Off the Block: Hyperliquid and the case for onchain trading

The collapse of FTX in November 2022 cost millions of users their funds overnight. The lesson was stark: if you don't control your private keys, you don't control your crypto. Three years on, Hyperliquid has built a credible answer to that problem, and it has done so without venture capital backing, without token allocations to insiders, and without compromising on the trading experience that traders expect from a centralized exchange.

In this two-part episode of Off the Block, we sit down with Leo, co-founder of Coin Academy, who identified Hyperliquid early and has followed its development closely. He explains how the protocol has moved from a niche trading tool to an infrastructure layer capable of supporting futures contracts (agreements to buy or sell an asset at a set price on a future date) on assets ranging from crypto to silver, crude oil, and pre-IPO company shares.

Part 1 covers the foundations: the post-FTX argument for self-custody, why Hyperliquid's community-first launch stands apart from most protocols, and the fee-burning tokenomics that create a self-reinforcing growth cycle.

Part 2 looks at where Hyperliquid is heading: new protocol upgrades called HIP-3 and HIP-4 that open the door to real-world assets (RWAs) and prediction markets, the regulatory engagement underway through the Hyperliquid Policy Center, and how the Hyper-EVM layer and AI integrations are designed to make the protocol a full financial platform.

Dive into the key moments from both episodes:

Part 1: The foundation

• 01:58 Leo's entry into crypto: gaming, skins, and bear market lessons
• 08:28 What Hyperliquid is and why it functions as a 24/7 trading super app
• 11:05 Self-custody vs. centralized exchanges after FTX
• 14:00 First interview with Hyperliquid co-founder Jeff: spotting a different approach
• 21:59 Why Hyperliquid launched without venture capital backing
• 26:36 How Hyperliquid's tokenomics put the community first
• 29:50 The operational flywheel: 12 people and a builder community

Part 2: The expansion

• 00:53 HIP-3: launching custom perpetuals markets
• 02:18 Real-world assets and TradeXYZ's position in the market
• 05:40 Beyond crypto: the vision for global finance
• 07:08 Market breakdown: silver, crude oil, and pre-IPO assets
• 11:41 HIP-4 prediction markets vs. Polymarket and Kalshi
• 21:59 Regulatory engagement and the Hyperliquid Policy Center
• 24:11 Hyper-EVM and AI integration
• 30:09 Community reward criteria and upcoming innovations

▶️ Listen to Part 1 and Part 2 of Off the Block with Leo (CryptoPicsou).

Want more conversations with the builders behind crypto's actively developing protocols? Subscribe to Off the Block, where we talk directly with the teams shaping onchain finance.

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FAQ

What is Hyperliquid?

Hyperliquid is a decentralized exchange (DEX) that lets users trade crypto perpetual futures directly from their own wallets, with no centralized intermediary holding their funds. A perpetual futures contract is an agreement to speculate on an asset's price with no fixed expiry date. Because users keep custody of their assets at all times, the exchange cannot freeze or lose customer funds the way a centralized platform can. Decentralized exchanges carry their own risks, including smart contract vulnerabilities and liquidity constraints.

Why did Hyperliquid not take venture capital funding?

Hyperliquid launched without allocating tokens to venture capital investors, a model sometimes called a "fair launch." All early token distribution went to the community and active users of the platform. This means there are no large institutional investors holding tokens at a discounted cost basis, which changes the incentive structure for token holders compared with most protocols. Whether this distribution model delivers better long-run outcomes is contested, and token values remain highly volatile.

What is the HYPE token and how does the fee-burning mechanism work?

HYPE is Hyperliquid's native token. A portion of the trading fees generated on the platform is used to buy back and permanently remove HYPE tokens from circulation, a process called "burning," which reduces total supply over time. This mechanism links platform activity directly to token supply dynamics. Token values are highly volatile and past performance is not a reliable indicator of future results. [INTERNAL LINK NEEDED: 21shares Hyperliquid Staking ETP product page]

Can Hyperliquid be used to trade assets other than crypto?

Hyperliquid is developing support for perpetuals markets on real-world assets (RWAs), including commodities such as silver and crude oil, and pre-IPO company shares, through a protocol upgrade called HIP-3. This capability is still in active development, and the availability and regulatory status of such instruments varies by jurisdiction. HIP-4 extends this further into prediction markets, where Hyperliquid aims to compete with existing platforms such as Polymarket and Kalshi.