Dialogue with Hyperliquid Founder Jeff: How 11 People Built "On-Chain Binance"?

Hyperliquid is one of the most successful projects of this cycle. With just an 11-person team, it has captured over 75% of the decentralized perpetual market. At the time of this article's publication, Hyperliquid's user asset scale reached approximately $6.2 billion, with HYPE's market capitalization nearing $16 billion and FDV close to $46 billion, ranking 13th. Hyperliquid is even considered by the community to potentially be the next Binance.

In this episode, Hyperliquid founder Jeff Yan shared his journey and thoughts on building a decentralized trading protocol with Colin, the editor-in-chief of Wu Shuo. He discussed the importance of self-funding, the reasons for rejecting venture capital, and the commitment to a user-driven growth philosophy. Jeff also elaborated on Hyperliquid's vision for the future of decentralized finance, the logic behind not listing tokens on centralized exchanges, and the team's commitment to remaining lean and efficient. He also shared his views on crypto entrepreneurship, leadership in the crypto industry, and how Eastern and Western cultural values influence his business thinking.

For the complete audio and video, please listen on mainstream audio platforms like Xiaoyuzhou and others at home and abroad. This article does not constitute any investment advice, and the interviewee's views do not represent Wu Shuo. Readers are advised to strictly comply with the laws and regulations of their location.

Jeff's Background and Journey into Crypto

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

Jeff: Of course. I grew up in the United States and graduated from Harvard University in 2017, majoring in mathematics and computer science. Although it wasn't long ago, it felt like a very different era. Back then, everyone studying math wanted to work in math or computer science, but there weren't many options. The startup scene was relatively mature, large-scale social media was becoming outdated, and AI wasn't as hot as it is now.

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 large market makers in the U.S. stock market and other markets at the time (and I believe still is). The work environment there was great, like a startup, but focused on trading. I got to think deeply about many interesting mathematical problems, understand how markets operate, 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 white paper, got a bit of an understanding, and immediately felt that this would be the future of finance. So since leaving HRT, I've basically been in the crypto space. Starting around 2022, we began doing quantitative trading in crypto, looking at both centralized and decentralized exchanges. At that time, FTX collapsed, and we really saw its impact.

We realized that people would start to understand the value of self-custody and be ready to trade cryptocurrencies in a decentralized manner. At the same time, we found that there was a lack of an exchange that focused on both decentralized principles and user experience. So we thought, why not try to build a trading platform that adheres to decentralized principles while providing a great user experience? That has been the DNA of Hyperliquid from the very beginning.

Colin: At the beginning, did you ever think Hyperliquid would be as successful as it is today?

Jeff: I definitely didn't think it would be this big. I've always had a vision, and it's actually quite easy to do well by working harder than others, maintaining faith, and having a long-term vision and commitment. It's important to recognize that things won't happen overnight; you have to be willing to get back up from failures, and I think that's definitely true.

So I feel we've always had this vision. Even now, I think we still have grander goals. But of course, if you had told me back then that we would know it would be this big, that would have been foolish. It's mainly due to the hard work of the team, and the community supporting this important idea at critical moments, and of course, some luck. You can never say these things are inevitable.

Why Hyperliquid Chose Self-Funding

Colin: Did you initially build Hyperliquid entirely with your own funds? Why did you choose to reject venture capital or other people's investments? What is the philosophy behind it?

Jeff: Yes, Hyperliquid was entirely self-funded. I think I never did this to make money. In fact, before Hyperliquid, trading made me realize that money is just a number. I don't care much about material wealth; I actually don't care much about money. For me, what's important is to do 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 think Hyperliquid is very unique because part of the vision—actually the entire vision—is to redefine how people interact with finance and value, and what that means to them. It's difficult to encourage people to try something very new and possibly unfamiliar.

One point that resonated with many is that ownership should be community-driven. When Hyperliquid launched, the standard practice was to raise large amounts of money through venture capitalists and create a lot of hype—funding round after funding round, feeling "oh, we're making progress because last time we raised $1 million, this time it's $10 million, then $100 million." But I always felt that approach was a bit hollow; that wasn't real progress.

Real progress is when users derive actual value from what you're doing, not when a group of early investors who put in some money benefit from it. So that's our vision, and I think it really resonated with many people. We're fortunate that everyone can 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 exchanges. Why did you choose to do this?

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

So, we didn't have enough resources to help handle the listing affairs. We believe that ultimately, every platform will choose whether to list based on its own decisions, and we can accept any outcome. If a platform wants to list our token, that's great because it means their users will be exposed to our product. If other platforms don't list, that's fine too, because over time, they might list— as long as we do our job and build good technology. It also means that those who truly care about Hyperliquid will proactively find us.

Suppose there's an enthusiastic user who really cares about Hyperliquid but can't find us; they might try it themselves. We think that's not a bad outcome either. But in reality, the fundamental reason for all this is simply that we didn't have enough capacity to do things beyond our core functions.

Advice for Crypto Startups

Colin: From your perspective, if you were to give some advice to entrepreneurs with funding or resources, would you still advise them not to focus too much on token listings or venture capital?

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

However, I believe if you have capital and the ability to do something, and you truly believe in it, personally, I think it's best to avoid diluting overall ownership—because ownership shares are fixed—just for short-term benefits. Perhaps it would be better if the community could own a larger share. In the long run, that's better and fairer. These people are the most important part 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? Did they provide tokens or airdrops? I heard a rumor that some significant market makers helped Hyperliquid compete with Binance. Is that true?

Jeff: Basically, the answer is no. We didn't have any private arrangements, like profit-sharing agreements or investments. There were indeed some market makers who reached out to us because that practice 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 didn't have investors or such arrangements. Our thinking has always been that while this might bring some difficulties in the short term, it's the right approach in the long run.

Many centralized exchanges have been criticized for their internal funding pools or designated market makers (DMM). I think it's particularly important for decentralized exchanges to avoid these practices from the very 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's Core Team and Recruitment Strategy

Colin: How large is Hyperliquid's core team now? What is the atmosphere like within the team?

Jeff: We currently have 11 people, about half of whom are engineers and the other half non-engineers. The team is small. The overall atmosphere is quite good; we've been through a lot together. I enjoy working with the team.

I think we have many things we do well, but there are also many areas where we can improve. We are continuously striving to recruit the best people. So, we don't want to remain this small forever, but we are very selective about our partners. I've always believed, or rather, I've quickly learned that hiring the wrong person is far worse than not hiring anyone at all.

Colin: So, will you be hiring more people in the future? What kind of people are you looking to hire?

Jeff: We want a bit of everything. It's hard to predict because the future is full of uncertainties, and Hyperliquid itself is still very young, but it has already undergone many changes. Initially, our focus was entirely on becoming a user-friendly, high-performance decentralized perpetual exchange. But now our vision is much larger. Many teams are developing on the platform, and the vision has become more ambitious, with increasing technical complexity.

Therefore, the things people need to do have changed significantly 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 trustworthy individuals, and most importantly, people who can truly be passionate about the cause we are building.

Ecosystem Projects

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

Jeff: Well, I don't speak on behalf of the foundation, but so far, the foundation has not 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 the truly valuable projects, ensuring they are treated fairly, and deciding how to allocate resources. Ultimately, this should be the job of venture capitalists. Venture capital firms are investing in Hyperliquid ecosystem projects, and I think that's great because it allows different people and capital to autonomously decide where the funds go.

Hyperliquid's Development Roadmap

Colin: What is Hyperliquid's roadmap for the future?

Jeff: We don't focus too much on specific milestones. We usually have some important matters actively progressing, and I think these things should be launched as soon as possible, even though they will ultimately become very complex. The system itself is complex, so we need to be very careful about how we release these features. Besides some long-term vision content we are pushing forward, we don't do much milestone planning. So, we won't make specific predictions like "we'll do this in a certain quarter."

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

These things have kept us very busy. I think knowing what we are doing next isn't particularly helpful. What's more important is to remain flexible because this field changes very quickly, and finance is rapidly evolving. Being able to quickly understand what's happening and adapt is crucial. If we had a very detailed roadmap, it might be harder to do the right thing 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 transitioned from an initial application-based project to more of a protocol. What people consider applications are essentially just a front end that anyone can create, basically interacting with the blockchain via APIs. The current focus is on making the blockchain as efficient and scalable as possible and ensuring it has all the necessary features to support all financial operations. Then, others can build things like stablecoins, tokenization, or any other projects.

I think this approach has many benefits because what one team can accomplish is limited. We don't want to build a very large, centralized team with many departments and top-down management. This doesn't align with my view of cryptocurrency, or rather, it doesn't align with the vision that Satoshi or others in the crypto community have for technology. Having a single company build everything can lead to a lack of resilience and strength in the technology. In contrast, if the core is a decentralized protocol that anyone can interact with, self-operating, and remains 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.

Comparison of Hyperliquid's Success with Large Teams

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

Jeff: Well, I actually don't know much about other teams, so it's hard to make comparisons.

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

These companies might have ten times more people (in each team) 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, treating it as something anyone can do on the blockchain, then more people are involved. Any team working on Hyperliquid might be larger than the team responsible for the core of the protocol. So perhaps this comparison is more appropriate.

Jeff's Management Style and Leadership

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

Jeff: I'm not quite sure what my management style is; you might want to ask those who work with me. However, I think I have high expectations of people. Our team is very small, and the workload is significant. So yes, I might push people to do more than they are comfortable with, but that might be the case for every CEO or CTO.

I am quite hands-on. I try not to micromanage—just give people some challenging tasks, and the stronger individuals can handle them well. I like to let them take full responsibility.

But on the other hand, I think it's not quite right to completely let go. I have always been actively involved in the technical side of things, keeping up with everything happening on the technical front. Although this is becoming increasingly difficult, I feel it's essential to maintain this involvement because what Hyperliquid is doing is very important.

Everything is interconnected—it's a blockchain, and a node software ensures the security of the entire system. If that part becomes chaotic or different people work from different angles and conflict arises, that'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 to these startups?

Jeff: Yes, I think there are many opportunities. If you're 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 might not be entirely suited for it. AI has indeed taken the spotlight, and there's probably a reason for that. The crypto industry has many things that aren't so popular; there have been many irregularities in the past, and similar phenomena still exist today, so I don't blame others for being cautious about it.

Nevertheless, I think there are still many things worth building in the crypto space. The key lies in the perspective. So far, the money made successfully in the crypto industry has mostly been "extractive," rather than "generative." A lot of it has been similar to scams, like creating demand for a token and then easily selling it. I think that's very unfortunate. It gives some people a lot of power but also attracts those who want to abuse the system. If you look at it from this angle, there really isn't much worth building.

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

The finance industry itself is enormous, and the fintech industry is also very large. They are currently larger and more valuable than the crypto industry. Moreover, I believe crypto can indeed provide the best solutions to these problems. So, I hope that in the coming years, there will be more practical use cases. It seems like a golden opportunity, accompanied by policy changes and a general optimism in the tech field.

I think this industry has a second chance to make a good impression and build something valuable. Once that happens, it will create a self-reinforcing cycle, inspiring more people to build and create more examples. I think that's what this industry truly needs.

Jeff's Cultural Background and Its Influence on Hyperliquid

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

Jeff: Yes, my parents both immigrated from China. So I consider myself a first-generation American, born and raised in the U.S. I am a blend of Eastern and Western cultures.

I think many values from both East and West are complementary. Looking back, this may be an important reason for Hyperliquid's success. We combine the strengths of both. I believe that American and Western values are crucial for the success of startups, which is why most of the largest startups are in the U.S. I think as long as the world remains in its current state, this will continue to hold true.

These values include believing that a small team can achieve great things, daring to dream big, but also thinking independently, not taking the status quo for granted, and believing in one's ability to change the world. This is a very typical American mindset, and as someone who grew up in the U.S., I strongly resonate with this idea.

I don't care much about politics; I just want to get things done. But I think these entrepreneurial values align very well with me. As for the Eastern part, I don't know much about Chinese history and such. I think my generation might have a downside, which is that after immigrating to a new country, one might lose some connection to their 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, and that's how I see myself. Well, I can speak some Chinese, but I've indeed regressed because I don't use it much anymore.

Jeff's Gratitude to the Chinese Community and Thoughts on the Crypto Market

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

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

It's really great to see them become such a large community and provide support. Ultimately, Hyperliquid should not be bound by any boundaries, whether political, national, or otherwise. I sincerely believe in free markets and capitalism; I think this is the best way to promote prosperity and drive human progress.

Yes, "prosperity" is the most fitting word. I believe Hyperliquid is an extension of this idea. It's really cool to see people from all over the world support it and succeed by building it, and I hope to continue supporting everyone in this process. As for the bull market, I'm actually not an expert in that area; I have no idea.

I've always focused on automated trading, and my emphasis 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 time frame.

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

So, this isn't my area of expertise, but I think it actually doesn't matter that much. If your main focus is on buying and selling tokens, then bull and bear markets are indeed very important. But if you focus on building, then their impact isn't as significant. In a sense, it's even better to build when the market is calmer because there are fewer distractions. That's always been my approach.