Interview: When Shift Happens
Compiled by: Yuliya, PANews
(When Shift Happens) Previous interviews featured 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 content of the interview, covering aspects such as the project's technological innovations, operational models, user experience improvements, and also discussing the trends and challenges in the cryptocurrency industry.
Entrepreneurial journey
Host: Jeff, can you tell us how you embarked on the entrepreneurial path?
Jeff: This dates back to early 2020. At that time, I started researching some simple trading scripts, mainly focusing on centralized cryptocurrency exchanges (CEX). Although many large market makers had already entered the market, sometimes 'ignorance is bliss,' and I thought I'd 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 to achieve my goals, I started teaching myself programming. By 2022, we had developed into one of the largest traders on many trading venues, 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 started 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 has instead created many opportunities for quantitative strategies.
Secondly, the collapse of FTX was an important turning point. This incident made people realize that they cannot blindly trust centralized exchanges. This is not an abstract theoretical discussion, but a tangible loss of funds. For us, this was an important revelation— the world is finally ready to embrace real DeFi.
Product concept
Host: Can you explain in simple terms what Hyperliquid actually does?
Jeff: From the perspective of human history, society has always been moving towards individualism. Every advancement towards individualism, human rights, and so on has, in terms of results, been positive, whether measured by GDP or happiness.
Hyperliquid continues to push in this direction: from originally needing weapons to protect one's farm, to later being able to deposit money in a bank, and now to Hyperliquid—where you can fully control your funds through cryptographic technology.
Specifically, we are building a system that can:
Meet users' expectations for Web2 finance
Provide low fees
Support fast transfers
Achieve instant settlement
Provide liquidity comparable to centralized exchanges
Allow trustless integration with other applications
Support collateralized lending
Empower users to truly use their funds freely
Financing strategy
Host: Why did you choose not to accept any investments? This is rare in the industry.
Jeff: This is indeed not a traditional business project. This might be the first time in the DeFi or even the entire cryptocurrency space that this has been done, but if we look at the case of Amazon, Bezos also did not profit from it for a long time in the early days.
There are several deep reasons for us to do this:
The cryptocurrency industry places too much emphasis on short-term interests
If we want to create new financial methods, allowing VCs to hold 50% of the network share from the early stages will always be a blemish.
Our team has the ability to operate without external funding, which allows 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 often involve issuing fraudulent tokens. Very few projects genuinely follow a user-centric model because acquiring real users is indeed very difficult. Most projects take shortcuts: first attracting investments from large market makers, then drawing in 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 of reinventing the financial system. Finance is one of humanity's greatest inventions, it allows us to:
Represent value in a more abstract way
Achieve better capital allocation
Establish a complete economic system
Without these, all other advancements may be unattainable. Human society might still be stuck in the agricultural or even foraging and hunting stages.
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: Could you elaborate on the concept of Builder Codes?
Jeff: This 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 deposit channels
Developers can:
Build your own exchange business
Use our neutral backend
Charge fees in a user-trusted manner
Earn 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, enabling 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 Prospects
Host: How do you view the long-term development of the project?
Jeff: I like to use Go and Chess as metaphors. You do not need to be completely certain of where you want to end up, but you have to ensure that each step is in the right direction. What's important is to execute each step well, rather than becoming overly fixated on a distant endpoint. That is 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 thing. We focus on building infrastructure that will play a significant role regardless of how the future develops:
Builder Codes system
EVM integrated with on-chain native components
Sustainable high-quality liquidity
These are all difficult but essential infrastructures, and I believe that regardless of how cryptocurrency develops in 10 years, they will remain indispensable cornerstones.