Hyperliquid: A Deep Dive Into the New DeFi Unicorn

At the end of 2024, transitioning into the beginning of 2025, a remarkable asset has caught the attention of the crypto world. In just a few days, it surged from an opening price of $2 to a high of $35.2, achieving a 1610% increase.

At the end of 2024, a new project in the crypto world quickly attracted attention. In just a few days, the price of its token soared from $2 to a high of $35.2, achieving a 1610% increase. Its airdrop scale was also enormous, even surpassing Uniswap's airdrop record at one point, with an average airdrop of $28,500 per person and a TVL exceeding $2.5 billion. It can be described as a luxurious feast amidst the dead silence of yield farming sentiment in Arbitrum, Optimism, GMX, KiloEx, and other incentive mechanisms. Yes, it is $HYPE.

First, let's clarify what Hyperliquid aims to do

In simple terms: Hyperliquid is a native high-concurrency L1 DeFi public chain, and its most notable product is Hyperliquid DEX, which is a comprehensive decentralized order book exchange (perp DEX) that includes contract trading, spot trading, and its own ecosystem MEME TOKENs (like purr). Therefore, it has been dubbed "the Binance on-chain" by the market. Unlike CEX, Hyperliquid's order flow, token value (oracles), and trading are all executed on its own L1, rather than on centralized servers.

Hyperliquid's consensus algorithm is Tindermint. Although Tindermint is rarely heard of, Cosmos has long been using the Tindermint algorithm. However, the Hyperliquid team has made deeper improvements to the Tindermint algorithm: end-to-end latency is 0.2 seconds, with a high throughput of 20K OPS/S. Every order, cancellation, trade, and settlement is transparently conducted on-chain, with block delays of less than 1 second. The chain currently supports 100,000 orders per second. This further lays the foundation for high-frequency, low-energy, and high-efficiency DeFi!

In summary: Hyperliquid is a native high-performance EVM L1 that can build all general ecosystems and continuously address the liquidity bottlenecks in DeFi and improve capital efficiency as a public chain protocol.

Why does Hyperliquid have the confidence to become the new DeFi unicorn?

1. The founding team has a strong professional quantitative background

The core founder of Hyperliquid is Jeff (@chameleon_jeff), who comes from Hudson River Trading, a top 15 global high-frequency quantitative firm, deeply engaged in market-making in the crypto space as a seasoned trader. More importantly, the HLP of Hyperliquid is customized by the team itself rather than through the protocol, and the combination of experience and practical operation can better adapt to changes in market liquidity.

2. Hyperliquid is a one-stop ecological expressway, solving the bottleneck of launching protocols

Hyperliquid has the HIP-1 native token protocol and the HIP-2 liquidity solution, which means users can issue tokens through HIP-1 while enjoying the market-making benefits brought by HIP-2.

So someone might ask: Isn't this the same as Pump.FUN?

What I want to say is that there is a fundamental difference. As mentioned in the previous article about Pump.FUN, when the tokens launched on Pump.FUN reach 85 SOL (about $69,000 market value), they will migrate to Raydium to establish liquidity. Essentially, Pump.FUN is merely a launch protocol that carries the initial trading scenario, ultimately passing the market-making responsibility to Raydium. However, Hyperliquid is a complete decentralized exchange combination. After users deploy tokens using HIP-1, they directly enjoy the liquidity solution of HIP-2, and the liquidity solution is based on market-making strategies customized by the Hyperliquid team, with the market-making responsibility still resting on Hyperliquid. A team with deep market-making experience can often bring many surprising solutions for liquidity without being constrained by the protocol itself.

3. Aligning with the current Web3 sovereignty ideology

Hyperliquid's current development behavior aligns very well with the market sentiment of this round of Web3:

① No VC and financing - The community does not need to worry about investors interfering with the future value space.

② Huge narrative, huge imagination space - Hyperliquid is currently labeled as contract trading, spot trading, MEME, and public chain, with each narrative capable of generating significant discussion, now combined into a single project.

③ The team is not short of funds - The quantitative background of the team itself can create diversified protocol revenue, not just a quick-fix project.

④ Positive data - The current TVL exceeds $2.5 billion, with a market cap over $8.7 billion, and even after the airdrop, there has been no significant drop.

⑤ Essentially solving liquidity issues - Technology, HIP protocols, and genuinely addressing current problems and seeing practical implementations.

⑥ Diverse ways to make money - Vaults follow institutions or DAOs to earn