The decentralized exchange Hyperliquid has once again found itself in the spotlight, but this time for a different reason. Founder Jeff Yan took to social media this week to address growing speculation about the platform’s focus on protocol profits, calling the claims “nonsense” and reaffirming that Hyperliquid’s systems are designed to protect traders, not enrich the protocol.
Yan pointed to recent automatic deleveraging (ADL) events as proof that the platform’s risk engine serves its users first. On October 10, he noted, traders made “hundreds of millions” in gains after profitable short positions were closed automatically at optimal prices. According to Yan, the platform could have earned even more revenue had it relied on backstop liquidations – but that would have meant amplifying risk to dangerous levels.
“The ADL system lets profits stay with users while keeping exposure under control,” he said, adding that Hyperliquid’s queue-based mechanism is deliberately modeled after centralized exchanges but kept simpler for reliability and transparency.
Risk Over Revenue
Yan also hinted at ongoing discussions with the community about potential ADL improvements but pushed back against proposals to add complex correlation checks or secondary queues. “The more moving parts you add, the more fragile the system becomes,” he remarked, arguing that simplicity remains the foundation of stability in extreme market conditions.
The exchange’s design has drawn attention from across the industry – including from Cathie Wood, CEO of ARK Invest, who described Hyperliquid as “the new kid on the block” during a recent podcast interview. While she didn’t confirm any investment, Wood compared its trajectory to Solana’s early rise, suggesting it could become a defining player in decentralized derivatives.
Competition Heats Up in the Perps Arena
Hyperliquid’s success has made it a benchmark for newer perpetual DEXs. Aster, which launched its token earlier this month, briefly overtook Hyperliquid in both volume and open interest, signaling an increasingly competitive landscape.
Meanwhile, StandX, a project built by former Binance derivatives engineers, reported surpassing $200 million in total value locked (TVL) just one month after launch. The team celebrated the record with the launch of StandX Alpha, a reward initiative for early participants.
Stablecoin Launch and Ecosystem Growth
In parallel, Hyperliquid’s ecosystem continues to expand. Its native USDH stablecoin, launched in late September, processed nearly $2 million in trades during its first days. Backed by cash and U.S. government securities, USDH relies on Stripe’s Bridge platform to manage reserves securely.
The asset’s issuance followed a governance process that drew bids from major players including Curve, Paxos, Frax Finance, and BitGo. Ultimately, Native Markets won the mandate, pledging to channel part of reserve income into HYPE buybacks and ongoing ecosystem development.
Hyperliquid had already cut its spot fees by 80% in preparation for the launch, aiming to attract liquidity and fortify its position ahead of intensifying competition in decentralized finance.
A New Power Center in Crypto Derivatives
Despite being far smaller than centralized giants like Binance or Coinbase, Hyperliquid has achieved extraordinary performance metrics – even outpacing Coinbase in select trading categories. Monthly trading volumes across the perpetuals sector now exceed $6 trillion, and Hyperliquid’s growth suggests decentralized venues are becoming the new battleground for derivatives traders.
As Gauntlet founder Tarun Chitra observed, the biggest opportunities are emerging in the youngest markets – where innovation is moving faster than understanding. For Hyperliquid, that uncertainty may be its greatest advantage.
