As TradeXYZ's business continues to grow and maintains over 90% market share in the Hyperliquid HIP-3 market, the community's discussion on the possibility of TradeXYZ breaking away from Hyperliquid and independently building a trading platform has heated up recently.
Former Messari researcher Sam posted on Platform X, stating that as an investor bullish on HYPE due to the explosion of the RWA perpetual contract market, they should ask themselves three questions: first, where would users go to trade if TradeXYZ leaves Hyperliquid and launches its own trading platform; second, how would TradeXYZ issuing its own stock/token affect HYPE's valuation; and third, just how likely are the two scenarios above to occur.
Within just a few days, the post has garnered over 470,000 views. The rapid increase in discussion on this issue is rooted in a growing realization among more market participants that in the partnership between TradeXYZ and Hyperliquid, the value contribution of both parties is changing, with TradeXYZ gradually gaining more market influence and bargaining power compared to Hyperliquid.
In business partnerships, once one party begins to control more resources and market discourse, and the interests of both sides become significantly unbalanced, "betrayal" often occurs.
A recent example comes from the AI industry. Cursor was once the largest AI coding tool in the market, utilizing Anthropic's Claude model at its core. They were supposed to be a "golden duo" in a partnership until Anthropic made a betrayal — launching Cursor's direct competitor, Claude Code. By mid-2026, Claude Code's ARR officially surpassed Cursor, pushing it off the table.
The blockchain industry has similar examples, where a single product always deviates from its original infrastructure after scaling and builds its own chain ecosystem, such as Uniswap, dYdX, etc. Even the hottest project in this cycle, Polymarket, has been rumored multiple times to be leaving the existing Polygon infrastructure to establish an independent one.
Returning to the current issue, what is the likelihood of TradeXYZ leaving Hyperliquid to become independent? If this scenario does occur, what impact will it have on both Hyperliquid and TradeXYZ? Odaily Planet Daily will briefly analyze this in this article.
Is Independence Inevitable?
There is a phenomenon in the blockchain industry where a project initially starts and grows on a certain public chain or infrastructure. Later on, for reasons such as performance, control, capturing underlying fees, or a larger narrative for fundraising, the project chooses to independently build its own infrastructure (L2 or standalone L1). TradeXYZ has indeed grown large enough by now.
According to flowscan data, as of now, the total transaction volume on Hyperliquid HIP-3 has exceeded $469.62 billion, with TradeXYZ contributing over $437.4 billion, accounting for 93%; as of the time of writing, the total OI of Hyperliquid HIP-3 has reached $3.9 billion, with TradeXYZ contributing over $3.8 billion, accounting for 99.7%.
The remaining few exchanges together hold less than 10% of the market share. HIP-3 has already formed a significant Matthew effect. In this sense, it is not an exaggeration to say that the HIP-3 market of Hyperliquid is entirely dominated by TradeXYZ. The narrative premium brought by the RWA on-chain contracts to Hyperliquid is essentially the narrative premium brought by TradeXYZ to Hyperliquid.
From both a valuation and protocol revenue perspective, TradeXYZ is no longer dispensable for Hyperliquid, but rather plays an essential role in shouldering the main responsibilities in the crypto market's downturn and the shrinking trading volume of crypto derivatives such as Bitcoin.
According to official data, the share of HIP-3 in the total transaction volume of Hyperliquid has reached 71.92%, setting a historical record high. Based on TradeXYZ's dominant position in HIP-3, the volume contributed by TradeXYZ accounts for over 70% of Hyperliquid's total transaction volume. The share of HIP-3 in the total OI of Hyperliquid is 36%, which also means that the OI contributed by TradeXYZ accounts for over 35% of Hyperliquid's total OI.
Therefore, TradeXYZ has leveraged Hyperliquid's infrastructure to grow into a behemoth capable of influencing the traditional financial markets. Now, in its partnership with Hyperliquid, its leverage and influence have begun to take precedence. So, when a child grows up, is it time for them to stand on their own? What factors would prompt TradeXYZ to choose to build its own infrastructure?
Setting aside factors like financing, token issuance, and other complex financial operations, from a practical business perspective, if TradeXYZ truly decides to stand alone, the most likely reason would be to capture base layer fees.
In the Hyperliquid HIP-3 market, TradeXYZ has a fixed 50/50 split of trading fees with Hyperliquid. Since the standard transaction fee for HIP-3 assets is twice the core perp market fee, Hyperliquid's actual protocol fee per HIP-3 trade is the same as the core perp market.
It is estimated that up to the time of writing, TradeXYZ has generated nearly $50 million in total fee revenue. According to the profit-sharing ratio specified in HIP-3, TradeXYZ can only take home a maximum of $25 million.
It's hard to imagine a project that has generated over $400 billion in trading volume where the total revenue hasn't even reached one-thousandth of the total trading volume. Surrendering close to half of the revenue is unacceptable for most projects. With TradeXYZ's current leverage over Hyperliquid, it can certainly negotiate with Hyperliquid to modify the revenue split to seventy-thirty or higher. If a mutually agreeable arrangement cannot be reached, TradeXYZ is highly likely to pursue the path of standing alone.
Why Won't TradeXYZ Leave?
For TradeXYZ, standing alone is both enticing and constraining.
The first constraint is the powerful performance of Hyperliquid. All TradXYZ perpetual contracts are deployed on Hyperliquid's HIP-3 platform, where the matching engine, order types, funding, clearing, and auto-deleveraging are all managed by HyperCore. Technically, TradXYZ only manages the oracle price, mark price, external price, and related components.
If TradXYZ chooses to stand up its own portal, they would need to build a team to construct the underlying infrastructure. While this is not a significant challenge, quickly building an L1 with the same powerful performance as Hyperliquid is a different story. Even TradXYZ's founder, Shoku, acknowledged the excellence of the Hyperliquid team. In a March 2024 post on Platform X, Shoku expressed uncertainty about how Hyperliquid would ultimately perform in traditional metrics such as TVL and trading volume, but he was fully confident in the quality and rigor of Hyperliquid's on-chain products and dApps, believing there would be no competitors in the entire crypto space.
These competitors naturally include himself. If the infrastructure built by TradXYZ is insufficient to compete with Hyperliquid, it will have a negative impact on the product experience and the narrative of price discovery ahead of the traditional financial markets.
The second constraint is that channels and distribution are also crucial. Why was Circle willing to hand over more than 50% of the USDC's interest income to Coinbase? The reason is that Coinbase has indeed made a huge contribution to the market distribution and promotion of USDC. According to Coinbase's latest Q2 financial report, over 30% of the circulating USDC is stored on Coinbase. Whoever controls the channels and distribution holds all the cards, and this rule equally applies to TradXYZ and Hyperliquid.
Essentially, Hyperliquid's frontend is just one interface to access the TradXYZ liquidity market, but it is not the only path. Users can currently directly access the TradXYZ liquidity market through the TradXYZ official website, and the trading interface is highly similar to Hyperliquid's. To further facilitate users, TradXYZ's internal accounts and Hyperliquid are interoperable, meaning that by connecting the same wallet on the TradXYZ website, if there is a balance on Hyperliquid, it can be used directly.
However, even so, among TradeXYZ's 350,000+ trading users, the majority still access TradeXYZ's liquidity pools through Hyperliquid's frontend. This is due to users' long-term habituation and reluctance to change, to the point where a certain percentage of users cannot even distinguish between TradeXYZ and Hyperliquid. They simply trust Hyperliquid's brand and passively choose to trade on TradeXYZ's platform.
Therefore, Hyperliquid not only provides technical support to TradeXYZ but also serves as the main channel for TradeXYZ's liquidity distribution. The cost and time to build such infrastructure can be calculated, but the value lost by losing this channel is immeasurable.
The third constraint is that the two project founders already have mutual trust, a "mutual trust without doubt." Solana's renowned KOL Ansem believes that the possibility of TradeXYZ standing alone is almost zero. He thinks that TradeXYZ and Hyperliquid are the two most compatible teams in the cryptocurrency field. "The two founders have no greed at all, and they are both very intelligent. I believe they can choose the most beneficial development path for both teams."
This view is not unreasonable. Shoku was one of the earliest investors in Hyperliquid. As early as 2023, Shoku partnered with Jeff to contribute to the Hyperliquid ecosystem, and in 2024, he developed Hyperliquid's Bitcoin cross-chain bridge Unit. He once revealed to a friend that Hyperliquid was one of the few exciting things in the crypto world.
Many signs indicate that Shoku greatly admires Hyperliquid and Jeff. From a personal relationship perspective, the likelihood of "betrayal" is low.
If TradeXYZ Stands Alone, It Will Be a Lose-Lose Situation
If we are to delve deeper into this topic, this article should not end here. We should also discuss an extremely unlikely event: if TradeXYZ really separates from Hyperliquid and stands alone, what would be the outcome? My answer is that it would be a lose-lose situation.
Given the current situation, a split within TradeXYZ would introduce significant uncertainty and harm to both TradeXYZ and Hyperliquid, as their current partnership is mutually beneficial. While TradeXYZ could potentially thrive independently, Hyperliquid could pivot to support other HIP-3 market participants. However, this shift would transform their relationship from collaboration to competition. The impact on Hyperliquid's revenue would be relatively minor, as over 70% of its core revenue still comes from the primary Perp market, with the HIP-3 market representing a small portion and primarily affecting its valuation.
Firstly, post the TradeXYZ migration, Hyperliquid would experience a reduction in total trading volume of over 50%, potentially leading to a significant decrease in the value of the HYPE token. Hyperliquid would transition from being the leading on-chain RWA perpetual contract trading platform to a crypto derivatives exchange that has lost its main growth driver and narrative foundation.
TradeXYZ would also face challenges of its own, needing to establish infrastructure and user habits from scratch. The performance and channel issues mentioned earlier would be the primary constraints on TradeXYZ's development. Moreover, such a perceived act of betrayal could trigger public controversies, further damaging TradeXYZ's reputation.
Furthermore, TradeXYZ and Hyperliquid are not only competing with each other but also facing competition from other players in the RWA trading market. While Hyperliquid nurtures a new HIP-3 market, and TradeXYZ builds its infrastructure, by the time they look up, their market share may have already been seized by other competitors.
In conclusion, although TradeXYZ has become increasingly crucial to Hyperliquid, pursuing full independence appears unwise. Even if TradeXYZ aims to enhance its profitability, the best approach may be to gradually shift focus towards its token issuance and user ownership while retaining the existing integrated advantage with Hyperliquid.
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