I think it has its value.
However, I think if you have the capital and the ability to do something, and you truly believe in it, in my personal opinion, it's best to avoid diluting the 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 have 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 the development of Hyperliquid
Colin: Did you collaborate with some market makers in the early stages to build Hyperliquid? Would they provide 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. There have indeed been some market makers who reached out to us because this practice was common at that time.
Many decentralized exchanges raise funds and receive capital from market makers. Market makers are also investors; they provide liquidity and assistance. But we don't have investors and no such arrangements. Our idea has always been that while this may bring some difficulties in the short term, in the long run, it is the right approach.
Many centralized exchanges have been criticized for their internal capital pools or designated market makers (DMM). I believe it's particularly important for decentralized exchanges to avoid these practices from the start. The only exception is HLP, but that's entirely different because HLP is owned by the protocol, and any user can deposit into it; it does not belong to any single entity.
Hyperliquid's core team and hiring strategy
Colin: How large is Hyperliquid's core team now? What is the atmosphere like within the team?
Jeff: We currently have 11 people, almost half of whom are engineers and the other half are non-engineers. The team is small. The overall atmosphere is quite good; we've gone through a lot of difficulties together. I really enjoy collaborating with the team.
I think there are many areas where we are doing well, but there are also many areas where we can improve. We have been striving to recruit the best people. So, we don't want to remain this small forever, but we are very picky about partners. I have always believed, or rather, I learned quickly that hiring the wrong people is far worse than not hiring anyone.
Colin: So, will you be hiring more people in the future? What kind of people do you hope to recruit?
Jeff: We want a bit of everything. It's hard to predict because the future is full of uncertainties, and Hyperliquid itself is still 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. There are many teams developing on the platform, the vision has become more grandiose, and the technical complexity is increasing.
Therefore, the things people need to do have changed significantly throughout this transition. It's hard to predict what kind of people the team will need. All I can say is we need very smart, proactive, and highly trustworthy people, and most importantly, those 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 for the foundation, but so far, the foundation has not invested in any projects. I think it's important to remain neutral. Investing is feasible, but it would require us or the foundation to spend a lot of time identifying all truly valuable projects, ensuring they are treated fairly, and deciding 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 good because it allows different people and capital to autonomously decide where the funds go.
The development roadmap of Hyperliquid
Colin: What is the roadmap for Hyperliquid in the future?
Jeff: We don't focus too much on specific milestones. We usually have a few important items actively advancing, and I think these things should be released as soon as possible, even though they will ultimately become very complex. The system itself is complex, so we need to be very cautious about how we release these features. Aside from some long-term visions we are promoting, we don't do much milestone planning. So, we don't predict specifics like 'we will do this in a certain quarter.'
The current focus is on the implementation of HIP-3 and making spot trading and perpetual contract trading more popular. At the same time, we are also enhancing the system's performance to cope with the increasing load.
These things have kept us very busy. I don't think knowing what our next step is particularly helps. What's more important is to remain flexible in our responses, as this field changes very rapidly, and finance is also evolving quickly. Being able to quickly understand what's happening and adapt is crucial. If we had a very detailed roadmap, it might actually be harder to do the right thing at the right time.
The role of Hyperliquid in the future of decentralized finance
Colin: Will Hyperliquid issue stablecoins in the future? Will Hyperliquid enter the market for tokenized stocks?
Jeff: Hyperliquid is unlikely to do these things because, so far, Hyperliquid has already transitioned from an initial application-based project to something more like a protocol. What people think of as an application is actually just a front-end that anyone can create, essentially interacting with the blockchain through APIs. The current focus is on making the blockchain as efficient and scalable as possible and ensuring it has all the features needed to support all financial operations. Then, others can build things like stablecoins, tokenization, or any other projects.
I think this approach has many benefits because there are limits to what a team can achieve. We don't want to build a very large, centralized team with many departments and top-down management. This is somewhat inconsistent with my view of cryptocurrencies, or rather, it doesn't align with the vision of Satoshi Nakamoto or other people in the crypto community about technology. Having a company build everything would lead to a lack of resilience and strength in the technology. Conversely, if the core is a decentralized protocol that anyone can interact with, running itself, and remaining objective and neutral, then others can build, collaborate, compete, and combine on top of it. This is a very powerful system, and I think this is how finance should operate.
Comparison of Hyperliquid's success with large teams
Colin: You just mentioned that Hyperliquid's core team consists of only 11 people. Companies like Binance or OKX may have three or four thousand people. Why has Hyperliquid been so successful while many other decentralized exchanges struggle? What do you think is the reason?
Jeff: Well, I actually don't know much about other teams, so it's hard to make comparisons.
But I think one important reason is that Hyperliquid is very focused. If you look at centralized exchanges, they are actually operating multiple businesses. It seems 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 company.
Each of these companies might have, um, ten times more people than Hyperliquid does. But the key is that they are also trying to do more internal work. I think that's just a different perspective. If you look at Hyperliquid more broadly 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 makes more sense.
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 might want to ask those who work with me. However, I believe I have high expectations of people. Our team is very small, and the workload is heavy. 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 still quite hands-on. I try not to micromanage — just give people some challenging tasks that stronger individuals can complete well. I like to let them take full responsibility.
But on the other hand, I think it's not really viable to simply let go completely. I have always been actively involved in the technical side of things, keeping up with everything happening on the technical front almost all the time. Although it has become increasingly difficult, I feel that maintaining this involvement is very important because what Hyperliquid does is crucial.
Everything is interconnected — it is a blockchain, and a node software ensures the security of the entire system. If that part becomes chaotic or different people work from different angles and create conflicts, that is very dangerous. Correctness and performance are crucial for the system's scalability.
The importance of leadership philosophy and teamwork
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 these startups?
Jeff: Yes, I think there are many opportunities. If you're very smart, young, and ambitious, AI and crypto are definitely the two most obvious fields. But I do agree with what you said; some people aren't completely suitable. AI has certainly taken the spotlight, and there's probably a reason for that. The crypto industry has many aspects that aren't so popular; 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 perspective. So far, the money successfully made in the crypto industry has mostly been 'predatory' rather than 'growth-based'. A lot of it involves scam-like activities, like creating a demand for some token and then easily selling it. I find that very regrettable. It gives a lot of power to certain people but also attracts those who want to abuse the system. If you look at it from this angle, there really isn't much worth building.
But if you look at it from another angle, finance has become outdated, the infrastructure supporting finance has also become outdated, and 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 be done.
The financial industry itself is very large, and the fintech industry is also very big. They are currently larger and more valuable than the crypto industry. And I believe that crypto can indeed provide the best solutions to these issues. So I hope that in the coming years, there will be more practical use cases. It seems like a golden opportunity, accompanied by policy changes and a general optimism in the tech sector.
I believe 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 where more people will be inspired 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 might be a bit more personal. If you don't want to answer, that's fine. Are your parents Chinese immigrants? Do you speak Chinese?
Jeff: Right, both of my parents immigrated from China. So I consider myself a first-generation American, born and raised in the U.S. I am a mix of Eastern and Western cultures.
I feel that many values from the East and West are complementary. Looking back, this might be an important reason for Hyperliquid's success. We combine the strengths of both. I believe that the values of America and the West are crucial for the success of startups, which is why most of the largest startups are in the United States. As long as the world remains as it is now, this will continue to hold true.
These values include believing that a small team can also achieve great things, daring to dream big, but also thinking independently, not taking the status quo for granted, and believing that one can change the world. This is a very typical American mindset, which I, as someone who grew up in the U.S., strongly identify with.
I'm not very concerned with politics; I just want to get things done, but I think these entrepreneurial values align very well with me. As for the Eastern part, I don't know much about Chinese history and such. I think one disadvantage for my generation might be that after immigrating to a new country, it can lead to losing some connection with one's 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. These have all influenced how I work and build. Both Eastern and Western worldviews are very valuable and complementary, which is how I see myself. Well, I can speak some Chinese, but I've 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, could you say a few words to the Chinese community or Chinese fans? They have always supported Hyperliquid. And another 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 offer support. After all, Hyperliquid shouldn't be constrained by any boundaries, whether political, national, or otherwise. I genuinely believe in free markets 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 idea. 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 not really an expert in that area; I have no idea.
I have always focused on automated trading, and my focus is on understanding the detailed timeframes of the market. My mental model is that it's very difficult to make confident predictions over long timeframes.
If you think you know, you might be wrong. I believe that the smartest people who can make long-term predictions must carry a great deal of uncertainty when making those predictions. For example, if you ask Warren Buffett what Coca-Cola's stock will be like in five years, he wouldn't confidently say it will be big. He might just give some vague answers about the fundamentals.
So, this isn't my area of expertise, but I think it actually isn't that important. If your main focus is on buying and selling tokens, then bull and bear markets are indeed very important. But if you focus on building, then their impact is not as significant. In a sense, it might even be better to build when the market is calmer 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