Hyperliquid founder Jeff talks about team background, why not accept investment, criticism of the encryption industry

Interview: When Shift Happens Compiled by Yuliya, PANews The previous interview of ‘When Shift Happens’ invited the founder of Hyperliquid Labs, Jeff. Hyperliquid is a Decentralized Perpetual Contract Trading platform, and also a Layer 1 project. In a one-hour conversation, Jeff shared his entrepreneurial journey, project vision, and observations on the Decentralized Finance industry. PANews has compiled the interview content, involving technical innovation of the project, operational mode, improvement of user experience, and also discussed the development trends and challenges of the Cryptocurrency industry. 1. Entrepreneurial Journey Host: Jeff, can you talk to us about how you embarked on the entrepreneurial path? Jeff: It all started in early 2020. At that time, I began researching some simple trading scripts, mainly focusing on Centralized Cryptocurrency exchange (CEX). Although there were already many large market makers in the field, sometimes ‘ignorance is bliss’ can be a good thing. I just wanted 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 didn’t know much about coding before, but in order to achieve my goal, I started learning programming by myself. By 2022, we had become one of the largest traders in many trading venues, and 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: Firstly, we started to follow the field of Decentralized Finance and discovered many interesting protocol designs. There is an interesting phenomenon in Decentralized Finance: many people who do not understand finance are trying to build financial systems, which in turn brings many opportunities for quantitative strategies. Secondly, the collapse of FTX was an important turning point. This incident made people realize that blind trust in Centralized exchange is not advisable. This is not an abstract theoretical discussion, but real financial losses. For us, this was an important revelation - the world is finally ready to embrace true Decentralized Finance. 2. Product Concept Host: Can you explain in layman’s terms what exactly Hyperliquid does? Jeff: From the perspective of human history, society has always been evolving towards individualism. Every progress towards individualism, human rights, etc., has been positive in terms of results, whether measured by GDP or happiness. Hyperliquid is continuing to push in this direction: from the earliest need to protect one’s farm with weapons, to later being able to store money in a bank, and now to Hyperliquid - where you can fully control your funds through encryption technology. Specifically, we are building a system that can: Meet all the expectations of users for Web2 finance Provide low fees Support fast transfers Achieve instant Settlement Provide Liquidity comparable to Centralized exchange Allow integration with other applications without trust Support borrowing with Collateral Allow users to truly use their funds freely 3. Financing Strategy Host: Why choose not to accept any investment? This is rare in the industry. Jeff: This is indeed not a traditional commercial project. This may be the first time in the Decentralized Finance or even the entire Cryptocurrency field to do so, but if you look at the example of Amazon, Bezos did not profit from it for a long time in the early days. There are several deep reasons for our decision: The Cryptocurrency industry places too much emphasis on short-term gains If we want to create a new way of finance, having VCs hold 50% of the network share in the early stages would be a permanent stain Our team has the ability to not rely on external financing, which allows us to adhere to this decision 4. Industry Perspective Host: Do you have any criticisms of the current Cryptocurrency industry? Jeff: To be honest, the most ‘successful’ products in the industry are often fraudulent Token issuances. Few projects truly follow a user-centric model, as it is indeed very difficult to acquire real users. Most projects take shortcuts: first obtain investment from large market makers, and then attract 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: Although many people see Cryptocurrency as a failed experiment, I believe it is the only hope for humanity to reinvent the financial system. Finance is one of the greatest inventions of humanity, it allows us to: Represent 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 may still be stuck in the agricultural or even hunting and gathering stages. Software should be able to 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. 5. Technological Innovation Host: Can you elaborate on the concept of Builder Codes? Jeff: This is a simple yet powerful concept. It allows anyone to build financial applications on top of Hyperliquid, such as: Innovative mobile Wallet Social trading platform Regional exchange Fiat Currency deposit channels Developers can: Build their own exchange business Use our neutral backend Charge fees in a way that is trusted by users Earn income directly at the protocol level, rather than rely on private protocols of Centralized exchange This will open up a whole new way of building businesses in Decentralized Finance, making specialization possible. People who understand the specific needs of a particular region can focus on serving those users, while Hyperliquid provides support in the background. 6. Future Prospects Host: How do you view the long-term development of the project? Jeff: I like to use the analogies of Go and chess. You don’t need to know exactly where you want to end up, but you need to ensure that each step is in the right direction. It’s important to take every step well, rather than being overly fixated on the distant endpoint. That’s why we focus more on the construction of infrastructure rather than short-term market performance. Host: What is the long-term vision of Hyperliquid? Jeff: Our core idea is: Cryptocurrency will change the way finance operates TradFi will eventually migrate to Cryptocurrency Hyperliquid will become the foundational platform that carries out these financial activities The specific implementation path is difficult to predict, but it’s not the most important thing. We focus on building the infrastructure that will play a crucial role regardless of how Cryptocurrency develops in the future: Builder Codes system EVM integrated with on-chain native components Sustainable high-quality Liquidity These are difficult but indispensable infrastructures, and I believe that no matter how Cryptocurrency develops in 10 years, they will be essential cornerstones.