On December 5, 2024, 137Labs held a highly anticipated X Space event with the theme of [Hyperliquid Airdrop Effect and Technological Innovation Dual Engine Analysis]. The event invited well-known guests in the field, including Luke, co-founder of Bubbly Finance, Chabusi, a senior member of Hyperliquid, and Xiaozhen Cooking Master, an early participant of Hype, to discuss the latest progress of Hyperliquid in airdrop strategy, technological innovation and decentralized financial ecosystem construction.
During the event, guests had an in-depth discussion around Hyperliquid's core advantages, analyzing how it attracts users through the airdrop effect, drives platform growth, and technological innovations, including the implementation and development of self-built L1 chains and HIP-1 and HIP-2 standards. They also shared Hyperliquid's future potential in decentralized liquidity, financial product expansion, and discussed how the platform can achieve the goal of decentralized exchange industry standards.
This article will take you through this rich discussion, deeply analyze Hyperliquid's airdrop effect, technological innovation and market layout, and provide you with comprehensive insights to help you seize more opportunities in the development of the crypto industry.
Q1
What is Hyperliquid? Have you used it? Please introduce the current development of Hyperliquid. What do you think are the similarities and differences between Hyperliquid and similar products such as Backpack and Dydx?
Luke believes that Hyperliquid stands out from other contract platforms in many aspects. The first is user experience. The smoothness of Hyperliquid is almost the same as that of centralized exchanges, while other platforms often have problems such as insufficient liquidity, high fees, lags, and downtime. He pointed out that Hyperliquid's technology is significantly better.
Secondly, he mentioned that Hyperliquid is one of the contract exchanges with the largest number of supported currencies, which enables it to meet the needs of active users, while other platforms usually support only mainstream assets such as BTC and ETH. For active users, Hyperliquid is therefore a better choice.
Third, Luke emphasized the pragmatic style of the Hyperliquid team. They focus on doing a good job in current contract transactions, gradually evolving to a more decentralized state, and may even become a universal chain in the future. This is different from other platforms such as DYDX, which initially tried to build a complete chain ecosystem but were insufficient in meeting user needs. He believes that the Hyperliquid team is not only pragmatic, but also has a deep understanding of market demand, avoiding blindly pursuing vanity indicators or complete decentralization, but focusing on solving the core pain points of users.
The town cooking master mentioned that he personally used Backpack and DYDX, and believed that Hyperliquid was obviously stronger in terms of product strength. First of all, Backpack was briefly popular due to airdrops and trading volume, but its core team has always promised to launch contract products, but has not yet fulfilled them, which has also allowed Hyperliquid to gradually cover its market share. In contrast, although DYDX is the earliest decentralized perpetual contract platform, its development has stagnated due to the team's arrogance to the community and failure to respond to market demand in a timely manner, especially its public chain plan has not yet been implemented. On this basis, Hyperliquid's advantage lies in its stronger product strength and community interaction. He believes that Hyperliquid can not only carry a larger trading volume and capital demand, but also achieve the ultimate in details, such as its TG Bot function, which is particularly professional and even participates in the market pump. He believes that this meticulous user experience and rapid response to community feedback are the key to Hyperliquid's lead over other platforms. He believes that with the current development momentum, Hyperliquid has the potential to become the next FTX, or even stronger than FTX.
Q2
Why did Hyperliquid's HYPE airdrop become one of the most successful airdrop cases in 2024? Why did the Chinese community pay relatively little attention to the airdrop?
Luke believes that overseas communities have a natural advantage in obtaining project information. Since the official language of overseas projects is English, the speed of information release and dissemination is also faster. KOLs have first-hand information, while Chinese communities usually only have access to second-hand information, so there is a certain information delay. In addition, airdrop participants in overseas communities are closer to the project, and they pay more attention to and participate in airdrops.
Another reason is related to the airdrop strategy. Luke pointed out that Hyperliquid's airdrop strategy is not particularly suitable for Chinese communities that like to "take advantage of the situation". Hyperliquid's airdrop uses a black box points rule, which means that the user's behavior data and the way it is obtained are not public, and the points rules are adjusted frequently. Such a strategy focuses more on real users, rather than speculators who participate simply for the pursuit of airdrop rewards, which contrasts with the "white box" airdrop strategy preferred by many Chinese community users. Chinese communities tend to participate in airdrop activities with simple rules and easy rewards, while Hyperliquid's airdrop strategy is relatively complex and not suitable for users who "take advantage of the situation", resulting in its low popularity in the Chinese community.
The town cooking master believes that the reason why the Chinese community paid less attention to the Hyperliquid airdrop is mainly related to the airdrop atmosphere and market environment in the Chinese-speaking area at that time. There were multiple similar PERP projects at that time, such as AEVO, and some participants failed to obtain professional marketing rates, resulting in losses. The results of subsequent projects, including Backpack, were not satisfactory, and there was even a lot of backlash. In this market environment, users have gradually become tired of PERP projects and believe that the benefits of these projects are not significant, so it is better to invest their energy in other projects. Therefore, although the Chinese community has heard of Hyperliquid, many people have not been deeply involved, resulting in relatively low attention.
Chabusi believes that the reason why Hyperliquid can become one of the most successful airdrop cases in 2024 is that the design of its airdrop rules is very unique and exquisite. Unlike other projects, Hyperliquid's points system is not simple. Users must earn points through real transactions, and these points are not easy to earn. This mechanism screens out a large number of users who just want to "make money", increases the threshold for participation, and ensures that truly active and long-term traders can receive airdrop rewards.
In addition, Chabusi also emphasized the strength of the Hyperliquid community. The project's team attaches great importance to community building and is committed to providing value to real users. Hyperliquid has a very strong community atmosphere and user loyalty is quite high. Through interaction with other traders and the social atmosphere within the platform, community members have established deep connections with each other. This community cohesion has made Hyperliquid's users not only loyal, but also rarely have a large amount of selling pressure after the airdrop. Chabusi also mentioned that during the airdrop, the platform had banned a large number of malicious accounts, thereby ensuring that the airdrop was allocated to real active users, whose airdrop shares were more valuable.
Therefore, Hyperliquid has become the most successful airdrop case, not only because its airdrop rules are well designed, but also because it has established a solid community foundation through the participation of real users, ensuring the long-term value of the airdrop and the stability of the market.
Q3
Previously, Hyperliquid announced that it had not yet accepted any investment. In the announcement of the Genesis event, the Hyperliquid Foundation stated that there was no allocation to private investors, centralized exchanges or market makers in the token distribution. What do you think of Hyperliquid's intention? What are the pros and cons of this behavior?
Luke believes that Hyperliquid's choice not to accept investment and not to distribute tokens to private investors, centralized exchanges or market makers is very bold and admirable. He believes that only truly capable teams can dare to take this approach. In his opinion, many projects in the current market rely on VC funding and support, resulting in extremely high initial valuations of these projects, but the actual product quality and user base may be weak. VC investment often leads to some projects being hyped and funded even if there is no real user demand and product value.
This situation has brought about some unfair phenomena, such as low-cost VC investors and insider traders being able to control most of the tokens and information, making it difficult for ordinary investors to get a fair chance in these projects. Luke believes that this insincere way of operating will alienate users and make it difficult to build loyalty to the product. On the contrary, Hyperliquid has shown its sincerity to users by allocating tokens to real users rather than to VCs and market makers. Luke believes that this approach is not only fair, but also attracts users who really like the product and ensures the long-term healthy development of the project. Users will not easily sell airdropped tokens because they truly recognize the product.
The town cooking master believes that Hyperliquid's choice not to accept investment and not needing VC funds is one of the core advantages of the project. This self-sufficient approach allows the project to break away from the influence of external financing and maintain greater independence and transparency. For this reason, Hyperliquid has adopted the approach that best meets the needs of current blockchain players in the market - emphasizing liquidity rather than relying on VC funds and traditional hype methods.
He further explained that blockchain players generally do not like "VC capital projects", that is, projects controlled by venture capital, but prefer "open scheme projects", that is, open and transparent, clearly telling users that they have funds and sufficient liquidity, and users only need to participate in transactions instead of passively waiting. Hyperliquid adopts this strategy, emphasizing that liquidity is above all else, and that pulling the price is better than all PR and marketing.
However, he also pointed out the potential drawbacks of this approach. Since Hyperliquid's token distribution is not tilted towards VCs or market makers, all benefits are basically returned to participating users. This means that some investors who have already taken the first-mover advantage may feel that their interests are damaged, especially those vested interests who cannot participate at a lower price. Therefore, although this is a relatively fair environment for ordinary retail investors, investors who fail to participate may be dissatisfied.
Q4
Some KOLs said that Hyperliquid is the best airdrop of the year compared to those airdrops that raised a lot of money but designed complicated rules and user games. Some users also said that HYPE is currently just a stand-alone coin and can only be traded on Hyperliquid. What do you think of this view? Why is $HYPE, which is so popular, not listed on centralized exchanges?
Luke pointed out that although Hyperliquid's on-chain functions have not been fully disclosed and its public documentation is relatively limited, he is positive about Hyperliquid's potential in the future. Although Hyperliquid is currently a "stand-alone coin", this does not affect its long-term development and user experience. He believes that Hyperliquid meets the needs of the current market by introducing something like HLP. This design allows users to earn income by simply storing assets without having to understand complex traditional DeFi mechanisms such as Uni V2 and impermanent loss. This design can attract users who prefer to put their funds into the protocol and enjoy passive income without too much intervention.
In addition, Luke emphasized the future potential of Hyperliquid's EVM-compatible chain, pointing out that compared with other EVM chains, Hyperliquid's perpetual data access function will provide richer use cases for new DeFi protocols, especially in terms of enabling other protocols to access perpetual contract data, positions and other information, which provides an opportunity to develop more interesting and innovative DeFi protocols.
Chabusi pointed out that the reason Hyperliquid chose not to list on centralized exchanges was mainly to maintain control over the tokens and avoid handing over liquidity and control to these platforms. He mentioned that the team had explicitly rejected the proposal to cooperate with centralized exchanges before TGE, with the aim of encouraging users to trade directly on Hyperliquid's platform rather than through centralized exchanges. This approach not only ensures the liquidity and trading activity of the platform, but also avoids premature division of shares to CEX.
In addition, Chabusi also believes that this move reflects an important trend of change in the blockchain industry, that is, more and more projects choose to avoid centralized exchanges and directly serve users in a decentralized way. He believes that this choice means that the team is more willing to distribute the value and share of tokens to real users rather than handing them over to centralized platforms, thereby ensuring the healthy development and sense of participation of the community.
The town cooking master mentioned that one of the important reasons why Hyperliquid has not been listed on a centralized exchange is because its EVM chain has not yet been launched. If the token is listed on an exchange at this time, there may be risks and uncertainties. Once the EVM chain is online, all exchanges can trade tokens, which can ensure its liquidity and smooth transactions.
Regarding those who believe that HYPE is currently just a "stand-alone coin", the town cooking master said that this view seems too one-sided and negative. He believes that the term "stand-alone coin" is inaccurate because users can not only trade on the Hyperliquid platform, but also easily withdraw funds, transfer funds to centralized exchanges such as Binance, and even exchange them for legal currency. Therefore, although the HYPE token is not currently circulated on external exchanges, users can still complete the deposit and withdrawal operations of funds within the platform.
Q5
Hyperliquid's focus on technical performance and decentralized liquidity is mainly on building its own L1 chain, as well as HIP-1 and HIP-2 standards. What do you think are the highlights of Hyperliquid's technology? Will this develop into an industry standard for DEX? What are the points worth noting in terms of security?
Chabusi mentioned that the HLP-1 standard is a protocol designed by Hyperliquid to ensure that users can deploy tokens on its chain without approval. This means that users can issue tokens on the platform, but they must obtain a quota for issuance by participating in a Dutch auction. The auction time is limited to 31 hours, and participants must bid during this period. If they successfully obtain a token issuance quota, they can issue tokens on Hyperliquid. If the bid fails, the token cannot be issued. This mechanism is designed to prevent the problem of excessive issuance of tokens, ensure that only high-quality projects or projects with sufficient funds can go online, and avoid the phenomenon of a large number of junk tokens on the chain.
Secondly, the HLP-2 standard focuses on ensuring liquidity. Once a user injects liquidity into Hyperliquid, it cannot be withdrawn. This means that unlike some other flexible liquidity pools on the chain, the liquidity pool deployed on Hyperliquid will be irreversible after injection. This design not only limits the risk of liquidity being arbitrarily withdrawn, but also enhances the stability and long-term nature of the liquidity pool.
As for whether Hyperliquid can develop into the standard of the DEX industry, Chabusi believes that it has set an excellent benchmark for future decentralized exchanges. As more and more centralized exchange users turn to decentralized exchanges, Hyperliquid's innovation and user experience have become a goal that other DEXs must catch up with. Whether from the perspective of user airdrops, interactive experience, or liquidity management and token issuance standards, Hyperliquid has set a high standard. If other DEXs want to attract more users and market attention, they must learn and draw on Hyperliquid's model.
Luke mentioned that Hyperliquid's technical highlight lies in its simplified user experience and liquidity management. Users only need to sign a message once to log in, and subsequent operations do not require repeated signatures, which lowers the threshold for use. However, if users install unsafe plug-ins or software, it may lead to key leakage, thus posing security risks. Therefore, users need to avoid installing untrusted plug-ins.
In terms of chain security, since Hyperliquid's L1 chain has not yet been made public, it has limitations in data parsing and consensus mechanisms. Currently, node data parsing cannot meet the security requirements of exchanges, which is one of the reasons why $HYPE has not yet been listed on centralized exchanges. The security of the platform is still in its early stages, similar to the early Solana, which relies on a small number of nodes to run. Although it has the potential for decentralization, it has not yet been fully realized.
Nevertheless, Luke believes that the size of the fund itself is a security endorsement. Hyperliquid's TVL is very large, which gives users more confidence in the security of the platform.
The Town Cooking Master believes that the security issues of Hyperliquid will continue to improve as the platform develops. Currently, the platform is in its early stages and there may be problems with node centralization. In the future, the platform may introduce more independent nodes to participate in consensus, thereby increasing the degree of decentralization of the network.
Q6
Founder Jeff once said that Hyperliquid's short-term focus is to continue to grow users, transaction volume and market share. DeFi is still small and needs to unlock real capital. Hyperliquid has solved many technical problems, but there are still difficulties in getting users to try. The long-term goal is to build Hyperliquid L1 into a platform for financial activities, including banks. Do you think it has potential, and what else needs to be supplemented?
Luke believes that Hyperliquid's long-term vision is very similar to Solana's goal, both starting from a specific scenario and gradually expanding to a wider range of financial activities. Hyperliquid initially focused on trading platforms, but its founder Jeff's goal is clearly to build an ecosystem that covers all types of financial activities, which coincides with the early vision of the blockchain industry, similar to how Bitcoin first allowed money to exist on the Internet in the form of data. Luke emphasized that this vision is very clear and revolves around the financial field.
He believes that Hyperliquid's strength lies in its excellent performance in specific implementation. For example, the recently launched Builder Codes mechanism allows other front-ends to access Hyperliquid's liquidity and provide rebate rewards, which is different from traditional centralized exchanges. Hyperliquid provides a completely open network that any developer or platform can build on and enjoy the benefits of liquidity without dependencies or VIP permissions.
Luke believes that Hyperliquid's liquidity has surpassed many second-tier exchanges, which is a solid foundation for its future expansion. He mentioned that if more DeFi protocols can be introduced on Hyperliquid's EVM in the future, it may bring it greater development opportunities. Although Hyperliquid has built a very strong foundation, Luke also pointed out that there is still a gap between its user base and traditional DeFi users. How to combine Hyperliquid's product features, user base and its technical characteristics is a challenge facing its team.
Chabusi emphasized the difference between Hyperliquid and other blockchain ecosystems. He believes that most of the current projects on Hyperliquid are driven by the community itself, rather than introduced by external teams or VCs. This is in stark contrast to the approach of other ecosystems, as many projects often rely on external funding and teamwork to start and develop.
Chabusi pointed out that the native projects on Hyperliquid, especially the community members who decided to build on the platform before receiving the short rewards, showed strong spontaneity and determination. He believes that the self-sufficiency of community members and their support for decentralized culture make these projects more independent and sustainable.
He also mentioned that many community members rely on community support and their own start-up funds to carry out projects without external funding. This approach not only enhances the cohesion of the community, but also promotes the concept of decentralization. He pointed out that Hyperliquid's culture tends to be "no VC", that is, avoiding the intervention of external investors, but relying on the power of the community to promote the development of the platform.
The Town Cooking Master pointed out that Hyperliquid’s vision has similarities with the goals of public chains such as Solana, but Hyperliquid has the potential to develop into a more financialized ecosystem in the future, but some key functions need to be added, especially in terms of fiat currency payments and stablecoin support.
He mentioned that Hyperliquid's current payment method only supports depositing USDC, which makes it somewhat limited in its connection with traditional finance. In order to better realize its vision, Hyperliquid may need to establish a partnership with legal currency payment channels to support more methods such as legal currency exchange and circulation. Such cooperation will enable users to convert directly from legal currency to cryptocurrency without going through traditional exchanges.
Conclusion
Through the in-depth discussion at X Space, guests analyzed Hyperliquid's unique advantages in airdrop effect and technological innovation from multiple dimensions, as well as its development potential in the decentralized financial ecosystem. Whether it is promoting liquidity management through the HLP standard or promoting platform decentralization with the help of self-built L1 chain, Hyperliquid has demonstrated strong technical driving force and market development capabilities. As the DeFi ecosystem continues to grow, the further development of the platform will bring more opportunities and challenges to the industry. In this rapidly evolving crypto world, embracing innovative technologies, focusing on user needs, and promoting sustainable growth on a solid foundation will be the key to project success.
The article is for sharing and communication only and does not constitute investment advice.
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