2025 'hundred times' narrative: super applications, order books, on-chain CEX.
Hyperliquid has demonstrated unprecedented explosive power in this round, overshadowing all narratives. Don’t talk about AI narratives; have you seen a project achieve a market cap of over $10 billion in just a few months without VC financing?
This is the objective fact. No matter how you say there are issues with Hyperliquid, the data is right here.
One key point for ‘chives’ to level up is to start respecting facts, abandon the fantasies and biases of the brain. Don’t trust your brain; trust your eyes. If your brain's logic was correct, you would have made money long ago. Why do you always think you are smart, yet you are not making progress in the crypto circle? Because your brain is filled with garbage. Please shovel out the garbage.
The divine is the way; the way is natural, as it comes. The divine is the way, and the way is the law. The law comes without your speculation. Those who act according to the law are divine. Yet most people live their entire lives in their fantasies, trapped in their constructed ‘what they think is the world.’ But the real world is the real world, not subject to your fantasies; otherwise, it will result in a lifetime of internal conflict and hitting walls.
This is the true path of the strong: recognizing oneself, eliminating the garbage in the brain. The only principle for all actions is to respect facts and respect objective laws. Once you hit a wall, admit your mistakes in time, and optimize in time. This is the path of the strong and the path of becoming a god for the ‘chives’ (newbies). This is far more important than investing in any project. You yourself are the best investment in this world.
This is also the most sincere thought I want to share with everyone after the end of 2024. I hope more people walk the path of the strong, the path of becoming a god. You are the center of this world; you are the god. Come on, let’s level up together and conquer this virtual world game.
Returning to the title, from the event of Hyperliquid's rise, I see the environmental background change in the entire crypto circle, mainly in two points:
1. The on-chain infrastructure has matured relatively well. The emergence of L2 and performance chains is sufficient to give birth to super applications, without being restricted by infrastructure performance. This is like a muddy road being upgraded to a cement road. Some super monsters that were limited by the previous cement road finally have the opportunity to show their abilities. Now that it’s a cement road, everyone will show their talents, and various new species that have never been seen before will emerge.
2. On-chain users and liquidity are becoming abundant. An obvious phenomenon and trend is that there are more and more players directly interacting with on-chain applications. If you say you can’t play on-chain, you will be laughed at by everyone. Of course, a large number of new users still enter through CEX, but as blockchain abstraction becomes more common, the experience threshold between on-chain and off-chain will further decrease, and people may not even realize whether they are on-chain or off-chain.
In simple terms, on-chain users and liquidity will only become larger and more abundant. This is the objective fact.
It can be said that the rise of Hyperliquid is inseparable from such background conditions. Even a few years earlier, Hyperliquid's model would have failed outright. The success of a project relies on timing, location, and harmony with people.
Another factor is the order book, which is a game of capital efficiency behind it.
What is an order book? You can take a good look at CEX. The order book is actually the best efficiency model for liquidity. The reason why it didn't work on-chain in the past, and why the AMM pool model was prevalent, is simple: the on-chain environment conditions were insufficient, the infrastructure performance was low, it was laggy and expensive, and on-chain liquidity was insufficient to support the high-efficiency matching requirements of the order book. The AMM pool model just happened to appear during this awkward period on-chain, completing the cold start of on-chain.
The order book becomes stronger when it meets strength. As long as the conditions are met, capital efficiency will increase. The AMM pool model cannot compete with the order book. Do you know what that means?
This means the entire DeFi landscape will be rewritten. All the leading DEXs you see on various chains are either AMM pool models or concentrated liquidity models. Their market shares will all be divided up by order book DEXs. It’s simple: it’s about capital efficiency. The order book represents the highest liquidity capital efficiency. The AMM pool model can only retain a small market share for small tokens. But the problem is, once the order book DEX gets going, it can completely incorporate mechanisms similar to AMM pools into the order book to help small tokens achieve liquidity cold starts. Hyperliquid's HIP-2 has already done this.
Yes, the whole DeFi landscape is about to change.
This is why I insisted on backing EDGEX and Bluefin on the Sui chain last time. EDGEX is stuck in the Ethereum ecological niche, and in terms of user experience, it actually surpasses Hyperliquid. The key is that it hasn’t launched a token yet and is still in the point airdrop phase.
Bluefin is the leading order book on the Sui chain, and its spot order book is about to be released. If nothing unexpected happens, it will directly kill the current leading DEX on the Sui chain, Cetus.
Let’s wait and see.
I have always emphasized that Hyperliquid is an on-chain CEX, not a DEX. Why? Because Hyperliquid is essentially a CEX, just operating in a web3 model. Users’ funds are always under their control, and the experience is already infinitely close to that of a CEX.
This is the terrifying part. That is, Hyperliquid can operate a DEX as powerfully as a CEX, and it costs less. More importantly, it has also put the political power of CEX on-chain. What is political power? It means that Binance’s listing can be insider, can be a friend’s token, and Binance insiders can make countless amounts of money through irregular means. Do you think Binance is only worth the market cap of BNB? I find that amusing.
Hyperliquid has done something very great, which is to redistribute the profit distribution model of past CEX through on-chain methods. For example, Hyperliquid's token listing auctions, no one can cheat, and not even the officials can cheat. The token listing auction is completed on-chain, and the revenue value of the listing can ultimately be returned to HYPE holders.
As for Binance, you have no idea how much value Binance has extracted from listing coins. You don’t even know. The value they can feedback to BNB is entirely based on conscience and perspective.
What is blockchain? It is about removing trust. We don’t rely on conscience and perspective; we only believe in code. Conscience and perspective change over time, but the rules of code do not. Once it’s on-chain, it’s on-chain; any changes must go through community consent.
This is the insight brought by Hyperliquid. This is a revolution, targeting the life of CEX. In the short term, we may not see it, and it may not necessarily be Hyperliquid that completes the final revolution, but this is definitely a trend that will not change based on anyone's will.
In short, this fire has already been lit by Hyperliquid; you only need to know that this fire will grow larger.
Sometimes when I think about it, it’s quite funny. We are all looking for new super applications and new business models, but we forget that exchanges are the largest essential super application in the entire crypto circle. Exchanges are the most profitable business model.
Killing Binance will not be another CEX, but another new species. Clearly, a rough shape of this new species has already emerged.
This is the biggest opportunity of this round. This opportunity is huge enough to accommodate dozens of projects like Hyperliquid, even 100. Think about the previous battle of exchanges. This is just the beginning. The opportunities like Hyperliquid are abundant.
A narrative that can revolutionize CEX, what are you still hesitating about?