With an FDV exceeding $9 billion and widespread praise from the community, why has Hyperliquid succeeded?

Article source: Chen Mo cmDeFi

Author: CM

The discussion about why @HyperliquidX is more successful than other Perps is the most talked-about topic today. From personal experience, let's talk about $HYPE, is it a one-stop shot?

1. Technical Mechanism Perspective

The mechanism here is actually the Vault, which exists in GMX and Jupiter, but Hyperliquid's Vault is an evolved version, with Protocol Vaults (HLP) and User Vaults, opening the door to diversification.

At the same time, the emergence of diversified Vaults has also solved the liquidity problem of long-tail assets. The trading of long-tail assets is the core competitiveness of Perps DEX against CEX, and it is also a problem many competitors have been exploring to solve.

Then there's the composability as a chain, which directly skips the process from Protocol to Chain, reaching the final circle, opening up space in both valuation and imagination.

2. Market Perspective

Here are a few points that add value; in fact, they are worth learning from many projects.

(1) Not seeking financing, not pursuing major exchanges, and not deliberately spending money on advertising; taking a bottom-up approach is easier to gain goodwill in this market cycle.

(2) Very generous with airdrops.

(3) Not using PUA. Although there were some controversies about dilution of scores in the early stages, overall it is clean and straightforward, without endlessly repeating tasks or engaging in infinite loops of completing tasks and NFTs.

(4) Positioned based on 'chains', providing a space for imagination and valuation. Hyperliquid is actually a chain, so various DeFi and Perps combinations can be built on it, such as stablecoins, lending, etc. This has led to a phenomenon where initially people compared the valuations of some Perps DEX with $HYPE, but gradually felt it was wrong and began to compare it with public chains. This alternative sense of breakthrough further drove market sentiment.

(5) Positioned as 'on-chain Binance', it's very topical, as DEX, lending, stablecoins, and other DeFi protocols have basically all secured a place in the market, with only the Perps track still struggling, which also meets the expectations for the last piece of the DeFi puzzle.

Summary

The market is uncontrollable, and factors like timing, location, and people are hard to replicate. The technical mechanism is certain. As of now, without significant technological innovation in the future, Vaults for Perps are equivalent to AMMs for DEXs. dYdX has also recently introduced Vaults, and more micro-innovations may incorporate various forms of Vaults. The success of this mechanism has established the position of Perps, which may no longer be the once-promising vase that just couldn't develop.