Hyperliquid founder announces no fundraising and no VC: the genesis tokens are all given to early users. How rare is this in DeFi?

Hyperliquid founder Jeff issued a statement on X platform, announcing that no private investors will be involved, and that the genesis token distribution is entirely focused on early users, with core contributors not participating in the allocation. What is the logic behind this decision? In a market where perpetual DEXs have already become dominant, why did Hyperliquid choose such a token distribution approach?

A Declaration of “Reverse Financing”

Core statement of governance philosophy

Jeff emphasized three key principles in his statement:

• No private investors, no VC-backed funds involved
• No market maker trading privileges, all market participants are on equal footing
• No protocol fees paid by any company, reflecting neutrality

These principles ultimately boil down to one sentence: Hyperliquid’s genesis token distribution follows the spirit of Bitcoin, entirely allocated to early users. Here, “early users” refers to community members who genuinely participated early on, contributing computing power or liquidity, rather than investment institutions that obtained equity through fundraising.

On-chain verifiable, no obfuscation

An often overlooked detail is that “the complete distribution process can be verified on-chain without any obfuscation.” This means:

• All distribution data are transparent and recorded on the blockchain
• No hidden manipulations or complex distribution contracts masking true intent
• Anyone can verify token allocations

This transparency is not uncommon in crypto projects, but it is relatively rare in projects with high fundraising amounts and valuations.

Comparing to the Market: How Different Is It?

Traditional fundraising vs Hyperliquid approach

This comparison highlights a reality: most DeFi projects reserve a portion of tokens and special privileges for VCs during fundraising. Hyperliquid has chosen the opposite approach.

Why can Hyperliquid do this?

Market position already solidified

According to recent data, Hyperliquid has become the absolute leader in the perpetual DEX market:

• CLOB (central limit order book) mode accounts for about 70-75% of market share
• Daily trading volume in the tens of billions USD
• User activity far exceeds competitors

This market position means Hyperliquid does not need traditional fundraising to finance growth. The project is self-sustaining through trading fees. Recent data shows that in the past 24 hours, 97% of Hyperliquid’s fee income was used to buy back and burn approximately 42,420 HYPE tokens, indicating strong cash flow.

Institutional recognition is rising

Interestingly, Hyperliquid’s “reverse financing” strategy has not reduced institutional attention. Recent news shows Bitwise has submitted 11 crypto ETF applications to the US SEC, including the Bitwise Hyperliquid Strategy ETF. This indicates that even without traditional funding backgrounds, the project’s compliance and market recognition remain high.

What does this mean for early users?

Value redistribution

In traditional fundraising, project value is divided among VCs, founders, employees, etc. Hyperliquid’s approach means more of this value flows to genuine participants.

However, it’s important to note that early users are not guaranteed profits. The actual value of tokens still depends on:

• Long-term project development
• Market demand
• Macro environment changes

Decentralization of governance rights

Without major shareholders (VCs), Hyperliquid’s governance rights are likely more dispersed. This could mean:

• More democratic decision-making
• But potentially lower decision efficiency
• Core contributors’ influence needs to be maintained through community consensus

Summary

Hyperliquid founder’s statement reflects a governance philosophy that is completely opposite to traditional fundraising models. In a landscape where perpetual DEXs already dominate the market, this “no fundraising, no VCs, all for users” approach not only becomes feasible but also offers a competitive advantage. It reinforces the core qualities of “neutrality” and “credibility” that are essential for financial infrastructure.

Market reactions, such as Bitwise’s ETF application, suggest increasing institutional recognition of this model. This may indicate that in future project governance, transparent, neutral, user-oriented models will gain more attention. However, the long-term sustainability of this approach remains to be validated over time.