Interview: When Shift Happens
Compiled by: Yuliya, PANews
When Shift Happens previously interviewed 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 projects technological innovation, operating model, user experience improvement, and other aspects, and also discussed the development trends and challenges of the cryptocurrency industry.
Entrepreneurial journey
Host: Jeff, can you tell us how you got into entrepreneurship?
Jeff: It all 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 bliss is a good thing. I thought about trying to make some money.
The initial results were promising, so I decided to do it seriously. To be honest, I didnt know how to code before, but in order to achieve my goal, I taught myself programming. By 2022, we have grown into one of the largest traders on many trading venues, and probably one of the best at high-frequency market making.
Host: What motivated you to move 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 many 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 many opportunities for quantitative strategies.
Secondly, the collapse of FTX was an important turning point. This incident made people realize that they cannot 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 laymans 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 initial 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:
Meet all users expectations for Web2 finance
Provide low fees
Support fast transfer
Realize instant settlement
Providing liquidity comparable to centralized exchanges
Allows trustless integration with other applications
Supporting lending with collateral
Allow users to use their funds freely
Financing Strategy
Moderator: Why did you 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 do this for several reasons:
The cryptocurrency industry is too focused on short-term gains
If you want to create a new financial model, letting VCs hold 50% of the network share in the early stage will be a permanent stain
Our teams ability to not rely on external financing allowed us to stick to this decision
Industry perspective
Host: 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 truly follow the user-first model because it is really difficult to acquire real users. Most projects take shortcuts: first obtain investment from large market makers, and then attract transactions through incentive plans. This model is unsustainable in the long run.
Host: What do you think of the current state of the cryptocurrency industry?
Jeff：While many people see cryptocurrency as a failed experiment, I believe it is humanity’s only hope to reinvent the financial system. Finance is one of the greatest inventions of mankind, allowing us to:
Representing value in a more abstract way
Achieving better capital allocation
Establishing a complete economic system
Without these, all other progress may not be possible. Human society may still remain in the farming or even gathering and hunting stage.
Software is supposed to revolutionize finance, but the reality is that finance (and possibly healthcare) is one of the few large industries that is not experiencing substantial innovation.
Technological innovation
Host: Can you explain the concept of Builder Codes in detail?
Jeff：It’s a simple but powerful concept. It allows anyone to build financial applications on top of Hyperliquid, such as:
Innovative mobile wallet
Social Trading Platform
Regional Exchanges
Fiat currency deposit channel
Developers can:
Build your own exchange business
Use our neutral backend
Charge fees in a way that users trust
Earn 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
Host: How do you view the long-term development of the project?
Jeff: I like to use the analogy of Go and chess. You dont need to be completely sure where youre going to end up, but make sure every step is in the right direction. Its important to take every step well, rather than being overly obsessed with the distant end. Thats why we focus more on infrastructure construction rather than short-term market performance.
Host: 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 basic platform for these financial activities
The specific implementation path is difficult to predict, but that is not the most important thing. We focus on building infrastructure that will play an important role no matter how the future develops:
Builder Codes System
EVM integrated with native components on the chain
Sustainable high-quality liquidity
These are all difficult but necessary infrastructures to get right, and I believe they will be essential building blocks no matter how cryptocurrencies evolve in 10 years.
