Author | Wu Talks Blockchain
Hyperliquid is one of the most successful projects of this cycle, with just an 11-person team already capturing over 75% of the decentralized perpetual market. At the time of this publication, Hyperliquid's user asset scale reached approximately $6.2 billion, with a market cap of nearly $16 billion and 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 with Editor-in-Chief Colin about the journey and thoughts on building decentralized trading protocols. He talked about the importance of self-funding, the reasons for rejecting 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 commitment to maintaining a lean and efficient team. He also shared his views on crypto entrepreneurship, leadership in the crypto industry, and how Eastern and Western cultural values have influenced his business thinking.
Jeff's background and journey into the crypto field
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: Sure. I grew up in the United States and graduated from Harvard University in 2017, majoring in mathematics and computer science. Even though it wasn’t long ago, it feels like a very different era. Back then, everyone who studied mathematics wanted to work in mathematics or computer science, but there weren’t many choices. The startup scene was relatively mature, large-scale social media was gradually becoming outdated, and AI wasn’t as hot yet.
So most of us faced the choice: stay in academia doing research, or switch to quantitative trading. I chose to go to Hudson River Trading, which was one of the largest market makers in the U.S. stock market and other markets at the time (and I think still is). The work environment there was fantastic; it was like a startup, but focused on trading. I got to think deeply about many interesting mathematical problems, understand how markets operate, 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 little, and immediately felt this would be the future of finance. So since leaving HRT, I have basically been in the crypto field. From around 2022, we have been doing quantitative trading in the crypto space, looking at both centralized and decentralized exchanges. At that time, FTX collapsed, and we really saw its impact.
At that time, we realized that people would begin to understand the value of self-custody and be ready to trade cryptocurrencies in a decentralized manner. Meanwhile, we also found that there was a lack of an exchange that both emphasized decentralized principles and focused on user experience. So we thought, why not try to build a trading platform that adheres to decentralized principles while providing a high-quality user experience? That’s the DNA Hyperliquid has had from the very beginning.
Colin: Did you ever think at the beginning that Hyperliquid would be as successful as it is today?
Jeff: I certainly didn’t expect it to be this big. I have always been forward-thinking; working harder than others, maintaining faith, having a long-term vision, and commitment makes it quite easy to do well. It’s important to recognize that things don’t happen overnight, and you have to be willing to get back up from failures, and I think that’s indeed true.
So I feel we have always had this vision. Even now, I feel we still have grander goals. But of course, to say we knew it would be this big back then would definitely be foolish. It was primarily due to the hard work of the team, and the community supported this important idea at critical moments, and of course, some luck. You can never say such things are inevitable.
Why Hyperliquid chose to self-fund
Colin: Did you initially use entirely your own funds to establish Hyperliquid? Why choose to reject venture capital or others' investments? What’s the philosophy behind it?
Jeff: Yes, Hyperliquid is entirely self-funded. I don’t think I have ever done this for profit. 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 much about money. What matters to me is doing something interesting that has value for the world. So I’m happy to do it, even if it fails, as long as I’m prepared for success.
I do believe 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’s very difficult to push people to try something very new and possibly unfamiliar.
One point that has resonated with many people is that ownership should be community-led. When Hyperliquid launched, the standard practice was to raise large amounts of money through venture capitalists and create a lot of excitement — fundraising again and again, thinking 'Oh, we’re making progress because last time we raised $1 million, this time it’s $10 million, and then $100 million.' But I always felt that way of doing things was a bit fake; that wasn’t real progress.
Real progress is when users derive actual value from what you are doing, not when a group of early investors who put in some money can benefit from it. So that’s our vision, and I think it has indeed 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 released its token, it wasn’t listed on any centralized exchange. Why did you choose to do that?
Jeff: They could have launched (HYPE) anywhere. Our framework has always been focused on building and creating what users want, rather than worrying too much about what others do. We just focus, completely on what we are doing. We are a very small team and do not have a business development (BD) team. We have a few people responsible for community and ecosystem collaboration, but we do not have a full-time team focused on institutions like other companies.
So, we don’t have enough resources to help handle the listing matters. We believe that ultimately, each platform will choose whether or not to list based on their own decisions, 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 list, that’s fine 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 come to us.
Suppose there is an enthusiastic user who genuinely cares about Hyperliquid but cannot find us; they might try to explore on their own. We think this is not a bad outcome either. But in reality, the root of it all is simply because 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 entrepreneurs with funding or resources some advice, would you still suggest they not focus too much on listing coins or venture capital?
Jeff: Not necessarily. I think if you need funding to do something, venture capital might be a good option. Venture capital can make a lot of investments, and they have a lot of capital. This way, startups do not have to worry about fund 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 the capital and the ability to do something, and you truly believe in it, personally, I think it’s best to avoid diluting overall ownership — because the share of ownership is fixed — rather than diluting it just for short-term gains. Perhaps, if the community could hold more shares, that would be better. In the long run, that’s 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? Will 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, like profit-sharing agreements or investments. Indeed, some market makers have reached out to us because that practice was quite common at the time.
Many decentralized exchanges raise funds and get funding from market makers. Market makers are also investors; they provide liquidity and help. But we don’t have investors, nor do we have such arrangements. Our idea has always been that while this might bring some difficulties in the short term, in the long run, it is the right thing to do.
Many centralized exchanges have been criticized for their internal funding pools or designated market makers (DMM). I think it is particularly important for decentralized exchanges to avoid these practices from the very beginning. The only exception is HLP, but that’s a completely different matter because HLP is owned by the protocol, and any user can deposit into it; it does not belong to any single entity.
Hyperliquid core team and recruitment strategy
Colin: How big is the core team of Hyperliquid now? What’s the atmosphere like within the team?
Jeff: We now have 11 people, about half of whom are engineers and the other half are non-engineers. The team is very small. The overall atmosphere is quite good; we’ve been through a lot together. My collaboration with the team has been very enjoyable.
I think we have a lot of areas where we are doing well, but there are also many areas where we can improve. We have been working hard 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 person is far worse than not hiring anyone at all.
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 very young, but a lot has changed. Initially, our focus was entirely on becoming a user-friendly, high-performance decentralized perpetual exchange. But now our vision is much larger. Many teams are developing on the platform, the vision has become more ambitious, and the technical complexity is increasing.
Therefore, the tasks that people need to undertake in this transition process have changed significantly. It is difficult to predict what kind of people the team will need. I can only say that we need very smart, proactive, and high-integrity individuals who, most importantly, are truly passionate about the cause 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 hasn’t invested in any projects. I think it’s important to remain neutral. Investment is feasible, but it would require us or the foundation to spend a lot of time identifying all the 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 companies are investing in Hyperliquid ecosystem projects, and I think that’s good because it allows different people and capital to autonomously decide where funds go.
The development roadmap of Hyperliquid
Colin: What is the future roadmap for Hyperliquid?
Jeff: We won’t focus too much on specific milestones. We typically have some important items actively progressing; I think these should be launched as soon as possible, even though they will ultimately become very complex. The system itself is complex, so we need to be very careful in considering how to release these features. Besides some content related to the long-term vision we are advancing, we won’t do too much milestone planning. So, we won’t make specific predictions 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 widespread. At the same time, we are also enhancing the system's performance to handle the increasing load.
These things have kept us very busy. I believe knowing what we are doing next is not particularly helpful. What matters more is to remain flexible because this field is changing very rapidly, and finance is evolving quickly. It is crucial to be able to quickly understand what is happening and adapt. If we had a very detailed roadmap, it might 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 tokenized stock market?
Jeff: Hyperliquid is unlikely to do these things because, so far, Hyperliquid has transformed from an initial application-based project to more of a protocol. What people think of as an application is essentially just a front end, which anyone can create, and it interacts with the blockchain basically through an API. The current focus is to make the blockchain as efficient and scalable as possible and ensure it has all the functions needed to support all financial operations. Then, others can build projects like stablecoins, tokenization, or anything else.
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 not quite in line with my view of cryptocurrency, or rather, it does not align with the vision that Satoshi Nakamoto or other people in the crypto community have for technology. Letting a company build everything can lead to a lack of resilience and strength in technology. Instead, if the core is a decentralized protocol that anyone can interact with, self-operate, and remain objective and neutral, then others can build, collaborate, compete, and combine on it. This is a very powerful system, and I believe this is 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 might have three to four thousand people. Why has Hyperliquid been 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 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.
These companies might each have, well, ten times more people than Hyperliquid. But the key is, they are also trying to do more internal work. I think this is 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 of the protocol. So perhaps 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’d better ask those who work with me. However, I think I have high expectations of people. Our team is very small, and the workload is significant. So yes, I may push people to do more than they are comfortable with, but that may 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, and the stronger the person, the better they can accomplish them. I like to let them take full responsibility.
But on the other hand, I think it’s not really feasible to just let go completely. I have always been actively involved in the technical side of things, almost constantly aware of everything happening in the tech space. Although it is becoming increasingly difficult, I feel it is very important to maintain this level of involvement because what Hyperliquid is doing is very important.
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 conflict, that is very dangerous. Correctness and performance are crucial for the scalability of the system.
The importance of leadership philosophy and team collaboration
Colin: Many young people or startups are choosing to enter the AI field now. 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 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 may not be entirely suited for it. AI has indeed taken center stage, and there’s probably a reason for that. The crypto industry has many things that are not so well-received; there have been many irregular things 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 lies in perspective. So far, the money that has been successfully made in the crypto industry has mostly been 'predatory' rather than 'value-adding.' A lot of it has been similar to scams, creating demand for a certain token and then easily selling it. I think that’s very unfortunate. It has given certain people a lot of power but also attracted those who want to abuse the system. If you look at it from this angle, then there really isn’t much worth building.
But if you look at it from another angle, finance is outdated, and the infrastructure supporting finance is also 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 significant. They are currently larger and more valuable than the crypto industry. Moreover, I believe that crypto can indeed provide the best solutions for these issues. So, I hope there will be more practical use cases in the coming years. It seems like a golden opportunity, accompanied by policy changes and widespread optimism in the tech field.
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, 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: Next question, possibly a bit more personal. If you don't want to answer, that's fine. Are your parents Chinese immigrants? Can you speak Chinese?
Jeff: Right, both my parents are immigrants from China. So I am a first-generation American, born and raised in the United States. I am a mix of Eastern and Western cultures.
I think many Eastern and Western values are complementary. Looking back, this may be a significant 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 America. 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 in their ability to change the world. This is a very typical American mindset, and as someone who grew up in America, I resonate with this philosophy.
I don’t care much about politics; I just want to get things done. But I think these entrepreneurial values resonate very well with me. As for the Eastern part, I don’t know much about Chinese history and such. I think my generation might have a drawback of losing some connection to their roots after immigrating to a new country.
So, I feel a bit guilty about that, 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 influenced the way I work and build. 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, could you say a few words to the Chinese community or Chinese fans? They have always been very supportive of Hyperliquid. Also, a more interesting question — do you think we are still in a bull market? What’s 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. Ultimately, Hyperliquid should not be constrained by any boundaries, whether political, national, or otherwise. I sincerely 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 this philosophy. It’s really cool to see people from all over the world supporting it and succeeding by building it, and I hope to continue to support everyone in this process. As for the bull market, I’m actually not an expert in that regard; I have no idea.
I have always focused on automated trading, and my focus is on understanding the detailed time frames of the market. My thinking model is that it’s hard to make confident predictions over long time frames.
If you think you know, you might be wrong. I believe that the smartest people who can make long-term predictions must make those predictions with a lot of uncertainty. For example, if you ask Warren Buffett how Coca-Cola's stock will perform in five years, he wouldn't confidently say it will be big. He might just give some vague answers about the fundamentals, or something like that.
So, this isn’t my area of expertise, but I think it’s really not that important. If your primary 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 isn’t as significant. In a sense, building during calmer market periods is actually better because there are fewer distractions. That has always been my approach.
Read more, attached are two 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
