When Hyperliquid takes over Solana's "Internet Capital Market" script

Author: Hu Tao, Chain Catcher

In the cyclical pattern of the cryptocurrency market, Solana once regained its peak with the narrative of being an "Ethereum killer" and exceptional performance. However, by 2026, this once high-powered "high-performance computer" is facing unprecedented deceleration pressure, primarily reflected in its price.

In the past year, SOL's price has fallen by as much as 73.5% from its peak, the largest decline among all major cryptocurrencies. During the recent market correction over the past month, SOL's rally has also been very weak, clearly underperforming other mainstream cryptocurrencies like BTC and ETH.

Additionally, Solana's core vision of the "Internet Capital Markets" has also been hit hard amid internal and external challenges, prompting senior leaders of the Solana Foundation to frequently speak out recently, generating hype for their ecosystem in public opinion.

Solana's Core Narrative Suffered Setback

In recent years, Solana has been trying to tell a story far grander than just a "high-performance public chain."

According to the definition of the Solana Foundation, the ultimate goal of Solana has shifted to "Internet Capital Markets"—a global trading network that brings stocks, commodities, futures, perpetual contracts, and even all real-world assets onto the blockchain.

Now, opening the official Solana website homepage, the most prominent slogan that immediately catches the eye is: "Building a capital market for every asset on Earth."

It means Solana not only aims to challenge Ethereum but also tries to replace traditional exchanges, brokerages, and clearing systems, becoming an on-chain version of Nasdaq. Its high speed, low fees, high throughput, and relatively mature user experience, along with strong backing from Wall Street capital, once made Solana regarded as the closest public chain to this goal.

But the problem is, when the "Internet Capital Markets" truly begin to take shape, the market finds that the core position is not necessarily occupied by Solana.

Hyperliquid's Unexpected Impact

One of the biggest structural changes in the crypto industry over the past year is the shift of perpetual contract markets away from traditional centralized exchanges (CEX) toward on-chain platforms.

And the biggest beneficiary of this trend is not Solana, nor Ethereum, Sui, or other networks, but Hyperliquid.

Initially, Hyperliquid was just an on-chain perpetual contract trading platform, but as its Layer1 strategy advanced, it has gradually evolved into a comprehensive financial infrastructure network. Compared to Solana's broad and abstract "capital markets" vision, Hyperliquid has chosen a more focused, trade-driven path.

For a long time, the Solana ecosystem has had many DeFi projects, but its core liquidity has always leaned more toward spot trading, meme coins, and on-chain speculation. Infrastructure capable of supporting institutional-level trading depth, risk management, and high-frequency trading has never been fully mature.

More critically, Hyperliquid has gradually proven something many previously overlooked: that the "Internet Capital Markets" may not necessarily need a universal ecosystem.

For high-frequency financial trading, performance, matching, liquidity, and trading experience are far more important than the "richness of on-chain applications." This suggests that a vertically focused Layer1 designed specifically for financial trading might be more suitable as the core of on-chain capital markets than a general-purpose public chain like Solana.

This is also why more and more funds, traders, and attention are converging on Hyperliquid.

After the Drift Incident, Solana Forced to Adjust Perpetual Contract Market Strategy

If Hyperliquid externally squeezed Solana's "capital markets" strategic space, then the attack incident on Drift Protocol internally tore open a huge gap.

In early April this year, Solana DeFi protocol Drift was attacked through governance and oracle exploits, resulting in over $200 million in losses.

As one of the most important perpetual contract protocols on Solana, Drift has always played a core liquidity role in Solana DeFi. After the attack, the protocol's functions were directly paralyzed, and a large amount of assets, vaults, and related protocols within the Solana ecosystem were affected, leading to a rapid decline in market confidence.

Perpetual contracts are a fiercely contested area in DeFi. Facing the market vacuum left by Drift and the strategic gap in on-chain derivatives, Solana's official team had to strongly support new alternative products to seize users and market share in the "Internet Capital Markets" frontline.

At this point, Solana's options included products like Pacifica, Phoenix, Jupiter, GMTrade, Bullet, Blink, among others. However, Solana founder Anatoly Yakovenko firmly chose Phoenix.

Over the past five days, Toly has posted at least twenty tweets or retweets related to Phoenix, either sharing testing experiences, directly recommending Phoenix, or discussing his views on it.

Regarding this "favoritism," Toly has repeatedly explained that Pacifica does not execute trades on the Solana chain; its compatibility with Solana is as good as Hyperliquid's, and Jup is already mature. He is more focused on early-stage teams from zero to one. Meanwhile, Phoenix is decentralized and can atomically integrate with all other applications on Solana.

Under Toly's influence, Phoenix's popularity has ranked among the top three on RootData's trending projects list for several consecutive days, reaching a historic peak in its heat index.

However, in terms of trading volume, Phoenix still lags far behind other established perpetual contract platforms. According to DeFillama data, Phoenix's long-term daily trading volume was below $4 million, recently surged to over $80 million amid market heat, but it still ranks outside the top 20 among all perpetual platforms, with more than a 20-fold gap compared to the top five platforms (minimum $1.6 billion).

Solana's Public Opinion Campaign and Internal Fractures

Faced with Hyperliquid's strong rise and internal ecosystem wounds, Solana supporters chose a seemingly "attack with a spear against a spear" approach—using decentralization as a weapon to launch public opinion attacks on Hyperliquid.

Solana Foundation member @harkl_ tweeted that Hyperliquid's slogan is a decentralized trading platform, but in reality, it has 24 validator nodes, closed-source node code, a single bridge holding billions of dollars, and records of forced liquidations during market volatility.

"Can you participate in any part of the protocol stack with your own resources without approval from a trusted third party? If not, then it’s not permissionless. Whatever you do, you cannot run Hyperliquid's sequencer," Toly further stated.

This discourse sparked intense debate within the crypto community. Supporters argued that Toly hit the core weakness of Hyperliquid—if there are fewer than 30 validator nodes, the node code is not open source, and the bridge is highly centralized, then what is the fundamental difference between the so-called "on-chain capital market" and CEX custodial models?

Opponents pointed out that Solana itself has reduced its validator count from 2,560 to about 756, with the Nakamoto coefficient dropping from 31 to 20, and the top twenty validators controlling over one-third of the staked tokens—in this context, discussing "decentralization" seems somewhat hypocritical.

A more troubling issue comes from within the Solana ecosystem. The consistent "favoritism" shown by many Solana Foundation leaders has caused dissatisfaction among many other protocol developers.

"They promote what benefits themselves, just because a team meets certain standards, they push others aside, turning friends into enemies," said kdotcrypto, co-founder of Bulk.

Constance, founder of Pacifica, offered a more restrained yet also more damaging comment: "We chose Solana in 2025, received no funding from the Foundation, and didn't raise from investors. We just want to build a good product first and let the market decide." Behind this "let the market decide" phrase is a veiled protest against the Solana Foundation's role as both referee and player.

The cruelest truth in the crypto market is that users do not care about grand narratives—they only care about depth, liquidity, and security. Hyperliquid's rise is not only a technological victory but also a blow to the narrative of "general-purpose public chains"—it proves that building a capital market does not necessarily require a sprawling ecosystem but an extremely efficient matching engine.

Now, Solana is caught in a quagmire of competing "decentralization metrics," while the heavily promoted Phoenix still has a 20-fold gap in trading volume compared to mainstream derivatives platforms.

In this battle for the "Internet Capital Markets" ultimate, if Solana cannot regain its dominance in derivatives by the second half of 2026, it may remain a good Meme playground, but its dream of "carrying global assets" will only drift further away.