2026-01-08 07:26:21

Regarding the competitive landscape of the DeFi market, industry insiders point out that the recent marginalization of dYdX by Hyperliquid is fundamentally due to differences in liquidity provision mechanisms.

The key difference lies in two design philosophies: dYdX adopts a "protocol not to guarantee" pure DeFi model, relying on market makers to proactively provide liquidity. However, this model faces awkward situations during extreme market conditions—once market volatility becomes intense, market makers may choose to withdraw to defend themselves, causing liquidity depth to evaporate instantly, trading slippage to spike sharply, and user experience to decline dramatically.

In contrast, Hyperliquid employs a more aggressive liquidity assurance mechanism. By setting liquidity responsibilities at the protocol level, it ensures that even in extreme situations, basic trading depth can be maintained. Although this design increases protocol complexity, it results in greater market stability and user confidence.

This comparison reflects a real dilemma: there is tension between DeFi's decentralization ideals and the practical demands of market liquidity. Whoever can find a balance between the two will be able to win the market.

DYDX12,13%

HYPE7,54%

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ImpermanentPhilosopher

· 01-11 06:06

dYdX really let us down this time. The promised decentralization was exposed during this extreme market fluctuation. Hyperliquid, although not entirely "pure," is indeed very user-friendly. Maybe this is the market's choice. Pure idealism can't compete with reality... Liquidity is more important than ideology. Basically, dYdX is too stubborn. Sometimes compromising can lead to better outcomes. Wait, can Hyperliquid really sustain this long-term, or is it just a temporary win? DeFi needs to find a balance between ideals and practicality. Having ideals alone isn't enough to close deals. Market makers get caught off guard, which is a fatal flaw of pure DeFi. I feel a bit sympathetic towards dYdX, but more than that, I think it's time for reflection.

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MiningDisasterSurvivor

· 01-11 02:02

Another story of liquidity and big dreams, I've been through it all. dYdX's pure DeFi idealism sounds beautiful, but when extreme market conditions hit, you still have to kneel. The projects from 2018 met the same fate. Hyperliquid's aggressive approach this time seems to have solved the problem, but what does protocol backing mean? Someone has to bear the risk, and who knows how the bills will be paid later.

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HalfBuddhaMoney

· 01-08 07:56

dYdX this wave indeed caught us off guard. To put it simply, once the market maker runs away, liquidity disappears. This kind of purely idealistic design is indeed powerless in a bear market. Although Hyperliquid's approach has a strong centralized flavor, at least it won't fail at critical moments, giving users peace of mind. DeFi is really a paradox: whether to decentralize or to be user-friendly, you really can't have both. The protocol covering such high costs on its own, is it sustainable in the long run? Or does it ultimately come down to whoever dares to put in more money wins? It seems that liquidity is more reliable than concepts. No matter how appealing the ideals are, they have to be backed by money.

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LuckyBearDrawer

· 01-08 07:56

Basically, dYdX was too idealistic, and the harsh reality backfired. Hyperliquid's mechanism is indeed fierce; although complex, it works. dYdX is still too obsessed with decentralization, and as a result, liquidity can evaporate just like that. It seems that DeFi ultimately needs to find a compromise; pure ideals are too easy to collapse. This round, Hyperliquid definitely won, but at the cost of sacrificing some of the original decentralization principles. To put it bluntly, users only care whether they can trade smoothly, they don't care how decentralized you are. I have to admit, Hyperliquid's design is more realistic than dYdX's方案. The lesson from dYdX has sounded an alarm for all DeFi projects. It feels like the final winners are those projects willing to "compromise." Liquidity is truly the lifeblood of DeFi; dYdX has proven that.

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SerumSqueezer

· 01-08 07:56

To be honest, dYdX's move was indeed a bad one. Pursuing decentralization purely ended up ruining itself. Hyperliquid directly offers protocol-level backing, honestly admitting that DeFi needs stability, which actually wins. The idealism of DeFi is very lofty, but the reality is quite stark, haha. It's that old question again: is it principle or money? dYdX should have seen this clearly long ago. Market makers are just paper tigers in the face of volatility.

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LiquidatedDreams

· 01-08 07:56

Basically, you still have to backstop it. Pure DeFi setups are just paper tigers in the face of reality. This round of dYdX really underperformed. During extreme market conditions, market makers run away very quickly, and users get directly screwed. Hyperliquid's approach is solid, although it feels a bit centralized, but at least it's reliable. Decentralization and liquidity are fundamentally incompatible, you can't have both.

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MaticHoleFiller

· 01-08 07:56

dYdX this wave indeed performed poorly. When extreme market conditions hit, market makers all ran away, slippage skyrocketed, and user experience was extremely disappointing. Hyperliquid's liquidity backstop design is indeed impressive. Although it’s a bit complex, it offers maximum stability, no wonder it’s quickly gaining market share. Honestly, it’s about finding that balance between decentralization and practicality. Pure idealism always suffers in the face of reality. This is the limitation of DeFi. Protocols that don’t provide a backstop sound noble, but when extreme market conditions occur, their true nature is revealed. It seems that in the future, survival will still depend on these "dirty" liquidity guarantee mechanisms. Ideals are better left to theorists.

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LiquidityWitch

· 01-08 07:55

ngl, dydx's pure idealism getting liquidated by hyperliquid's pragmatism... the market always demands its sacrifices 🔮

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SolidityStruggler

· 01-08 07:50

dYdX this wave got hit pretty hard, liquidity was wiped out in one sweep. Hyperliquid's protocol backing is indeed fierce, replacing trust with stability—I'm convinced by this logic. Where's the promised decentralization? In the end, it still relies on protocol infusions. Market makers run away in extreme market conditions, and dYdX gets stuck awkwardly. Sigh. This is the real dilemma of DeFi—it's truly hard to have both fish and bear paws. What's wrong with higher protocol complexity? As long as it works, that's all that matters.

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