Written by: CM

Why @HyperliquidX is more successful than other Perps is the most discussed topic today. Sharing from personal experience about $HYPE, a continuous thread 🧵

1. From a technical mechanism perspective

The key here is actually the Vault. This mechanism exists on GMX and Jupiter, but Hyperliquid's Vault is an evolved version, featuring Protocol Vaults (HLP) and User Vaults, opening the door to diversification.

At the same time, the emergence of diversified Vaults has addressed the liquidity issue of long-tail assets, and trading long-tail assets is the core competitiveness of Perps DEXs against CEXs, which is a problem many competitors are still exploring solutions for.

Next is the composability of being a chain, which skips the transition process from Protocol to Chain and goes straight to the finals, opening up space in both valuation and imagination.

2. From a market perspective

Here are a few bonus points worth learning from for many projects.

(1) Not seeking financing, not pursuing large exchanges, and not deliberately spending money on advertising, taking a bottom-up approach is easier to gain favor in this market cycle.

(2) Generous with airdrops.

(3) No PUA; although there were controversies about score dilution in earlier stages, overall it is clean and straightforward, without going back and forth on tasks, and avoiding the endless loop of completing tasks and dealing with NFTs.

(4) Positioned on the basis of 'chain', providing imaginative and valuation space. Hyperliquid is essentially a chain, allowing for the construction of various combinations of DeFi and Perps, such as stablecoins, lending, etc. This has led to a phenomenon where initially everyone compared the valuations of some Perps DEXs with $HYPE, but slowly realized it was inaccurate, starting to compare it with public chains. This alternative sense of upward breakthrough further fueled market sentiment.

(5) Positioned as 'on-chain Binance', it has garnered a lot of attention because DEXs, lending, stablecoins, and other DeFi protocols have almost all secured their place in the market, while only the Perps track is still struggling. This also meets the expectation of the last puzzle piece in DeFi.

Summary

The market is uncontrollable; timing, location, and human factors are difficult to replicate. The technical mechanism, however, is certain. At present, there are no significant technological innovations on the horizon. Vaults for Perps are analogous to AMMs for DEXs, and dYdX has recently introduced Vaults as well. In the future, more micro-innovations may roll out various forms of Vaults, and the success of this mechanism has solidified the position of Perps, which may no longer be the once-promising vase that couldn't develop.