Why is Hyperliquid more successful than other Perps?

Author: CM, Source: Twitter @cmdefi

Why @HyperliquidX is more successful than other Perps is the most discussed topic today. Let me talk about $HYPE from my personal experience.

1. From the perspective of technical mechanism

The method here is actually Vault. This mechanism is available on GMX and Jupiter, but Hyperliquid's Vault is an evolved version, with Protocol Vaults (HLP) and User Vaults, opening the door to diversification.

At the same time, due to the emergence of diversified Vaults, the problem of long-tail asset liquidity has also been solved. The transaction of long-tail assets is the core competitiveness of Perps dex against cex, and it is also a problem that many competitors have been exploring to solve.

Then there is the composability as a chain, which directly skips the process of transitioning from Protocol to Chain and goes straight to the finals, opening up space in valuation and imagination.

2. Market perspective

Here are a few plus points, which are actually worth learning from for many projects

(1) No financing, no pursuit of listing on a big exchange, and no deliberate spending on advertising. Taking a bottom-up approach is easier to gain favor in this round of the market.

(2) Very generous with airdrops.

(3) No PUA. Although there were disputes over score dilution in several stages in the early stage, it was generally clean and neat, and did not repeat tasks over and over again, and then NFT in an endless cycle.

(4) Positioning is based on the "chain", providing imagination and valuation space. Hyperliquid is actually a chain, so various defi and Perps combinations can be built on it, such as stablecoins, lending, etc., so a phenomenon appeared. At the beginning, everyone compared the valuation of some Perps dex with $HYPE, and gradually felt that it was not right, and began to compare it with the public chain. This alternative sense of gap in upward breakthrough once again drove market sentiment.

(5) Positioning as "Binance on the chain" is very topical, because DeFi protocols such as dex, lending, and stablecoins have basically gained a place in the market, and only the Perps track is still struggling. This also meets the expectations of the last piece of the DeFi puzzle.

Summary

The market is uncontrollable. It is difficult to replicate the right time, right place, and right people. The technical mechanism is certain. For now, there will be no major technological innovation in the future. Vault is to Perps what AMM is to Dex. dYdX has also recently introduced Vault. In the future, more micro-innovations may roll out various forms of Vault. The success of this mechanism has established the position of Perps, and it may no longer be the vase that looks promising but cannot develop.