Hyperliquid is one of the most successful projects in this cycle, with a team of just 11 people, it has captured over 75% of the decentralized perpetual market. At the time of this article's release, Hyperliquid's user asset size reached approximately $6.2 billion, HYPE market capitalization is nearly $16 billion, FDV is nearly $46 billion, ranking 13th.Hyperliquid even is considered by the community to be the next Binance.

In this episode, Hyperliquid founder Jeff Yan shared his journey and thoughts on building a decentralized trading protocol with Wu Shuo editor Colin. He talked about the importance of self-funding, the reasons for rejecting venture capital, and the concept of user-driven growth. Jeff also explained Hyperliquid's vision for the future of decentralized finance, the logic of not listing tokens on centralized exchanges, and the team's commitment to maintaining a lean and efficient structure. He also shared his views on crypto entrepreneurship, leadership in the crypto industry, and how cultural values between the East and West have influenced his business ideas.

For the full audio and video, please listen on mainstream audio platforms such as Xiaoyuzhou. This article does not constitute any investment advice. The views of the interviewees do not represent Wu Shuo. Readers are advised to strictly comply with local laws and regulations.

Jeff's background and his journey into the crypto space

Colin: Thank you, Jeff, for taking the time to participate. As we know, Hyperliquid is one of the most influential crypto protocols in the past year. My first question is, can you tell us about your experiences before creating Hyperliquid and how they shaped your path into the crypto industry?

Jeff: Of course. I grew up in the US, graduated from Harvard University in 2017, majoring in mathematics and computer science. Although that was not long ago, it felt like a very different era. At that time, everyone who studied math wanted to work in math or computer science, but there were not many options. The startup scene was relatively mature, while large-scale social media was gradually becoming outdated, and AI had not yet become so hot.

So, most of us faced a choice: stay in academia to do research or switch to quantitative trading. I chose to go to Hudson River Trading, which was one of the largemarket makers in the US stock market and other markets (I still think it is now). The work environment was great, like a startup, but it was trading work. I was able to deeply think about many interesting mathematical problems, understand how the market works, and learn how to apply quantitative thinking to the market.

Around 2018, I learned about Ethereum and thought it was really cool. I basically read the Ethereum whitepaper, got a little bit of understanding, and immediately felt it would be the future of finance. So, since leaving HRT, I have been in the crypto space. From around 2022, we did quantitative trading in the crypto space, looking at both centralized and decentralized exchanges. At that time, FTX collapsed, and we did see its impact.

At that time, we realized that people would start to understand the value of self-custody and prepare to trade cryptocurrencies in a decentralized way. At the same time, we also found that there was a lack of an exchange that focused on decentralization principles and user experience. Therefore, we thought, why not try to build a platform that aligns with decentralization principles and provides a high-quality user experience? This is the DNA that Hyperliquid has had from the beginning.

Colin: Did you ever think that Hyperliquid would be as successful as it is today at the beginning?

Jeff: I definitely didn't expect it to be this big. I've always had a vision, and by working harder than others, keeping faith, having a long-term vision and commitment, doing well is actually easy. It's important to realize that things don't happen overnight, you have to be willing to get back up from failure, I think this is indeed correct.

So I think we've always had this vision. Even now, I feel we still have bigger goals. But of course, if we had known it would be this big, that would have been foolish. It's mainly due to the hard work of the team, and the community supported this important idea at critical moments, of course, there was also some luck. You can never say such things are inevitable.

Why Hyperliquid chose self-funding

Colin: Initially, did you completely fund Hyperliquid yourself? Why choose to reject venture capital or other investments? What was the philosophy behind it?

Jeff: Yes, Hyperliquid is entirely self-funded. I never really did this for money. In fact, before Hyperliquid, trading taught me that money is just a number. I don't really care about material wealth, I actually don't care much about money. For me, what matters is doing something interesting and valuable to the world. So I'm happy to do it, even if I fail, as long as I'm prepared for success.

I do believe that Hyperliquid is very unique, because part of the vision — — actually the whole vision — — is to redefine how people interact with finance and value, and what it means for them. It's difficult to push people to try something very new and possibly unfamiliar.

One thing that resonated with many people was that ownership should be led by the community. When Hyperliquid launched, the standard practice was to raise large amounts of funds from venture investors and create a lot of excitement — — raising funds repeatedly, feeling "Oh, we are making progress, because we raised $10 million last time, then $100 million, then $1 billion." But I always felt that approach was a bit fake, that wasn't real progress.

Real progress is when users gain actual value from what you do, not when a group of investors who put in some money early benefit. That's our vision, and I think it really touched many people. We were lucky that everyone could support this vision.

Why not list on centralized exchanges

Colin: Many people noticed that when Hyperliquid launched its token, it was not listed on any centralized exchange. Why did you choose to do this?

Jeff: They could have listed it anywhere (HYPE). Our framework has always focused on building and creating what users want, rather than worrying too much about what others do. We just focus, fully focused on what we're doing. We are a very small team and don't have a business development (BD) team. We have some people responsible for collaboration with the community and ecosystem, but we don't have a full-time team facing institutions like other companies.

So, we don't have enough resources to handle listing matters. We believe that eventually, each platform will decide on its own whether to list, and we can accept any outcome. If a platform wants to list our token, that's great, because their users will be exposed to our product. If other platforms don't list, that's fine, because over time, they may do so — — as long as we do our job and build the technology. It also means that those who truly care about Hyperliquid will find us on their own.

Assuming there is a passionate user who really cares about Hyperliquid but can't find us, they might try it themselves. We think that's not a bad outcome. But the real reason is simply that we don't have the capacity to do anything beyond our core functions.

Advice for crypto startups

Colin: From your perspective, if you were to give some advice to entrepreneurs who have funding or resources, would you still recommend they pay less attention to token listings or venture capital?

Jeff: Not necessarily. I think if you need funding to do something, venture capital could be a good option. Venture capital can do a lot of investments, they have a lot of capital. This way, startups don't have to worry about short-term funding issues, and can focus on building and expanding. So, I think it has its place in existence.

However, I think if you have the capital and the ability to do something, and you really believe in it, personally, I think it's better to avoid diluting overall ownership — — because ownership shares are fixed — — rather than diluting it just for short-term gains. Maybe, if the community owns more shares, that would be better. In the long run, this is better and fairer. These are the most important parts of the network, right?

The role of market makers in Hyperliquid's development

Colin: Did you collaborate with some market makers in the early stages to build Hyperliquid? Would they provide tokens or airdrops? I heard a rumor that some important market makers helped Hyperliquid compete with Binance, is that true?

Jeff: Basically, the answer is no. We had no private arrangements, such as profit-sharing agreements or investments. Indeed, some market makers contacted us, because that was common at the time.

Many decentralized exchanges raise funds and get funding from market makers. Market makers are also investors, they provide liquidity and help. But we don't have investors, nor do we have such arrangements. Our idea has always been that although this may bring some difficulties in the short term, it is the right approach in the long run.

Many centralized exchanges are criticized for their internal funds pools or designated market makers (DMMs). I think it's particularly important for decentralized exchanges to avoid these practices from the beginning. The only exception is HLP, but that's a completely different matter, because HLP is owned by the protocol, and any user can deposit into it, it doesn't belong to any single entity.

Hyperliquid core team and hiring strategy

Colin: What is the size of Hyperliquid's current core team? What is the atmosphere within the team?

Jeff: We currently have 11 people, about half are engineers, the other half are non-engineers. The team is small. The overall atmosphere is pretty good, we have gone through a lot of difficulties together. My collaboration with the team is still very pleasant.

I think we have done a lot well, but there is also a lot we can do better. We have always been trying to hire the best people. So, we don't want to stay small forever, but we are very picky about partners. I have always believed, or I quickly learned, that hiring the wrong people is worse than not hiring anyone at all.

Colin: So, will you hire more people in the future? What kind of people do you want to hire?

Jeff: We want everything. It's hard to predict, because the future is full of uncertainty, and Hyperliquid itself is still young, but it has already changed a lot. Initially, our focus was entirely on becoming a user-friendly, high-performance decentralized perpetual exchange. Now our vision is much larger. There are many teams developing on the platform, and the vision has become more grand, and the technical complexity has increased.

Therefore, the things people need to do have changed a lot during this transition. It's hard to predict what kind of people the team will need. I can only say that we need very smart, proactive, and highly ethical people, most importantly, people who are truly passionate about the work we are building.

Ecosystem projects

Colin: Will your team or foundation invest in ecosystem projects built on Hyperliquid?

Jeff: Well, I don't speak for the foundation, but so far, the foundation hasn't invested in any projects. I think it's important to remain neutral. Investment is feasible, but it would require us or the foundation to spend a lot of time identifying all truly valuable projects, ensuring they are treated fairly, and deciding how to allocate resources. Ultimately, this should be the work of venture capitalists. Venture capital firms are investing in Hyperliquid ecosystem projects, and I think that's good, because it allows different people and capital to independently decide where to allocate funds.

Hyperliquid's development roadmap

Colin: What is Hyperliquid's future roadmap?

Jeff: We don't focus too much on specific milestones. We usually have some important items that are being actively pushed forward, and I think these things should be launched as soon as possible, although they will eventually become very complex. The system itself is very complex, so we need to carefully consider how to release these features. In addition to the long-term vision we are pushing forward, we don't make too many milestone plans. So, we don't make specific predictions like "do this in a certain quarter."

The current focus is on the implementation of HIP-3, and making spot trading and perpetual contracts more accessible. At the same time, we are also improving the system's performance to handle increasing loads.

These things have kept us very busy. I think knowing what we are doing next isn't particularly helpful. It's more important to stay flexible because the field changes very quickly, and finance is also developing rapidly. Being able to quickly understand what has happened and adapt is crucial. If we had a very detailed roadmap, it might be harder to do the right things at the right time.

Hyperliquid's role in the future of decentralized finance

Colin: Will Hyperliquid issue stablecoins in the future? Will Hyperliquid enter the tokenized stock market?

Jeff: Hyperliquid is unlikely to do these things, because so far, Hyperliquid has evolved from an initial application project into more of a protocol. The applications people think of are just front ends, anyone can create them, basically by interacting with the blockchain via API. The current focus is to make the blockchain as efficient and scalable as possible, and ensure it has all the necessary functions to support all financial activities. Then, others come to build stablecoins, tokenized assets, or any other projects.

I think there are many benefits to this approach, because a team can only do so much. We don't want to build a very large, centralized team with many departments and top-down management. This is not consistent with my view of cryptocurrency, or with the vision of Satoshi or other members of the crypto community regarding technology. Having a company build everything leads to a lack of resilience and strength in the technology. Instead, if the core is a decentralized protocol, anyone can interact with it, operate it on their own, remain objective and neutral, then others can build, collaborate, compete, and combine on top of it. This is a very powerful system, and I think this is how finance should operate.

Hyperliquid's success compared to large teams

Colin: You mentioned that Hyperliquid's core team has only 11 people. Companies like Binance or OKX may have three or four thousand people. Why is Hyperliquid so successful, while many other decentralized exchanges are struggling? What do you think is the reason?

Jeff: Well, I don't really know the situations of other teams, so it's hard to compare.

But I think one important reason is that Hyperliquid is very focused. If you look at centralized exchanges, they are actually running multiple businesses. It seems like they have a core team, but they may also have a staking team, a marketing team, and even an institutional team. In my opinion, each of these teams is like a company.

These companies may each (teams) have, well, ten times more people than Hyperliquid. But the key is that they are also trying to do more internal work. I think this is just a different perspective. If you look at Hyperliquid more broadly, as something that anyone can do on the blockchain, there are more people involved. Any team working on Hyperliquid may be larger than the team responsible for the protocol's core. So, maybe this comparison would be more appropriate.

Jeff's management style and leadership

Colin: What is your management style? How do you lead a team in the crypto industry?

Jeff: I'm not sure what my management style is, you'd better ask people who work with me. However, I think I have high expectations for people. Our team is very small, and the workload is huge. So, yes, I may push people to do more than they are comfortable with, but this may be the same for every CEO or CTO.

I'm also very hands-on. I try not to micromanage — — just giving people challenging tasks, the stronger the person, the better they can handle it. I like to let them take full responsibility.

But on the other hand, I think just letting go completely isn't feasible. I have always been actively involved in technical work, and I am almost always aware of everything related to the technical aspects. Although this is getting harder, I think it's important to maintain this involvement, because what Hyperliquid is doing is very important.

Everything is interconnected — — it's a blockchain, a node software ensures the security of the entire system. If that part becomes messy, or different people work from different angles and conflict, it's very dangerous. Correctness and performance are crucial for the system's scalability.

Leadership philosophy and the importance of team collaboration

Colin: Many young people or startups are choosing to enter the AI field now. Do you still think there are many entrepreneurial opportunities in the crypto industry? What advice would you give these startups?

Jeff: Yes, I think there are many opportunities. If you are very smart, young, and ambitious, AI and crypto are definitely the two most obvious fields. But I do agree with what you said, some people are not quite right. AI has taken center stage, which probably has its reasons. There are many things in the crypto industry that are not very popular, and there have been many irregularities in the past, and there are still similar phenomena today, so I don't blame people for being cautious about it.

Nevertheless, I think there are still many things worth building in the crypto space. The key is the angle. So far, the money made in the crypto industry has mostly been "predatory," not "value-adding." Many of them are things like creating demand for a token and easily selling it. I think that's very regrettable. It gives certain people a lot of power, but also attracts those who want to abuse the system. If you look at it from this perspective, there's really nothing worth building.

But if you look at it from another perspective, that is, finance has become outdated, and the infrastructure supporting finance has also become outdated, and the only sustainable and effective way to upgrade is to rewrite it from scratch, using decentralized ownership and control, then there are many things to do.

The financial industry itself is very large, and the fintech industry is also very large. They are currently larger and more valuable than the crypto industry. And I think crypto does offer the best solutions to these problems. So, I hope that in the coming years, there will be more practical use cases. It looks like a golden opportunity, accompanied by policy changes and widespread optimism in the tech field.

I think the industry has a second chance to make a good impression and build something valuable. Once that happens, it will form a self-reinforcing cycle, more people will be inspired to build and create more examples. I think this is what the industry really needs.

Jeff's cultural background and its impact on Hyperliquid

Colin: The next question might be more personal. If you don't want to answer, that's fine. Are your parents Chinese immigrants? Can you speak Chinese?

Jeff: Yes, my parents are both immigrants from China. So I'm a first-generation American, born and raised in the US. I'm a mix of Eastern and Western cultures.

I think many values of the East and West are complementary. Looking back now, this may be one of the important reasons for Hyperliquid's success. We combined the strengths of both. I think the values of the US and Western countries are crucial for the success of startups, which is why most of the largest startups are in the US. I think as long as the world remains as it is, this will continue to hold true.

These values include believing that a small team can achieve something, daring to have big dreams, but also thinking independently, not taking the status quo for granted, and believing that you can change the world. This is a very typical American mindset, and as someone raised in the US, I strongly identify with this idea.

I'm not really into politics, I just want to get things done, but I think these startup values fit me very well. As for the Eastern part, I don't know much about Chinese history and so on. I think one of the shortcomings of my generation is that after immigrating to a new country, we may lose some connection with our roots.

So, I feel a bit guilty about that, but I have some understanding of these principles. Traditionally, Chinese values emphasize humility, doing more than talking, and a strong work ethic. These have influenced the way I work and build. Both Eastern and Western worldviews are very valuable and complementary, that's how I see myself. Well, I can speak a little Chinese, but it's definitely deteriorated, because I don't use it much anymore.

Jeff's thanks to the Chinese community and thoughts on the crypto market

Colin: My last question is, can you say a few words to the Chinese community or Chinese fans? They have been very supportive of Hyperliquid. And there's also a more interesting question — — do you think we are still in a bull market now? What is your prediction for Bitcoin in this cycle?

Jeff: Thank you for your support, really appreciate it. I haven't been to China for a while, and I feel both close and distant.

It's great to see them become such a huge community and support us. Ultimately, Hyperliquid shouldn't be bound by any limits, whether political, national, or anything else. I truly believe in free markets and capitalism, and I think this is the best way to promote prosperity and drive human progress.

Yes, prosperity is the most fitting word. I think Hyperliquid is an extension of this idea. It's really cool to see people around the world support it and succeed by building it, and I hope to continue supporting you in this process. As for the bull market, I'm not really an expert in this area, I don't know at all.

I've always focused on automated trading, and my focus is on understanding the detailed time frames of the market. My mental model is that it's hard to make confident predictions in the long-term frame.

If you think you know, you might be wrong. I think the smartest people who make long-term predictions must do so with a lot of uncertainty. For example, if you ask Warren Buffett what he thinks about Coca-Cola's stock five years from now, he won't confidently say it will be big. He might just give a vague answer about fundamentals, something like that.

So, it's not my area of expertise, but I think it's actually not that important. If your main focus is buying and selling tokens, then bull and bear markets are indeed important. But if you focus on building, their impact is less. In a way, building during a calm market is actually better, because there are fewer distractions. This has always been my approach.