Interview: When Shift Happens
Organized and compiled by: Yuliya, PANews
(When Shift Happens) Previously, the 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 innovation, operational model, user experience improvement, and also exploring trends and challenges in the cryptocurrency industry.
Entrepreneurial journey
Host: Jeff, can you tell us how you got on the path of entrepreneurship?
Jeff: This dates back to early 2020. At that time, I started 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 give it a try to see if I could make some money.
The initial research results were very 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 self-learning programming. By 2022, we had grown to become 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 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 has actually created many opportunities for quantitative strategies.
Secondly, the collapse of FTX was a significant turning point. This incident made people vividly realize that they cannot blindly trust centralized exchanges. This is not an abstract theoretical discussion, but a very real loss of funds. For us, this is an important revelation - the world is finally ready to embrace true DeFi.
Product philosophy
Host: Can you explain in simple terms what exactly Hyperliquid does?
Jeff: From the perspective of human history, society has been evolving towards individualism. Every step forward towards individualism and human rights has been positive in results, whether measured by GDP or happiness levels.
Hyperliquid is continuing to push in this direction: from needing weapons to protect one's farm, to later being able to deposit money in banks, to now with Hyperliquid - you can fully control your funds through cryptography.
Specifically, we are building a system that can:
· Meet all user expectations regarding 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 borrowing
· Allow 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 business project. This might be the first time in DeFi or even the entire cryptocurrency space that this has been done, but if we look at Amazon’s example, Bezos also took a long time to profit in the early days.
There are several deep reasons for our approach:
· The cryptocurrency industry places too much emphasis on short-term gains
· If new financial methods are to be created, having VC hold 50% of the network share in the early stages would always be a stain
· Our team is capable of operating without external financing, 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. Few projects genuinely follow a user-centric model because acquiring real users is indeed very difficult. Most projects take shortcuts: first attracting investment from large market makers, then incentivizing trading. This model is unsustainable in the long run.
Host: How do you view the current state of the cryptocurrency industry?
Jeff: While many people view 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, enabling us to:
· Represent value in a more abstract way
· Achieve better capital allocation
· Establish a complete economic system
Without these, all other progress may be unattainable. Human society might still be stuck in an agricultural or even foraging and hunting stage.
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 yet powerful concept. It allows anyone to build financial applications on top of Hyperliquid, such as:
· Innovative mobile wallet
· Social trading platforms
· Regional exchanges
· Fiat deposit channels
Developers can:
· Build your own exchange business
· Use our neutral backend
· Charge fees in a way that earns users' trust
· Earn income 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 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 a metaphor. You don't need to be completely certain of where you ultimately want to go, but you must ensure each step is in the right direction. What matters is to do well with every step, 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 implementation path is hard to predict, but that is not the most important thing. We focus on building infrastructure that will play an important role regardless of how things develop in the future:
· Builder Codes system
· EVM integrated with on-chain native components
· Sustainable high-quality liquidity
These are all essential infrastructures that are difficult to get right, and I believe that regardless of how cryptocurrency evolves in 10 years, they will be indispensable cornerstones.
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