This episode features the transcript of the When Shift Happens podcast interview with Hyperliquid Co-Founder and CEO Jeff Yan. Jeff reflects on the wealth effect and shift in responsibility brought about by the TGE (Token Generation Event), elucidates Hyperliquid's core design philosophy of "no whitelist, no discretion," and explains why the protocol fee is consistently used for automatic buyback and burn rather than discretionary timing.

He emphasizes that Hyperliquid is not a "crypto company" but a "financial protocol" upgrading financial infrastructure with cryptographic technology, aiming to "housing all of finance" — enabling all financial activities to take place within a composable, permissionless, transparent on-chain system.

Additionally, Jeff elaborates on how HyperEVM, HIP-3 (Permissionless Perps), Outcome Markets, and key modules such as the USDH stablecoin, Kinetiq staking, Hyperlend lending, collectively build a decentralized, scalable, composable on-chain financial ecosystem.

In response to external skepticism, he stresses that Hyperliquid does not operate in a corporate manner, there is no "buyback timing" or "human intervention," and all mechanisms are encoded and executed on-chain. He further points out that the true competition lies not in short-term data but in whether a trustless, globally accessible financial system can be established.

The entire conversation presents a core proposition: in the era of accelerated 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.

About the Wealth Effect and Long-termism

Discussing the Singapore Entrepreneurial Environment

Kevin: How do you view Singapore?

Jeff: It's great. It's indeed a very suitable place to get things done, to carry out projects. It's very safe here, very modern, and the infrastructure runs smoothly. Many people may say it's 'boring' and see it as a downside, but for me, it's actually a significant advantage. Here, you can focus on building, without too many distractions. It's a place very conducive to getting things done.

Were you anticipating wealth creation on this scale?

Kevin: Did you anticipate such a massive wealth effect at the time?

Jeff: I did not anticipate it. To be honest, I rarely envision specific outcomes at a certain point in time. We were more focused on doing things to the best of our ability. We knew our direction and what we were building, but I wouldn't write down something like, "It would be great if we hit a certain quantitative milestone in a month." That's not how I operate.

As contributors, there are too many variables out of our control. We need to focus on doing what needs to be done well. The outcome largely depends on our efforts, but it is also influenced by many external factors.

However, I was indeed surprised by the overwhelming positive feedback later on. Hearing people say, "This is rare in the crypto industry," "This is what should have happened, but genuine examples are rarely seen," felt really good. Some also said that Hyperliquid showed the positive path this industry could take.

This brought me great satisfaction because I truly believe in this model and in free markets. There are many examples from the outside used to prove that "this model doesn't work." And when you become a case that can refute these doubts, it feels really good.

Crypto Industry Talent Mismatch, Should "Do the Right Thing" to Change Industry Perception

Kevin: Obviously, what you've achieved is very difficult. But do you think that in the crypto industry, there are enough people trying to do things the right way?

Jeff: I believe that in the crypto industry, there is a significant mismatch between what can truly be built and the people trying to build it.

This is largely due to the crypto industry's long-standing negative reputation. You can compare it to fields like AI or traditional finance and tech projects before AI. If someone is talented, graduates from a good school, or is very gifted and wants to create something of real value—today, I think many such individuals wouldn't even seriously consider entering the crypto industry.

Because this industry is filled with too many negative cases, creating a stereotype: as if only those who don't take product development seriously and just want to make a quick buck are here.

But I believe this view is completely wrong. This is not where the true potential of this industry lies.

Kevin: So how do we change this situation?

Jeff: What we can do is to keep on Building. Focus on building what we truly believe in.

When I say "we," I mean the entire ecosystem, not just one team. For example, the Hyperliquid ecosystem has never cared much about what the "Market Meta" is or been swayed too much by external opinions—such as what everyone theoretically thinks "should be done now" or "which track is hotter." We, more as a community, do what we truly believe in.

I think that might be the best thing we can do—use actual results as feedback and demonstration.

Of course, as a permissionless network, there will inevitably be some not-so-great examples. There will always be people trying to exploit the community, exploit mechanisms, and then engage in short-term arbitrage or value extraction for personal gain. It is indeed regrettable to see such situations.

But overall, I believe our community's direction is very correct. There is a great cultural atmosphere here. If we continue to Build in this way, I hope the outside world will gradually take notice of this, and more people who truly want to build long-term will be willing to enter the DeFi space.

The Responsibility Behind Massive Wealth

Kevin: I think a lot of people are indeed paying attention to you now. As a founder, when you almost overnight created billions of dollars in wealth, what do you feel is the accompanying responsibility?

Jeff: I'm not sure if specific events like the Genesis moment or TGE really changed the responsibility itself. I think that whenever you are building any financial-related product, there is inherently a huge responsibility.

If you choose to do financial infrastructure, you have to go all out. Even then, you still feel like there is too much to do. Because finance is an extremely important part of life. When a person uses a financial product, the level of trust they give you is far higher than the trust they give when using a regular consumer product.

So, I don't have a particularly grand answer either. What we can do is make every effort to execute to the fullest and strive for near-perfection.

This may mean that we will slow down; it may also mean that we choose to build in a more challenging, more complex way. There are actually many similar examples. We must always design systems around some core principles: to remain neutral, fair, and resilient in various market conditions.

These principles will not change due to the TGE. Even before that, users have been trusting Hyperliquid—trusting it as an on-chain, fully verifiable, transparent alternative to replace the opaque systems they were already tired of. It is this trust that is our true responsibility.

From "In-Group Belief" to Global User Orientation

Kevin: The last time we recorded a show was about a month before the TGE. At that time, I did something I often do to test community authenticity—because in the crypto industry, there is too much fake data, bot accounts, which is a well-known issue. So I took a group photo and posted it to see the community's reaction. The results exceeded my expectations by far, and I felt at that time that this community was even stronger than I had anticipated.

It felt a bit like "In-Group Belief," but more like a hidden code—those who get it, get it, but many insiders still don't fully understand what's going on. Then the TGE happened, and many things were almost done in the right way. You went from a "belief-oriented community" with strong cohesion in the crypto circle to a project supported by the entire industry.

So, what's next to make Hyperliquid a "code" that can attract out-group users? How do you get people outside the crypto industry to join in?

Jeff: I think, ultimately, it's about providing real value. This applies not only to Hyperliquid but to all Builders.

I don't think the goal is to build a "fanatical community." What people see as the so-called "belief" or "cult vibe" is essentially a resonance that people have with a group of Builders moving towards a common goal and holding clear values. The reason it seems scarce is that such long-termism and value consistency are not common in the crypto industry.

I'm not too keen on calling it "belief." In my view, this is just people coming together, doing the right thing in the right way, upholding the principle of fairness, to build an open financial system. This should have been the "norm" from the beginning.

If we want the whole world to join in, we must continue to prove: we can build value that the traditional financial system cannot. I am very confident in this.

From a more macro perspective, DeFi has always carried this promise. Many past issues were actually a gap between ideology and technical implementation. An open financial system is beneficial to the world, this is almost undisputed. The key lies in execution, and in not allowing misconduct, short-term temptations, or personal gain to disrupt the overall direction.

I believe there are only two key points: first, proper execution; second, sticking to doing things the right way. If these two points can be achieved, then DeFi is fundamentally a massive technical upgrade to the existing financial system. When this becomes clear enough, people will naturally join in.

Will Milestones Be Celebrated?

Kevin: Did you celebrate at the time? Or was everything just business as usual? I ask because I remember a story mentioned by Paradigm's Matt Huang—about an IPO of a certain Web2 company, where champagne was prepared on the day, but the whole team ended up having a glass of water each, then went back to work until midnight, with almost no celebration.

So I'm curious, what happened at Hyperliquid Labs back then? You just mentioned it was a milestone, and there are many more things to do in the future. Would there be some form of celebration? Or was it like, "This was always in the plan," and then continue to focus on the next goal?

Jeff: Let me think... it does seem like there wasn't really a formal celebration. In hindsight, it does feel a bit regretful. Because if you look back, there were indeed many moments worth celebrating. But in the moment, there's always more to do. You never find a "perfect time" to stop and celebrate.

Perhaps it would take many years, when the entire system is running fully autonomously, everything is mature, complete, and truly becomes a stable operational financial system, maybe that's when the celebration will come.

Of course, everyone might celebrate in their own way. But at least at the team level at Hyperliquid Labs, we don't have a culture of "launch a feature, pop the champagne." That's not our style.

I think this is more of a cultural issue—we naturally focus more on what to build next, rather than stopping to celebrate what has already been accomplished.

About Team Selection, Work Intensity, and Privacy Boundaries

How to Select for "High Integrity" Team Members

Kevin: How do you test if someone has "high integrity"?

Jeff: That's a very good question. Honestly, there isn't a perfect method.

In the hiring process at Hyperliquid Labs, we definitely conduct extensive technical assessments, but in addition to that, we always make sure to schedule at least a whole day of actual collaboration. Not the kind of highly time-compressed, simulated environment interview, but real hands-on work together.

When you collaborate with someone for a long time, discuss issues, write code together, and face real challenges together, you slowly get a sense of what this person is like. There are a lot of "soft signals" in this process — hard to quantify but perceptible. You can never be 100% sure of a person's character, but sometimes there are signals that make you feel "this risk is not worth taking."

Additionally, we also ensure that every team member feels truly comfortable with the new addition. There have been cases where some team members are very supportive of a candidate, while others are more reserved. Usually in such situations, we choose not to proceed with the hire.

Kevin: So it's a consensus mechanism? Everyone votes together?

Jeff: It's not exactly a formal vote. There's no formalized voting process. But basically, as long as anyone voices a moderate to strong objection, that usually is enough to veto the hiring.

Regarding Work Intensity and Sleep

Kevin: How much do you sleep? How much do team members sleep? Do you "allow" them to sleep?

Jeff: It really depends on the individual. We don't pressure anyone on "time spent" because that's usually the beginning of a disaster.

If someone truly needs sleep but hasn't slept well, anything they produce will have a drop in quality. Our quality standards are very high — even in an energized state, producing excellent engineering code requires full dedication.

So we operate on a high level of trust in this regard. I also don't subscribe to that "all-nighter culture" or the atmosphere that glorifies staying up late. My personal work hours may be longer than many who advocate this culture, but I don't think that should be a hard requirement for the team.

There are indeed team members who work very late, as well as those who have a fixed highly productive period every day. As long as they can consistently deliver A+ level results, we don't care how many hours they specifically put in.

For us, what matters is not "how long you work," but "the quality of your output."

Employee Token Unlocking and Privacy Boundary

Kevin: On to the last question about the team. I promise this is the last one. There has been a lot of FUD in the past few months, and one of the concerns from a community member, a token holder, is regarding the employee token unlocking schedule. Many are worried that roughly $300 million worth of tokens will be entering the market every month for a long period. What is the actual situation?

Jeff: We will not discuss these specific circumstances publicly. Because I genuinely believe financial privacy is a fundamental right. It is one of the reasons we entered the crypto industry and engaged in DeFi.

Just as you wouldn't demand that a community member publicly disclose, "You hold a lot of tokens, you must tell everyone what each of your transactions is doing." I think there must be a clear boundary drawn here, and that line is personal privacy.

I believe that how the protocol operates must be entirely transparent. Every dollar's flow must be clearly traceable; the assets in the system must truly belong to their respective holders; the protocol rules must be public and verifiable. This level of transparency is a non-negotiable prerequisite for an open financial system. Without this transparency, we would see the same issues we see on some centralized exchanges.

On the other hand, how any contributor deals with their own tokens is their personal asset. This should not be subject to public scrutiny, nor is it my responsibility to judge or disclose.

The protocol must be transparent, but individuals must have privacy. These two are not contradictory.

Addressing FUD, Automatic Burn Mechanism, and Removing Human Discretion

How to Address FUD and External Attacks

Kevin: The way you handle FUD and external skepticism is quite interesting. Many feel that Hyperliquid's approach is to ignore and remain silent.

Jeff: Actually, it's not quite like that. Indeed, in the early days, we tended to lean towards not responding. But later on, I realized that my own PR instincts were not always correct. So now I'm more willing to leave this part to more professional people to judge and handle.

One thing we later deliberately adjusted—when FUD appeared, my instinctive reaction was often: "This is obviously wrong, the truth will eventually come out on its own." But I gradually realized that this mindset is not always right.

From a practical point of view, if there is misinformation being spread, and clarification is indeed needed, we will come out to respond. We will explain and correct specific issues rather than ignore them altogether.

Of course, we won't respond to every single voice. The key is to judge: will this mislead users, damage community trust, or affect the protocol's proper understanding? If so, we will address it proactively.

So, rather than saying we "ignore FUD," it's more accurate to say that we are learning how to maturely and strategically deal with it.

Kevin: Will these FUD attacks personally affect you? Honestly.

Jeff: It depends on the type of FUD.

Over the past six months, the overall cryptocurrency market has been very volatile, and often downward. Some events have indeed caused substantial harm to the market. And because Hyperliquid is one of the few truly transparent exchanges, much of the discussion naturally focused on us.

During that time, I was indeed very concerned. I was almost acting with a kind of "sense of mission," wanting to explain some technical details clearly. Because these issues were very personal—many people may have actually lost a lot of money. In that kind of situation, emotions are highly sensitive.

But I also saw that some competitors were deliberately engaging in "misleading descriptions" of Hyperliquid from different angles. They downplayed where we did things right and used a negative narrative to shift attention from their own issues.

This situation made me angry because it was clear that they knew what they were doing.

But on the other hand, this anger eventually turned into motivation—driving me to explain more clearly to users why Hyperliquid was designed this way and why transparency is so important.

For example, some centralized exchanges would reference statistics from certain data analysis websites, saying, "Look, Hyperliquid has more liquidation events than us." But if you were to look at those platforms' documentation (although very few people would), you would find that they might only report the "first liquidation per second" without disclosing all the data. They don't explain why they only count this part.

On Hyperliquid, every order, every cancellation, every liquidation is all openly verifiable on-chain. When you compare a piece of "partially disclosed data" to "fully disclosed data," you will naturally arrive at a misleading conclusion.

This is fundamentally an information asymmetry, even outright deception.

What is even more discouraging is when some highly influential voices in the industry with a large following amplify this narrative, the impact is rapidly magnified.

Our voice may be smaller, our reach narrower. But precisely for this reason, we need to speak up loudly, clearly, and repeatedly to explain the facts at critical moments.

I won't pretend that these things won't affect me. They will. But what they bring more is a sense of responsibility, not retreat.

Automatic Buyback Burn Mechanism vs Discretionary Buyback

Kevin: There are many people in the ecosystem supporting you, but there are also some quite smart industry professionals criticizing Hyperliquid. A common view is: you conduct token buybacks every day, but when the price is high, you should stop buybacks and increase them when the price is low. What do you think is the core issue with this view?

Jeff: The core issue is that — we are not a "discretionary buyback program" at all.

Many people perceive it as a corporate action, but this is actually a flawed analogy. Hyperliquid is a rules-based protocol, not a company that can make subjective decisions.

By analogy: on Ethereum, the priority fee is now directly burned. You wouldn't ask Ethereum developers to say, "When the ETH price is high, Vitalik should divert these fees to other investments instead of burning them."

Because that is not a decision that can be subjectively made — it is part of the protocol-level rules.

Hyperliquid is the same. Fees generated by the protocol are automatically converted to HYPE according to predefined rules and then burned. This is not a team's spur-of-the-moment decision of "how much to buy today, when to stop." The entire conversion logic is embedded in the chain's execution mechanism itself.

I believe the reason for this misunderstanding is that many centralized or semi-centralized exchanges do have a "token buyback" practice. In that model, the company can decide when to buy back, how much to buy back, whether to pause. For that structure, discussing timed buybacks makes sense.

But on Hyperliquid, the fees are converted to HYPE and burned, it is automated on-chain logic.

This is similar to on-chain TWAP order execution—when you submit a TWAP, no one is sitting there manually deciding when to split orders, when to input the next order into the order book. That is part of the protocol execution logic.

Likewise, how fees are converted, how they are burned, is also entirely part of on-chain execution logic, not a manual operation.

So the crux of the issue is—many people have misunderstood a "protocol-level automatic burn mechanism" as a "company-level timed buyback strategy." These two are entirely different in design philosophy and governance logic.

Why Must Human Discretion Be Eliminated

Kevin: Why is "no discretion" so important for Hyperliquid?

Jeff: Because Hyperliquid is not a company. This is another common misunderstanding.

When I say "we," or refer to Hyperliquid Labs, we are just a very small team. Our responsibility is to build a small but critical part of the entire Hyperliquid ecosystem. We are not "Hyperliquid itself."

Many people are used to using analogies from traditional finance to understand everything. Because people don't like to learn entirely new concepts, they prefer to fit new things into existing frameworks. This can indeed find some similarities, but there are also many fundamental areas where it does not apply.

Hyperliquid is not a mapping of some existing entity in the traditional financial world. It is not a company, not an exchange company, not an organizational structure "creating value for shareholders."

Our vision is to have the financial system itself operate on-chain.

Yes, the protocol does create value and feedback that value to the native token. This is positive. But this is entirely different logic from a company returning profits to shareholders through operations.

The company is a centralized entity with management, a board of directors, and subjective decision-making power. In contrast, Hyperliquid is a neutral platform, serving as infrastructure for finance.

From a different perspective, it is more akin to the internet's role in information. The internet is not a company, not created to profit shareholders of the "internet." It is a neutral infrastructure protocol that enables the free flow of information.

Likewise, Hyperliquid, as an ecosystem, network, and protocol, aims to be the infrastructure layer for finance.

Once you grant a core team "discretionary power," such as deciding when to buy back, when to pause, you are essentially pulling the system back into the "corporate model."

We choose rule-based, automated, immutable mechanisms to ensure that this system is neutral, trustworthy, and not reliant on any team's judgment.

If the goal is to build a true on-chain financial system, removing human decision-making power is not an option but a prerequisite.

About HyperEVM, Permissionless Perps, and On-Chain Finance

The Essence and Significance of HyperEVM

Kevin: Last time you were on the show, we talked about your vision to become the "AWS of liquidity." This time, let's discuss what has happened since then. Let's start with HyperEVM. What is HyperEVM? Explain it in the simplest way possible, avoiding industry jargon.

Jeff: Simply put, HyperEVM is — enabling developers to migrate the smart contracts they originally deployed on Ethereum to run directly on Hyperliquid with minimal changes.

You can think of it as a "blank canvas." Developers can deploy contracts on it, run logic just as they did on Ethereum.

At first glance, the user experience is quite similar to Ethereum's. The innovation accumulated by Ethereum over the past few years — development tools, contract standards, application patterns — can all be reused on Hyperliquid.

Kevin: What are your candid thoughts on how HyperEVM is performing at present?

Jeff: This is a somewhat subtle issue.

Firstly, I think one common misunderstanding from the outside world about HyperEVM is that it has not been "successful." If needed, I can provide many examples of where it has excelled.

More importantly, if you look one layer deeper, HyperEVM is not just about "porting over the Ethereum stuff." Its true uniqueness lies in: for the first time, allowing smart contracts to directly invoke Hyperliquid's native on-chain capabilities. This is crucial.

I believe this aspect of the narrative has not been fully grasped. HyperEVM is not just another standalone EVM chain. It is more like a "gateway" — an interface that can directly tap into Hyperliquid's native liquidity and on-chain infrastructure.

So when evaluating HyperEVM, it should not simply be compared to other fully self-contained EVM chains. It is not an isolated ecosystem but a gateway to the core capabilities of Hyperliquid. From this perspective, its significance is entirely different.

Why HyperEVM Is Underestimated

Kevin: In simple terms, is it because people still haven't fully understood HyperEVM?

Jeff: I think some people have understood it, but this understanding has not really entered the mainstream narrative. Let me give you a specific example. In the past, there was a longstanding criticism: "Why hasn't Circle deeply integrated?"

The issue is that HyperCore itself is a completely native implementation of a full set of financial primitives, such as account balance ledger, and so on. This architecture is different from the structure of traditional general-purpose blockchains. For companies that already have mature infrastructure and are specially tailored to generic blockchains, directly integrating with HyperCore is actually very difficult. And this is where HyperEVM comes in — it provides a bridge.

For example, the minting and burning logic of native USDC can be completed through Circle's existing Hub-and-Spoke network structure: you can burn on one chain and mint on another. HyperEVM is one of the supported chains.

But to truly understand this point, you must understand the purpose of the entire architectural design. It is not merely to "launch an EVM environment" but to allow external infrastructure to connect in a standard way while also deeply interacting with HyperCore's native capabilities.

The issue is that — when these integrations are done well enough, they are "seamless." The user experience is very smooth, and you won't realize that this is achieved through the special interaction of HyperCore and HyperEVM. It is also for this reason that it is difficult to form an "explicit success story" narrative.

Many people ask: "Why haven't I heard any success stories about HyperEVM?" On the one hand, many truly large applications are still being continuously built. On the other hand, those integrations that have already succeeded, precisely because they are done natively enough, are not perceived as "special." If an infrastructure is truly successful, it looks like a matter of course. This is, to a certain extent, also a reason why it is underestimated.

HIP-3: The Significance and Challenge of Permissionless Perps

Kevin: Another thing you launched last year, which may not have been so easy for most people to understand at the time, but now we have seen very concrete results through this HYPE of HIP-3 — Permissionless Perps — what does this mean exactly? Can you try to explain it in the simplest way possible?

Jeff: Simply put, Perps (perpetual contracts) are one of the most important innovations in the crypto industry. Although perpetual contracts may have had a theoretical basis in academic literature a long time ago, the real success in implementing it in practice and proving it as a more efficient price discovery tool was done by BitMEX. It concentrated liquidity on a never-expiring contract, thereby improving market efficiency.

The core idea of HIP-3 is actually very simple: in the matter of perpetual contracts, the crypto industry does not have any "exclusive" restrictions. Therefore, as long as an asset has sufficient liquidity and already has existing futures or options markets, there should also be a corresponding perpetual contract for it. We are not saying that perpetual contracts are necessarily better than all other derivatives, but users should have this choice.

I have always believed that if traditional finance widely adopts perpetual contracts across more asset classes, a significant portion of trading volume in the market will shift to Perps. Because they are one of the most direct tools for expressing views, especially in leverage and bi-directional trading.

A one-sentence summary of HIP-3 is: allowing anyone to deploy perpetual contracts on Hyperliquid, i.e., "Permissionless Perps."

But behind this statement, there is actually a significant amount of intricate work. Because prior to this, no one had truly built a fully permissionless perpetual contract deployment system.

For example, there are many core issues that need to be addressed:

First, can the protocol entrust highly critical functions such as real-time Oracle updates to a permissionless deployment system?

Second, perpetual contracts are highly coupled with the margin system. Once permissionless, numerous edge cases and risk scenarios arise that require very careful design.

Third, how can the system's robustness and security be maintained while transitioning to an open deployment? These are not issues that can be easily solved by changing a few lines of code; they are deeply intertwined. In addition, builders need to dedicate time to truly understand a whole new mechanism and be willing to develop applications on top of it. This, in itself, takes time.

To be honest, before HIP-3 was introduced, many people might have thought it might not necessarily succeed. Even we ourselves cannot be 100% certain of its success. However, logically speaking, it should be feasible.

Moreover, when a ecosystem gathers a large number of capable developers and users who truly identify with the ecosystem and are willing to help initiate a new network effect, then this kind of innovation should succeed in such a place — in an environment like Hyperliquid, which provides fertile ground for success.

The Fundamental Difference Between Hyperliquid and Centralized Perpetual Platform Models

Kevin: Can you explain the difference between what you are doing and what everyone else is doing?

Jeff: I am not in a good position to evaluate what "everyone else" is doing, but regarding many attempts I have seen in the non-crypto background to do perpetual contracts (Perps), the basic logic is this: A trading platform was originally running a crypto perpetual contract business, and then it says, "We will integrate price data sources for other assets, and then offer perpetual contracts for these assets in the same way."

This pattern can be seen in many centralized exchanges and some decentralized exchanges. The core idea is actually: the same platform, the same architecture, the same team, to list perpetual contract products for more assets.

Kevin: So what is the real difference between your approach and these players? Why should users care?

Jeff: For end users, they may not necessarily need to care about how the underlying technology works. But if we truly want to move the entire financial system onto the blockchain, we need to have true domain experts deploy and build these products.

Look at the traditional financial system, where each country has its own transaction platform system; beneath each country, there are different asset classes; different asset classes trade on different platforms with different rules; and even within the same country, different asset classes have different trading interfaces. As you keep breaking it down, you'll find that the financial industry is fundamentally highly specialized.

Of course, some of this complexity does come from the inefficiencies of the traditional financial system itself. The crypto industry has to some extent eliminated some intermediary steps. But on the other hand, finance itself is too large to be fully built by one team.

Many large financial institutions may choose another path: to continue maintaining a centralized "super platform," attempting to integrate users' entire financial lives in one place. Through acquisitions, partnerships, or internal development, they may integrate all asset classes into a unified system. This is a top-down integration approach.

This model indeed advances faster, has less fragmentation, and may provide a better initial user experience. However, the issue is that it is very fragile. When a problem arises, it is often because power is overly concentrated in the hands of a single entity. When a system consolidates everything in one place, so do the risks.

I believe that end users will choose a system that truly empowers them with financial sovereignty. This system must be globally accessible, have sufficient liquidity, and possess all the features they need.

And to build a system that truly serves global users, it must achieve decentralization in multiple dimensions. Ownership decentralization is one important principle, which is also one of Hyperliquid's core emphases. Equally important, however, is decentralization in the sense of "who builds the core products that users interact with."

This is the fundamental difference between us and other trading platforms: It's not about a centralized team unilaterally listing all assets on perpetual contracts, but about building an open system that allows builders from different domains to deploy their truly understood and truly proficient markets on the same underlying protocol.

Why All Finance Must Go On-Chain

Kevin: Please summarize in one sentence: Why is it so important to move the entire financial system onto the blockchain?

Jeff: Because if we don't do this, the financial system will lag behind the pace of technological development. The world is changing too fast, and the traditional financial system cannot keep up with this rate of change or meet users' needs in a rapidly evolving environment.

Kevin: Why is Hyperliquid's approach better?

Jeff: This is not just Hyperliquid's approach. Hyperliquid is just practicing the values that DeFi has always upheld. We are just a community trying to execute these principles in a way that has a real chance of success and true mass adoption.

These core values include: The financial system should not be controlled by companies but should be a neutral base layer like the internet.

You mentioned AWS earlier, which is an interesting example. Although AWS is controlled by a company, in a sense, it is like neutral infrastructure. No one would say, "Why did you choose to use AWS? That's a biased choice." It's more like a default infrastructure.

The financial system should also have this attribute — to be a neutral, globally accessible infrastructure. People should not be forced to go through layers of approval and numerous barriers to access the financial system based on nationality, identity, or whether they come from a developed country.

In addition, the financial system should be highly programmable. Not the kind of financial tech model that plugs in some "programmable features" on top of a non-programmable traditional system, but one that is built on programmable primitives from the ground up. That is, the building blocks themselves are code, they are smart contracts, and can be interacted with directly by humans, AIs, and various programs.

If finance is to keep pace with technological development, it must become a neutral, programmable, globally open infrastructure like the internet. This is also the fundamental reason why we believe all finance must be brought onto the blockchain.

HIP-3 Data Performance and Silver Trading Use Case

Kevin: If this approach is better, then data performance should also be better. Can you provide us with some key data to demonstrate that Hyperliquid is operating the perpetual contract market in the right way?

Jeff: I still want to emphasize that we are still in a very early stage. The future is never certain, and short-term data alone cannot prove long-term success.

That being said, the existing data has already to some extent demonstrated the power of permissionless protocols—when you allow deployers to freely unleash their creative expression and truly execute their vision, the effect is quantifiable.

A very representative example is the silver market. Recently, some metal assets, including silver, have experienced very intense volatility, with consecutive days of "10 Sigma" level price movements. Both institutional and retail traders are highly focused on this market.

On Hyperliquid, the related markets launched through HIP-3 (mainly operated by the first deployer XYZ) have accounted for approximately 2% of global trading volume in the global silver price discovery.

2% may sound small, but when viewed in the context of the global silver market size, this is actually a quite astonishing figure. More importantly, these HIP-3 markets have only been online for a few months. For a recently launched on-chain perpetual market, this is a truly impressive growth.

Moreover, this achievement is not the result of the core team "trading." The core team's work is to build underlying primitives—HIP-3 itself indeed required a lot of engineering work. However, how this liquidity infrastructure is ultimately used entirely depends on the developers building on top of it.

This is more like a proof of the quality of builders: they chose Hyperliquid because only this platform allowed them to realize the market structure they wanted to build.

Kevin: You mentioned earlier that the data is starting to get interesting, but it's still early, so the future may not necessarily develop in this direction. Why do you say that?

Jeff: Because if you think something is "unshakable" just because a certain idea currently seems supported by evidence, that is very dangerous. The world is changing too fast.

Some principles are relatively stable, such as: the financial system should be open to everyone globally; finance, like information, should exist in an open system; users should have financial sovereignty. These principles will not easily change. But any specific implementation, if overly solidified, will become fragile.

When designing the core primitives of a blockchain, a key starting point is: when builders and users from different directions are all providing feedback on the same issue — "we want to do X, but the current system doesn't support it" — if you find an intersection in this feedback, that intersection itself is often a capability worth encoding into the protocol layer.

When the protocol layer very judiciously and selectively decides "what must be a native primitive, what should be left to the general-purpose EVM or application layer," the system becomes more elegant and more resilient.

This way, the protocol itself does not overly embed a particular business model or market judgment but leaves the "opinionated decisions" to builders. Builders can quickly adapt to real market changes, while the underlying layer remains neutral.

All HIP proposals, including HIP-3, follow this line of reasoning.

Spot Trading Functionality as a Price Discovery Hub

Kevin: We previously discussed the Spot Trading functionality, which was not developed by the core team but rather by a team called Unit in 2025. What does this development illustrate?

Jeff: In 2025, there were actually several key project launches, and in the early stages of these assets, Hyperliquid became the primary source of spot price discovery. Moreover, this was the first time I am aware of — a decentralized exchange becoming the dominant spot price discovery center for a new asset.

One example is XPL. At that time, in the on-chain spot market, Hyperliquid's trading depth and volume were leading during critical phases.

In a sense, spot trading is the closest form to Satoshi Nakamoto's original vision of "peer-to-peer electronic cash." Because when you engage in spot trading, you are fundamentally transferring assets on-chain:

One party transfers the quote asset to another party; the other party transfers the base asset back to the first party. Order books, on-chain matching mechanisms, etc., are just tools to facilitate these on-chain asset transfers.

If you were to ask Satoshi Nakamoto how Bitcoin should be traded, I am confident he would say it should be done in a fully on-chain manner. Of course, the Bitcoin network itself may not be suitable for complex matching logic, but the transactions themselves should be peer-to-peer.

On Hyperliquid, we have done a lot, but this idea of "native on-chain execution" is actually very core to our DNA.

I believe spot trading is a particularly good validation scenario. When all the pieces are in place—performance, order book, user experience, liquidity—users are actually more willing to trade in a way that is consistent with the technical logic of the cryptocurrency itself.

Most people trade spot crypto assets because they believe in the vision of crypto and DeFi. And after many years, we can finally, without sacrificing user experience, trade our own assets in a fully on-chain manner, which feels a bit like closing a loop.

From the idealistic vision to actual implementation, and back to the original peer-to-peer idea—this is a feeling of "coming full circle." I think this is very cool.

About Early-stage Entrepreneurship, Non-linear Financial Vernacular, and On-chain Financial System

Jeff's Early Prediction Market Project Failure Experience

Kevin: You previously posted some videos on X, saying that in 2018, the "young Jeff" once did a prediction market project, similar in time to Kalshi. Why didn't it succeed at that time?

Jeff: There are many reasons. The simplest and most honest answer is—we weren't ready at that time.

The idea itself was actually very cool. From an infrastructure perspective, we had many right directions at that time, such as using off-chain matching and on-chain settlement. Under the technological conditions at that time, that was a reasonable architectural choice.

But truly making a product successful is much more than just having the right idea. In fact, the proportion of the idea in the entire process is very small. Execution, product refinement, market timing, user education, liquidity bootstrapping, mental resilience... all equally important.

It wasn't obvious to me at the time that anyone really wanted to use an on-chain product. At the start of the project, the overall market sentiment was optimistic, the price was rising, and everyone was excited. But by the second half of 2018, the market took a sharp turn, and prices fell significantly.

In the crypto industry, we have since repeatedly witnessed this cycle—during a bull market, users flock in, but during a bear market, almost no one is interested.

But if this was your first time experiencing this cycle, when you try to communicate with users and find that hardly anyone is willing to try your product, that kind of blow is very heavy. Especially when you have invested a lot of time and effort.

Nevertheless, that experience brought a lot of learning. We truly understood what kind of long-term dedication and mindset are required to build a successful financial product.

In a way, that idea did not disappear. There were later some teams that started around the same time as us and persevered, such as Kalshi. They obviously had the conditions and resilience needed to get things done, and now they are beginning to see the results of years of effort and broader mainstream adoption.

Seeing these companies gradually reap the rewards genuinely makes me happy for them. This in itself also shows that many ideas are not necessarily wrong; it's just a matter of whether you are ready to stick with it at the right time and in the right way.

Outcome Markets: A Nonlinear Expression Tool

Kevin: Eight years later, you returned to the prediction market. However, this time it's more accurate to call it Outcome Markets. What is the difference between the two?

Jeff: This goes back to the "primitives" design philosophy we talked about earlier. On Hyperliquid, we want the primitives of the protocol layer to be as small and self-consistent as possible—simple in structure, clear in purpose, but as widely applicable as possible.

The starting point of Outcome Markets is that it will become the core tool for people to express "nonlinear viewpoints" on-chain.

Let's first compare: Spot is the most basic form of asset. You hold the asset, and the transfer is completed on-chain when traded. This is the basic primitive that any financial system should have, undisputed; Perpetuals are relatively more controversial, but more and more people are realizing that its value in price discovery and capital efficiency is important enough to be part of the general financial toolkit. HIP-3 can be seen as a phased realization of this idea.

However, despite the substantial mechanism differences between spot and perpetuals—perpetuals can have leverage and higher capital efficiency; spot represents the tokenization of real assets.

They are similar at a key point: they can only express "linear viewpoints." Whether you use 1x leverage or 100x leverage, fundamentally, as the price moves by one unit, your profit and loss change linearly proportional. For many users, this is already sufficient. However, some users actually want "nonlinear outcomes."

For example: you want a contract outcome to be either $1 or $0, depending on the occurrence of an event (typical binary structure);

You hold Bitcoin, overall bullish in the long term, but want downside protection if the price falls below a certain level;

You want a structure where returns are limited to a specific range. These are all examples of nonlinear views. They cannot be accurately expressed solely through a combination of spot and perpetual. This is where Outcome Markets come in.

Outcome Markets are essentially "fully collateralized contracts." Both parties deposit collateral assets upfront, which are then reallocated between the two based on the outcome. The settlement outcome can be binary or continuous, with the key being the absence of liquidation risk. Users input capital, await the outcome settlement, with no margin calls, margin maintenance rates, funding rates, or other complex mechanisms in between.

Kevin: Like options and prediction markets, are similar examples?

Jeff: Yes, options and prediction markets are the most straightforward examples. They both exhibit nonlinear return structures.

Furthermore, there are some more interesting application directions. For example: Can markets aggregate opinions rather than just trading prices? Can market mechanisms bubble up important topics? Can fund-driven consensus form around a subjective outcome? All of these can naturally fit into the framework of Outcome Markets.

Perpetual contracts will still be an essential price discovery tool, but they belong to a relatively complex financial vernacular, whereas what Outcome Markets offer is a more fundamental, more universal nonlinear expressive capability.

In simple terms: Spot addresses "asset ownership," perpetuals address "linear views + leverage expression," and Outcome Markets address "nonlinear view expression." Together, they form a more comprehensive 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: At its core, it means that the financial system should not be fragmented. That's the "all" part. You shouldn't need to first access a bank account, then have to transfer funds to another account to buy something, or open a new account to participate in a product. Ideally, a user's entire financial life should be able to be conducted in one place. I believe "composability," which integrates a user's financial activities into a unified system, is a significant breakthrough.

However, this is not unique to the crypto industry. What the crypto industry refers to as "housing all of finance" is more importantly about: this platform itself should not be controlled by a centralized company. It should allow many different teams to participate in building. When someone builds a new application or protocol, it should be able to automatically plug into and interact with systems built by other teams. This network effect is what truly constitutes a financial system.

Throughout this process, there is always a trade-off: on one end, a fragmented yet highly composable system, and on the other end, a potentially more efficient but operated by centralized entities and relatively limited in functionality system. There has always been tension between these two.

But if designed correctly, it is possible to find a balance between the two ends—maintaining composability while also considering efficiency. This concept actually drives many of our thoughts in product and system design.

Hyperliquid is Not a Crypto Company, But a Financial Protocol

Kevin: You mentioned to me before that Hyperliquid is not a Crypto company, but a financial company that uses cryptographic technology as underlying infrastructure. Of course, the term "company" may not be entirely accurate either. Could you explain?

Jeff: I think it's a matter of distinction. We truly believe in the values of DeFi. From this perspective, the concepts of crypto and DeFi are ingrained in our DNA.

However, we do not define ourselves as a team that aims to "build the best cryptocurrency trading platform." That is not our vision.

In my view, finance is fundamentally finance. The significance of crypto is that it has the potential to upgrade the underlying "rails" on which people conduct financial activities. In other words, to reconstruct the financial infrastructure using blockchain technology, allowing people to engage in financial activities in a more open, efficient, and transparent system. That is the direction we are building towards.

If the Hyperliquid ecosystem ultimately succeeds, some may say, "This proves that Crypto is right, Crypto has been validated." I think that is a reasonable interpretation.

However, some may also say, "This is a completely new thing that has drawn on some concepts from the crypto space but has ultimately developed into an independent system." I believe this interpretation is equally valid.

The key is not the label - whether it is a "crypto company" - but whether it is truly pushing the upgrade of the financial infrastructure.

USDH Alliance Stablecoin Mechanism

Kevin: The Hyperliquid core team currently has only 11 people, but also boasts an ecosystem composed of the smartest developers and builders in the industry. Let's talk about one of the projects. I noticed you have a stablecoin called USDH, why did you do this?

Jeff: About half a year to a year ago, the entire industry saw a wave of excitement around stablecoins on multiple blockchains. At that time, after the 'Genius Act' passed, the market widely believed that stablecoins would be the gateway for institutional funds to enter the DeFi track for the first time, so there was a lot of interest in stablecoins.

Within the Hyperliquid ecosystem, we proposed a protocol-level concept called the 'Alliance Stablecoin.' This mechanism was not defined from the beginning but was a design reached at the protocol level after multiple discussions with many ecosystem participants.

The core of this design is: the yield behind the stablecoin (such as yield from assets like government bonds) can be allocated between the protocol itself and the stablecoin issuer according to predefined rules. USDH is operated by the Native Markets team, whose team members include founders with a wealth of institutional backgrounds and some very strong ecosystem community builders. I believe they are an excellent team and look forward to them building a truly deeply integrated, aligned stablecoin on Hyperliquid.

These stablecoins have a highly symbiotic relationship with applications and developers within the ecosystem.

For example: the protocol itself can earn yields, so holders of the HYPE token are also aligned with the growth of this stablecoin;

At the same time, users transacting with this stablecoin can enjoy lower fees. All these rules are written into the protocol layer, are entirely objective, automatically executed mechanisms, and not subject to human decisions.

We believe this design creates a very strong synergy and has the potential to unlock a whole new set of applications.

Kinetiq Full-Chain Staking Innovation

Kevin: What is Kinetiq? Why is it important for the