Interview: When Shift Happens, compiled by Yuliya, PANews
The previous interview of "When Shift Happens" invited Jeff, the founder of Hyperliquid Labs. Hyperliquid is a decentralized perpetual contract trading platform and also a Layer 1 project. In the one-hour conversation, Jeff shared his entrepreneurial journey, project vision and observations on the DeFi industry. PANews compiled the content of the interview, covering the project's technological innovation, operating model, user experience improvement and other aspects, and also explored the development trends and challenges of the cryptocurrency industry.
Entrepreneurial journey
Host: Jeff, can you tell us how you got started on the road of entrepreneurship?
Jeff: This started in early 2020. At that time, I started to study some simple trading scripts, mainly focusing on centralized cryptocurrency exchanges (CEX). Although many large market makers had already entered the market at that time, sometimes "ignorance is fearless" is a good thing. I just wanted to try to make some money.
The initial results were promising, so I decided to do it seriously. To be honest, I didn't know how to code before, but in order to achieve my goal, I started to teach myself programming. By 2022, we have grown into one of the largest traders on many trading venues, and probably one of the best in high-frequency market making.
Host: What prompted you to switch from successful quantitative trading to creating Hyperliquid?
Jeff: There are two main reasons:
First, we started to pay attention to the DeFi field and found a lot of interesting protocol designs. There is an interesting phenomenon in DeFi: many people who don't understand finance are trying to build financial systems, which in turn brings a lot of opportunities for quantitative strategies.
Second, the collapse of FTX was an important turning point. This incident made people really realize that they can't blindly trust centralized exchanges. This is not an abstract theoretical discussion, but a real loss of funds. For us, this is an important revelation-the world is finally ready to accept real DeFi.
Product Concept
Host: Can you explain in layman's terms what Hyperliquid does?
Jeff: From the perspective of human history, society has been moving towards individualism. Every progress towards individualism, human rights, etc., is positive in terms of results, whether measured by GDP or happiness.
Hyperliquid is continuing to push this direction: from the earliest need to use weapons to protect your farm, to later being able to deposit money in the bank, to the current Hyperliquid - you can fully control your funds through encryption technology.
Specifically, we are building a system that can:
Meet all the expectations of users for Web2 finance
Provide low fees
Support fast transfers
Achieve instant settlement
Provide liquidity comparable to centralized exchanges
Allow trustless integration with other applications
Support lending with collateral
Allow users to truly use their funds freely
Financing strategy
Moderator: Why choose not to accept any investment? This is rare in the industry.
Jeff: This is indeed not a commercial project in the traditional sense. This may be the first time that DeFi or even the entire cryptocurrency field has done this, but if you look at the example of Amazon, Bezos did not profit from it for a long time in the early days.
We did this for several deep reasons:
The cryptocurrency industry is too focused on short-term interests
If you want to create a new financial method, it will be a permanent stain to let VC hold 50% of the network share in the early stage
Our team has the ability to not rely on external financing, which allows us to stick to this decision
Industry Views
Moderator: Do you have any criticisms of the current cryptocurrency industry?
Jeff: To be honest, the most "successful" products in the industry are often the issuance of fraudulent tokens. Few projects really follow the user-first model because it is really difficult to acquire real users. Most projects take shortcuts: first get investment from large market makers, and then attract transactions through incentive plans. This model is unsustainable in the long run.
Moderator: What do you think of the current state of the cryptocurrency industry?
Jeff: Although many people see cryptocurrency as a failed experiment, I think it is the only hope for mankind to reinvent the financial system. Finance is one of the greatest inventions of mankind, it allows us to:
Represent value in a more abstract way
Achieve better capital allocation
Build a complete economic system
Without these, all other progress may not be possible. Human society may still remain in the farming or even gathering hunting stage.
Software should be able to revolutionize finance, but the reality is that finance (and possibly healthcare) is one of the few large industries that has not experienced substantial innovation.
Technological Innovation
Host: Can you elaborate on the concept of Builder Codes?
Jeff: It's a simple but powerful concept. It allows anyone to build financial applications on top of Hyperliquid, such as:
Developers can:
Build your own exchange business
Use our neutral backend
Charge fees in a way that users trust
Get revenue directly at the protocol level, rather than relying on private agreements with centralized exchanges
This will open up a whole new way to build businesses in DeFi, making specialization possible. People who understand the needs of users in a specific region can focus on serving those users, while Hyperliquid provides support in the background.
Future Outlook
Moderator: How do you see the long-term development of the project?
Jeff: I like to use Go and chess as an analogy. You don't need to be completely sure where you're going to end up, but make sure every step is in the right direction. It's important to take every step well, rather than being overly obsessed with the distant end. That's why we focus more on infrastructure construction rather than short-term market performance.
Moderator: What is Hyperliquid's long-term vision?
Jeff: Our core philosophy is:
Cryptocurrency will change the way finance works
Traditional finance will eventually migrate to cryptocurrency
Hyperliquid will become the underlying platform for these financial activities
The specific implementation path is difficult to predict, but this is not the most important thing. We focus on building infrastructure that will play an important role no matter how the future develops:
These are difficult but essential infrastructures, and I believe that no matter how cryptocurrencies develop in 10 years, they will be indispensable cornerstones.
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