Dialogue Hyperliquid: Learn to program by yourself after entering the circle and do not accept VC investment

Interview: When Shift Happens, compiled by Yuliya, PANews

When Shift Happens previously invited Hyperliquid Labs founder Jeff.Hyperliquid is a decentralized perpetual contract trading platform and is also a Layer 1 project.During the one-hour conversation, Jeff shared his entrepreneurial journey, project vision, and observations on the DeFi industry.PANews compiled the interview content, involving the project’s technological innovation, operation model, user experience improvement and other aspects, and also discussed the development trends and challenges of the cryptocurrency industry.

Entrepreneurship history

Host: Jeff, can you tell us about how you embarked on the path of entrepreneurship?

Jeff: This starts from early 2020.At that time, I started to study some simple trading scripts, mainly studying centralized cryptocurrency exchanges (CEXs).Although many large market makers had entered the market at that time, sometimes “ignorant people are fearless” is a good thing.I just wanted to try to make some money.

The initial research results were promising, so I decided to do it seriously.To be honest, I didn’t know much about writing code before, but in order to achieve my goal, I started to learn programming by myself.By 2022, we have grown into one of the largest traders in many trading venues, probably one of the best in high-frequency market making.

Host: What prompted you to move from successful quantitative trading to creating Hyperliquid?

Jeff: There are two main reasons:

First, we began to focus on the DeFi field and discovered a lot of interesting protocol designs.There is an interesting phenomenon in DeFi: many people who don’t understand finance are trying to build financial systems, which actually brings many opportunities to quantitative strategies.

Secondly, the collapse of FTX is an important turning point.This incident made people truly realize that they cannot blindly trust centralized exchanges.This is not an abstract theoretical discussion, but a real loss of funds.For us, this is an important revelation-the world is finally ready to accept real DeFi.

Product concept

Host: Can you explain in plain language what Hyperliquid does?

Jeff: From the perspective of human history, society has been developing towards individualism.Every progress towards individualism, human rights and other directions is positive from the results, whether measured by GDP or happiness.

Hyperliquid is continuing to push this direction: from the earliest need to protect your farm with weapons, to the later you can put your money in the bank, and now Hyperliquid – you can completely control your funds through encryption technology.

Specifically, we are building a system that:

• Meet all users’ expectations for Web2 finance

• Offer a low fee

• Supports quick transfer

• Realize instant settlement

• Provide liquidity comparable to centralized exchanges

• Allows integration with other applications without trust

• Support loans with collateral

• Give users real freedom to use their funds

Financing Strategy

Host: Why choose not to accept any investment?This is rare in the industry.

Jeff: This is indeed not a commercial project in the traditional sense.This may be the first time DeFi and even the entire cryptocurrency space have done so, but if you look at Amazon’s example, Bezos didn’t profit from it in the early days.

There are several deep reasons why we do this:

1. The cryptocurrency industry attaches too much importance to short-term interests

2. If we want to create new financial methods, letting VCs hold 50% of the network share in the early stages will be a permanent stain.

3. Our team has the ability to not rely on external financing, which allows us to stick to this decision

Industry perspective

Host: Do you have any criticism of the current cryptocurrency industry?

Jeff: To be honest, the most “successful” products in the industry are often issuing fraudulent tokens.Few projects really follow the user-first pattern, because it is really difficult to acquire real users.Most projects take shortcuts: first get investment from large market makers and then attract transactions through incentive plans.This model is unsustainable in the long run.

Host: How do you view the current situation of the cryptocurrency industry?

Jeff: While many people see cryptocurrency as a failed experiment, I think it is the only hope that humans can reinvent the financial system.Finance is one of the greatest inventions of mankind, and it allows us to:

• Express value in a more abstract way

• Achieve better capital allocation

• Establish a complete economic system

Without these, all other advancements may not be possible.Human society may still be in the stage of farming and even hunting.

Software should be able to revolutionize finance, but the reality is that finance (and possibly healthcare) is one of the few large industries that have not experienced substantial innovation.

Technological innovation

Host: Can you tell me in detail about the concept of Builder Codes?

Jeff: This is a simple but powerful concept.It allows anyone to build financial applications based on Hyperliquid, such as:

• An innovative mobile wallet

• Social trading platform

• Regional exchanges

• Franchise currency deposit channel

Developers can:

• Build your own exchange business

• Use our neutral backend

• Charge fees in a way that users trust

• Gain revenue directly at the agreement level rather than relying on private agreements with centralized exchanges

This will open up a whole new way of building business in DeFi and make specialization possible.People who understand the needs of users in a specific region can focus on serving those users, and 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 sure where you are going in the end, but make sure every step is in the right direction.It is important to take every step well, rather than be overly obsessed with the distant end.This is why we focus more on infrastructure construction than short-term market performance.

Host: What is Hyperliquid’s long-term vision?

Jeff: Our core philosophy is:

1. Cryptocurrencies Will Change How Finance Works

2. Traditional finance will eventually migrate to cryptocurrencies

3. Hyperliquid will become the basic platform for carrying these financial activities

The specific implementation path is difficult to predict, but this is not the most important thing.We focus on building infrastructure that will play a significant role no matter how it develops in the future:

• Builder Codes System

• EVM integrated with on-chain native components

• Sustainable quality liquidity

These are difficult but essential infrastructures, and I believe that no matter how cryptocurrencies develop in 10 years, they will be an indispensable cornerstone.