Hyperliquid founder Jeff Yan has denied rumors to X that the platform is focused on protocol revenue, claiming they are pure FUD. He said recent ADL events have proven beneficial to users, generating hundreds of millions of dollars in combined profits. He said a backstop liquidation mechanism could have further increased HLP’s profits, but it would have also amplified its risks.
“On October 10, HyperLiquid ADL generated hundreds of millions of dollars in profits for its users by closing out profitable short positions at favorable prices. Had more positions been backstop liquidated, HLP could have earned hundreds of millions of dollars more in profits and losses while exposing itself to an irresponsible amount of risk,” he said.
He added that the ADL mechanism is structured in a way that reduces risks while allowing users to capture potential benefits that are returned to the system.
Meanwhile, ARK Invest CEO Cathie Wood praised Hyperliquid’s potential, comparing it to Solana’s early promise and calling it a “new kid on the block.” She described the project as exciting and reminiscent of Solana’s formative years, saying in a recent interview on the Master Investor podcast, “Solana has proven her worth and, you know, she’s with the big boys.”
Wood did not reveal his position on HyperLiquid, but said the protocol is something to watch. Her comments come as competition among perpetual futures DEXs has intensified since Aster launched its token this month, with its trading volume and open interest outpacing HyperLiquid.
Jeff mentioned that Hyperliquid’s ADL queues are very similar to those used in CEX.
jeff noticed Hyperliquid’s ADL queue follows the same logic as many centralized exchanges (CEX), combining leverage and unrealized P&L to determine deleveraging order.
He appreciated user feedback on ADL, adding that while valuable, many of the suggestions, such as offsetting correlated positions, would further complicate the system. He highlighted that other major venues typically do not have more complex ADL queue designs, and that simpler systems are more resilient and easier to understand for users.
In late September, the exchange debuted its native stablecoin USDH, which traded nearly $2 million during its launch period. The stablecoin is backed by cash and U.S. government securities, and leverages Stripe’s Bridge platform to manage its reserves. The exchange had previously already reduced spot trading fees by 80% to increase liquidity ahead of the stablecoin’s debut.
The USDH ticker race began on September 5th after Hyperliquid initiated a governance process to determine an issuer. Native Markets arrived early and pledged to issue a stablecoin on HyperEVM and allocate the proceeds of the reserve to HYPE buybacks and ecosystem development.
Shortly thereafter, bids poured in from Paxos, Sky, Frax Finance, Agora, Curve, OpenEden, BitGo, and Ethena, with the latter ultimately withdrawing in favor of Native Markets’ proposal.
StandX’s TVL exceeds $200 million
Meanwhile, Hyperliquid’s rival StandX crossed $200 million in total value locked (TVL) within a month, currently a world record for the platform. In addition to this milestone, StandX announced the kickstart of StandX Alpha. StandX Alpha allows early users to earn rewards just for signing up. The project was created by former members of Binance’s derivatives team and is designed to blend synthetic stablecoins with a decentralized perpetual exchange model.
On Saturday’s X post, Stand X announced“New ATH achieved: TVL $200 million in one month. StandX Alpha just went live. Prepare early to reap the potential rewards.”
Despite increasing competition, hyperliquid has become the latest fixture for both crypto traders and Wall Street. Despite being designed for perpetual futures and being much smaller than Coinbase and Binance, it has already outperformed Coinbase in certain areas, currently processing more than $6 trillion in industry trading volume per month.
Tarun Chitra, founder of Gauntlet, recently pointed out that the highest growth rates are occurring in the newest and least established markets, primarily because most existing participants do not yet understand their purpose.
