Interview: When Shift Happens

Compilation: Yuliya, PANews

The interview for When Shift Happens previously invited Jeff, the founder of Hyperliquid Labs. Hyperliquid is a decentralized perpetual contract trading platform and also a Layer 1 project. In a one-hour conversation, Jeff shared his entrepreneurial journey, project vision, and observations on the DeFi industry. PANews has compiled the interview content, covering the project's technological innovation, operational model, user experience improvements, and also discussed the development trends and challenges in the cryptocurrency industry.

Entrepreneurial Journey

Host: Jeff, can you share with us how you embarked on the entrepreneurial path?

Jeff: Let's start from early 2020. At that time, I began researching some simple trading scripts, mainly focusing on centralized cryptocurrency exchanges (CEX). Although many large market makers had already entered the scene, sometimes "ignorance is bliss" can work in one's favor. I thought of trying my luck to make some money.

The initial research results were promising, so I decided to take this seriously. To be honest, I wasn't very skilled in coding before, but to achieve my goal, I started self-learning programming. By 2022, we had grown to become one of the largest traders on many exchanges, possibly one of the best in high-frequency market making.

Host: What prompted you to transition from successful quantitative trading to creating Hyperliquid?

Jeff: There were mainly two reasons:

First, we started paying attention to the DeFi space and discovered many interesting protocol designs. There's an intriguing phenomenon in DeFi: many non-financial experts are attempting to build financial systems, which in turn has brought many opportunities for quantitative strategies.

Second, FTX's breakdown was a significant turning point. This incident made people acutely aware that blind trust in centralized exchanges is a mistake. It was not some abstract theoretical discussion but a real loss of funds. For us, this was a crucial insight—the world is finally ready for true DeFi.

Product Concept

Host: Can you explain in simple terms what Hyperliquid is all about?

Jeff: From a historical perspective, society has always been moving towards individualism. Every step towards individualism, human rights, and similar progress has been positive in terms of outcome, whether measured by GDP or happiness.

Hyperliquid is continuing this trend: from the early days of needing weapons to protect one's farm, to later being able to store money in a bank, to now with Hyperliquid—you can have complete control over your funds through cryptographic technology.

Specifically, we are building a system that can:

· Meet all user expectations from Web2 finance

· Offer low fees

· Support fast transactions

· Enable instant settlement

· Provide liquidity comparable to centralized exchanges

· Allow trustless integration with other applications

· Support collateralized borrowing

· Empower users to truly freely use their funds

Funding Strategy

Host: Why choose not to accept any investment? This is uncommon in the industry.

Jeff: This is indeed not a traditional business project. It may be the first time in DeFi or even the entire cryptocurrency space to do this, but if you look at the example of Amazon, Bezos also did not profit from it for a long time in the early days.

We have several deep reasons for doing this:

· The cryptocurrency industry places too much emphasis on short-term gains

· If we are to create a new financial paradigm, having VCs hold 50% of the network in the early stages would be a permanent stain

· Our team has the capability to not rely on external funding, allowing us to stick to this decision

Industry Perspective

Host: Do you have any criticisms of the current cryptocurrency industry?

Jeff: To be frank, the most "successful" products in the industry currently are often issuing fraudulent tokens. Very few projects truly follow a user-first approach because acquiring real users is indeed challenging. Most projects take shortcuts: first securing investment from large market makers, then attracting trades through incentive programs. This model is unsustainable in the long run.

Host: How do you view the current state of the cryptocurrency industry?

Jeff: While many see cryptocurrency as a failed experiment, I believe it is humanity's only hope to reinvent the financial system. Finance is one of humanity's greatest inventions, allowing us to:

· Represent value in a more abstract way

· Achieve better capital allocation

· Establish a complete economic system

Without these, all other progress may have been impossible. Human society might still be stuck in the agricultural or even hunter-gatherer stage.

Software should be able to fundamentally transform finance, but the reality is that finance (and perhaps healthcare) is one of the few large industries that has not seen substantial innovation.

Technological Innovation

Host: Could you elaborate on the concept of Builder Codes?

Jeff: This is a simple yet powerful concept. It allows anyone to build financial applications on top of Hyperliquid, such as:

· Innovative mobile wallets

· Social trading platforms

· Regional exchanges

· Fiat onramps

Developers can:

· Build their exchange business

· Utilize our neutral backend

· Collect fees in a trustless manner

· Earn revenue directly at the protocol level, rather than relying on private agreements with centralized exchanges

This will unlock a new way of building businesses in DeFi, enabling specialization. Those who understand the specific needs of certain regions can focus on serving those users, while Hyperliquid provides support in the background.

Future Outlook

Host: How do you envision the long-term development of the project?

Jeff: I like to use the analogy of Go and chess. You don't need to be entirely sure where you'll end up, but you need to ensure that each move is in the right direction. It's crucial to make each step count rather than being overly fixated on a distant endpoint. That's why we are more focused on building infrastructure rather than short-term market performance.

Host: What is Hyperliquid's long-term vision?

Jeff: Our core idea is:

· Cryptocurrency will change the way finance operates

· Traditional finance will eventually migrate to cryptocurrency

· Hyperliquid will become the foundational platform hosting these financial activities

The specific path to realization is hard to predict, but that is not the most important part. We focus on building the infrastructure that will play a significant role regardless of how the future unfolds:

· Builder Codes system

· EVM integrated with on-chain native components

· Sustainable high-quality liquidity

These are challenging yet essential infrastructure components. I believe that no matter how cryptocurrency evolves in 10 years, they will be indispensable cornerstones.

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