Interview: When Shift Happens
Compiled by: Yuliya, PANews
(When Shift Happens) The previous interview invited Jeff, the founder of Hyperliquid Labs. Hyperliquid is a decentralized perpetual contract trading platform and also a Layer 1 project. In an hour-long 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, as well as discussing development trends and challenges in the cryptocurrency industry.
Entrepreneurial journey
Host: Jeff, can you share how you started your entrepreneurial journey?
Jeff: This starts from early 2020. At that time, I began to study some simple trading scripts, mainly focused on centralized cryptocurrency exchanges (CEX). Although many large market makers had already entered, sometimes 'ignorance is bliss' can actually be a good thing. I thought I would give it a 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 in order to achieve my goals, I started to self-learn programming. By 2022, we had grown to become one of the largest traders in many trading venues, possibly one of the best in high-frequency market making.
Host: What prompted you to shift from successful quantitative trading to creating Hyperliquid?
Jeff: There are two main reasons:
First, we began to focus 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 ironically provides many opportunities for quantitative strategies.
Secondly, the collapse of FTX was an important turning point. This event made people realize that blind trust in centralized exchanges is not possible. This is not an abstract theoretical discussion, but real monetary loss. 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 actually does?
Jeff: From a historical perspective, society has been developing towards individualism. Every progress towards individualism and human rights has been positive, whether measured by GDP or happiness.
Hyperliquid is continuing to push in this direction: from needing to protect your farm with weapons in the early days, to being able to store money in a bank, to now with Hyperliquid—you can fully control your funds through cryptography.
Specifically, we are building a system that can:
Meet all user expectations for Web2 finance
Provide low fees
Support fast transfers
Achieve instant settlement
Offer liquidity comparable to centralized exchanges
Allow trustless integration with other applications
Support collateralized lending
Enable users to truly use their funds freely
Financing strategy
Host: Why choose not to accept any investments? This is rare in the industry.
Jeff: This is indeed not a traditional commercial 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 also did not profit for a long time in the early days.
There are several deep reasons why we do this:
The cryptocurrency industry places too much emphasis on short-term gains
Creating a new financial model where VCs hold 50% of the network share early on would be a permanent stain
Our team is capable of not relying on external financing, allowing us to stick to this decision
Industry perspective
Host: Do you have any criticisms of the current cryptocurrency industry?
Jeff: To be honest, the most 'successful' products in the industry right now are often those that issue fraudulent tokens. Very few projects truly follow a user-centric model because acquiring real users is indeed very difficult. Most projects take shortcuts: first getting investments from large market makers, then attracting trades through incentive programs. This model is unsustainable in the long run.
Host: How do you view the current state of the cryptocurrency industry?
Jeff: While 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:
Represent value in a more abstract way
Achieve better capital allocation
Establish a complete economic system
Without these, all other progress may not be achievable. Human society might still be at the stage of agriculture or even foraging and hunting.
Software should be able to fundamentally change 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: It is a simple but powerful concept. It allows anyone to build financial applications on top of Hyperliquid, such as:
Innovative mobile wallet
Social trading platform
Regional exchanges
Fiat currency deposit channels
Developers can:
Build your own exchange business
Use our neutral backend
Charge fees in a way that users trust
Generate revenue directly 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 specialization to become possible. Those who understand the needs of users in specific regions can focus on serving these 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're going, but you need to ensure that every step is in the right direction. The important thing is to take each step well, rather than obsessing over 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 implementation path is hard to predict, but that is not the most important. We focus on building infrastructure that will play an important role no matter how the future develops:
Builder Codes system
EVM integrated with on-chain native components
Sustainable high-quality liquidity
These are all essential infrastructures that are difficult to do well, and I believe regardless of how cryptocurrency develops in 10 years, they will be indispensable cornerstones.