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 content of the interview, covering aspects such as technological innovations, operational models, 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: This goes back to early 2020. At that time, I started researching some simple trading scripts, mainly studying centralized cryptocurrency exchanges (CEX). Although many large market makers had already entered the scene, sometimes 'ignorance is bliss', and 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 to achieve my goal, I started teaching myself 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 mainly two reasons:
First, we began by focusing on the DeFi space and discovered many interesting protocol designs. There's an interesting phenomenon in DeFi: many people who don't understand finance are trying to build financial systems, which has actually created many opportunities for quantitative strategies.
Secondly, the collapse of FTX was an important turning point. This event made people realize that they cannot blindly trust centralized exchanges. This is not an abstract theoretical discussion, but a real loss of capital. For us, this was an important revelation – the world is finally ready to embrace true DeFi.
Product concept
Host: Can you explain in simple terms what Hyperliquid does?
Jeff: From the perspective of human history, society has always been developing towards individualism. Every advancement towards 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 weapons to protect your farm in the early days, to being able to keep money in the bank later, to now with Hyperliquid – you can fully control your own funds through cryptographic technology.
Specifically, we are building a system that can:
Meet all 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
Enable users to truly use their own funds freely
Financing strategy
Host: Why choose to not accept any investments? This is rare in the industry.
Jeff: This is not a traditional business project in the conventional sense. This might be the first time in DeFi or even the entire cryptocurrency field that this has been done, but if you look at the example of Amazon, Bezos also did not profit from it for a long time in the early days.
There are several deep reasons for doing this:
The cryptocurrency industry places too much emphasis on short-term gains
If we are to create new financial methods, allowing VCs to hold 50% of the network share early on would be a permanent stain
Our team is capable of not relying on external financing, which allows us to stick to this decision
Industry insights
Host: Do you have any criticisms of the current cryptocurrency industry?
Jeff: To be honest, the most 'successful' products in the industry often involve issuing fraudulent tokens. Very few projects truly follow a user-centric model because acquiring real users is indeed very challenging. Most projects take shortcuts: first obtaining investment from large market makers, then attracting 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: 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:
Express 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 in the agricultural or even foraging and hunting stage.
Software should 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: 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 exchange
Fiat deposit channels
Developers can:
Build your own exchange business
Use our neutral backend
Collect fees in a way that users trust
Generate revenue directly at the protocol level, instead of relying on private agreements with centralized exchanges
This will open up a new way to build businesses in DeFi, making specialization possible. Those who understand the needs of specific regional users can focus on serving them, 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 certain about where you want to end up, but you need to ensure that every step is in the right direction. What matters is to do 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's not the most important thing. We focus on building the infrastructure that will play a crucial role no matter how things develop in the future:
Builder Codes system
EVM integrated with on-chain native components
Sustainable high-quality liquidity
These are difficult but essential infrastructures to get right. I believe that no matter how cryptocurrency evolves in 10 years, they will be indispensable cornerstones.
