Interview: When Shift Happens
Compiled by: Yuliya, PANews
(When Shift Happens) Previously, we interviewed Jeff, the founder of Hyperliquid Labs. Hyperliquid is a decentralized perpetual contract trading platform and also a Layer 1 project. In a one-hour conversation, Jeff shared his entrepreneurial journey, project vision, and observations on the DeFi industry. PANews compiled the interview content, covering aspects such as the project's technological innovations, operational model, and user experience improvements, while also discussing the development trends and challenges in the cryptocurrency industry.
Entrepreneurial Journey
Host: Jeff, can you tell us how you got on the path of entrepreneurship?
Jeff: It all started in early 2020. At that time, I began researching some simple trading scripts, primarily focusing on centralized cryptocurrency exchanges (CEX). Although many large market makers had already entered the scene, sometimes 'ignorance is bliss' can be a good thing. I thought I would try to see if I could make some money.
The initial research results were promising, so I decided to take this seriously. To be honest, I wasn't very good at coding before, but to achieve my goals, I started teaching myself programming. By 2022, we had grown to become one of the largest traders across many exchanges, possibly the best in high-frequency market making.
Host: What prompted you to shift from successful quantitative trading to creating Hyperliquid?
Jeff: There are mainly two reasons:
First, we began focusing on the DeFi space and discovered many interesting protocol designs. There is an interesting phenomenon in DeFi: many people who do not understand finance are trying to build financial systems, which in turn creates many opportunities for quantitative strategies.
Second, the collapse of FTX was a critical turning point. This incident made people realize they cannot blindly trust centralized exchanges. This is not an abstract theoretical discussion but rather a tangible loss of funds. For us, this was an important revelation— the world is finally ready to accept true DeFi.
Product Philosophy
Host: Can you explain in simple terms what Hyperliquid does?
Jeff: From a historical perspective, society has been moving towards individualism. Every advancement toward individualism and human rights has been positive in outcome, whether measured by GDP or happiness.
Hyperliquid is continuing to push in this direction: from needing to protect one’s farm with weapons, to being able to store money in a bank, to now Hyperliquid—where you can fully control your funds through cryptographic technology.
Specifically, we are building a system that can:
Meeting users' expectations for Web2 finance
Providing low fees
Supporting fast transfers
Achieving instant settlement
Providing liquidity comparable to centralized exchanges
Allowing trustless integration with other applications
Supporting collateralized lending
Enabling users to truly use their funds freely
Funding Strategy
Host: Why choose not to accept any investments? This is rare in the industry.
Jeff: This is definitely not a traditional business project. This may be the first time in DeFi or even the entire cryptocurrency space that this has been done, but if you look at the example of Amazon, Bezos didn't profit from it for a long time in the early stages.
There are several deep reasons why we do this:
The cryptocurrency industry places too much emphasis on short-term gains
If we want to create a new financial model, having VCs hold 50% of the network share in the early stages would be a permanent stain
Our team has the ability to operate without relying on external funding, which allows us to stick to this decision
Industry Perspectives
Host: Do you have any criticisms of the current cryptocurrency industry?
Jeff: To be honest, the most 'successful' products in the industry are often those that issue fraudulent tokens. Very few projects truly follow a user-first model because acquiring real users is indeed very challenging. Most projects take shortcuts: first, they gain investments from large market makers, then attract trading through incentive programs. This model is unsustainable in the long run.
Host: How do you view the current state of the cryptocurrency industry?
Jeff: Although many people see cryptocurrency as a failed experiment, I believe it is humanity's only hope to reinvent the financial system. Finance is one of humanity's greatest inventions, allowing us to:
Representing value in a more abstract way
Achieving better capital allocation
Establishing a complete economic system
Without these, all other progress may not be achievable. Human society might still be in the agricultural or even hunting-gathering stage.
Software should fundamentally transform finance, but the reality is that finance (and possibly healthcare) is one of the few large industries that has not undergone substantial innovation.
Technological Innovation
Host: Can you elaborate on the concept of Builder Codes?
Jeff: This is a simple yet powerful concept. It allows anyone to build financial applications on top of Hyperliquid, such as:
Innovative Mobile Wallet
Social Trading Platform
Regional Exchanges
Fiat Deposit Channels
Developers can:
Building your own exchange business
Using our neutral backend
Charging fees in a user-trustworthy manner
Directly earning income at the protocol level, rather than relying on private agreements with centralized exchanges
This will open up a new way to build businesses in DeFi, allowing for specialization. Those who understand the specific needs of users in certain regions can focus on serving those users, while Hyperliquid provides support in the background.
Future Outlook
Host: How do you view the long-term development of the project?
Jeff: I like to use Go and Chess as metaphors. You don't need to be completely sure where you want to end up, but you need to ensure that each step is in the right direction. The important thing is to execute each step well, rather than being overly fixated on a distant endpoint. That's why we focus more on building infrastructure rather than short-term market performance.
Host: What is Hyperliquid's long-term vision?
Jeff: Our core philosophy is:
Cryptocurrency will change the way finance operates
Traditional finance will eventually migrate to cryptocurrency
Hyperliquid will become the foundational platform for these financial activities
The specific path to implementation is hard to predict, but that is not the most important thing. We focus on building infrastructures that will play a crucial role regardless of how the future develops:
Builder Codes System
EVM integrated with on-chain native components
Sustainable high-quality liquidity
These are essential infrastructures that are hard to get right, and I believe that regardless of how cryptocurrency develops in 10 years, they will remain indispensable cornerstones.