Author: The Rollup

Translator: White Talk Blockchain

Host: Ryan, hello. Can we do a quick audio test?

Ryan: Sure, the sound is perfectly normal now.

Host: Great, the equipment is set up. Before we begin, I reviewed my experience with Robbie when we first bought HYPE and reflected that we didn’t fully capitalize on that wave of the market. At that time, experiencing two 80% pullbacks on an asset facing regulatory resistance did indeed cause panic. However, we have tracked this asset for over two years, and it has always been a core pillar of our portfolio. Fortunately, the portfolio achieved significant excess returns in the bear market, and we have retained complete proof of our investments. You turned the whole situation around. As a friend of Chris Berniski and a strong HYPE bull, we are eager to hear your thoughts. Recently, Jeff released a proposal for HIP-3 Star, which is intended to push Hyperliquid into the U.S. market. Where were you when Trump mentioned Hyperliquid in public? What was your reaction?

Ryan: At that moment, I was sitting in the same spot, talking with co-founder Dan. During the call, I received numerous messages from the team telling me that the price of HYPE had skyrocketed to around $70. Just a few minutes before that, it was about $59, and then the price shot up vertically. Initially, we had no idea why this was happening until we learned that Trump mentioned Hyperliquid directly at a televised news conference. It was indeed a crazy moment.

In fact, as early as July and August, Hyperliquid deployed functionality related to Stars on the public testnet for the first time. The team only pushes core features to the public testnet when they hope the public will start experimenting and preparing. Data analysis shows that moving from the public testnet to the mainnet takes an average of about three months, not exceeding six months at most, so we anticipated that this progress was brewing and about to land. Although we did not expect political figures to publicly mention the project, the team had strategically prepared in advance. Many past investors’ core skepticism about Hyperliquid was: “The data and growth are indeed excellent, but how to respond if U.S. regulations impose restrictions?” Now this biggest obstacle is gradually being removed. The U.S. capital market is the largest and most important financial liquidity center in the world, and breaking through this barrier opens up a very high growth ceiling for Hyperliquid.

From On-Chain Dominance to “Anything Trading Platform”: Reshaping Core Investment Arguments and Indicator Iteration

Host: Excellent investors adjust their hypotheses dynamically based on the latest information. Can you review the core logic you established when initially building your position, and how your investment argument and future outlook have evolved in light of the current developments?

Ryan: In the early stages of the project, the investment argument was relatively pure and straightforward. At that time, its valuation was about $3 billion, and annual revenue had reached approximately $200 million, with the business maintaining an extremely high growth slope. At that time, there was almost no liquidity in the market aside from airdrop recipients; the only way to acquire Tokens was to bridge assets directly to Hyperliquid. This mechanism was strategically brilliant, as any fund or individual wanting to build a position had to use the trading platform, directly establishing real users for the platform, with no institutions holding predetermined cheap shares. In the industry landscape at that time, it was already one of the top four applications and public chains in terms of overall revenue, while many of the more well-known projects ahead of it did not have lasting fundamental support. At that stage, the asset had significant revaluation potential, and even a three to five times increase would still be considered undervalued.

Meanwhile, we have consistently been iterating on the core hypothesis of an "Everything Trading Platform" at a macro level—that is, realizing free trading of any global asset on a permissionless public chain network, with derivatives as the core focus of a long-term track. By early 2025, through in-depth conversations with core trading teams and liquidity providers, I established a deep conviction in generational holding. The market has long harbored an inertia misconception: limiting on-chain perpetual contracts to competition within the Web3 native ecosystem. However, the true strategic goal is to penetrate the mainstream global financial system, with the initial phase being to capture market share from leading centralized trading platforms such as Coinbase, Bybit, and Binance, with the ultimate aim of benchmarking against traditional financial giants like CME. The core data we monitor is not the share relative to on-chain competitors but its proportion relative to Binance and Bybit. This metric has steadily risen and continuously refreshed its historical highs, establishing a robust growth narrative.

Looking ahead, with the full-margin portfolio margin system, spot market, HIP-3, and compliance framework (regulated HIP-3 and HIP-4) being established, Hyperliquid's underlying vision is gradually taking shape: the platform will evolve into an ultimate place that allows users to trade any financial asset in the world, using almost any mainstream asset as full collateral. This is a unique institutional advantage of the blockchain architecture, unifying global assets for clearance and operating on the same underlying permissionless ledger. We are still at a very early stage in realizing this grand vision. Even looking solely at perpetual contracts, their trading scale accounts for less than 1% of the global CFD or retail options volume, while the cash flow and protocol revenues generated are already quite impressive.

When a protocol has strong endogenous compound growth capability, investors should not be troubled by short-term monthly data fluctuations but instead focus on long-term structural patterns. The industry had previously been rife with high liquidity funding cycles and periodic speculation, which rapidly returned to zero once macro assets corrected. Now, the industry is gradually transitioning into an irreversible structural track: the number of real traders and trading volume cleared on-chain grows at a compound rate year after year, and the actual business revenues captured by the underlying protocols continue to amplify, making this one of the most certain long-term mainlines in the current financial market.

Host: We completely agree with the view of freeing oneself from cyclical anxiety and over-focusing on monthly income fluctuations. Before the earlier key news landed, when HYPE oscillated around $40, some market voices began to express doubts due to a short-term fee retreat, neglecting the underlying fact that HIP-3’s share in overall trading volume was steadily rising. You initially focused on its market share relative to centralized trading platforms, later shifting to its penetration rate in the traditional derivatives market. Based on the current perspective, what is the core indicator you value most, which best represents the system's continuous compounding?

Ryan: Assessing this system cannot rely on a single indicator but requires constructing a comprehensive indicator matrix: first, changes in market share relative to top institutions like Binance, Coinbase, and Bybit; second, the penetration rate of the total volume of global CFDs, futures, and options traded on the platform; third, the absolute growth rate of total platform trading volume combined with the compound growth rate of net revenue captured by the protocol; fourth, the net recharge fund flows and the growth curve of average on-chain account net asset value. As long as these underlying operational indicators continue to realize compounded growth, short-term price fluctuations in the secondary market will be insignificant, because the intrinsic value bottom of the system is being irreversibly raised.

The Choice of Barbell Strategy: The Winner Takes All of Real Income Cash Flow and Value-Storing Assets

Host: We have also adopted a barbell structure in our asset allocation: one end heavily invests in on-chain businesses with strong commercial self-generating capacities, broad long-term potential market space (TAM), and sustainable token economics; the other end allocates purely value-storing assets. We have core positions in Bitcoin, gold, and HYPE, and are gradually expanding towards generating actual cash flow in application scenarios while excluding infrastructure lacking business barriers and excessive L1/L2 intermediaries from the portfolio. How do you view this cash flow-based allocation framework, similar to traditional equity investment perspectives? Additionally, what insights do you have regarding the re-emergence of privacy assets like Zcash in the value-storing discussion?

Ryan: High-quality on-chain businesses that are essentially “profit machines” are reshaping the industry narrative. In the traditional physical financial system, the core purpose of commercial organizations is to create real profits using capital. The crypto industry long deviated from this common sense, relying on false liquidity metrics and attention-based games to drive valuation reconstruction. With changes in the macro environment, crypto assets are no longer the only speculative outlet for global excess liquidity; any protocol must prove its holding value and fundamental support.

It needs to be clarified that generating real income is just one form of healthy fundamentals. Some businesses choose to retain the cash flow generated and invest it fully into ecological expansion, rather than immediately distributing it to token holders, which is also a reasonable capital allocation method. For instance, Morpho's borrowing balances and real demand continue to display a hockey-stick-like steep growth, and its founders have chosen to fully invest the generated value into protocol expansion rather than opening the fee switch, which is highly rational during the high-growth phase. In contrast, mechanisms like Hyperliquid programmatically execute buybacks and burns through completely transparent on-chain smart contracts, akin to Ethereum's deflationary clearance. Regardless of the method, the core lies in whether the system is continuously creating positive economic total value. This fundamental differentiation greatly enhances the clarity of asset identification. As market capital gradually converges on a few genuinely well-operating businesses, the overall investment logic will become very clear.

Host: As the market matures, the entrepreneurial environment is becoming more brutal than before. In the past, founders could rely on narratives to raise capital even without underlying business support, but now institutions and secondary markets conduct extremely stringent horizontal comparisons: facing efficient business paradigms like Hyperliquid, Lighter, Pump, or Morpho, mediocre competitors find it difficult to attract attention and capital allocation. This has made asset selection somewhat clearer, but it also forces startup teams to confront extremely core fundamentals directly.

So on the other side of the barbell strategy, for assets like Bitcoin and Zcash, which have value-storing attributes but lack operational income and cash flow models, relying more on reflexivity and consensus mechanisms, how do you evaluate the evolution path of this sector?

Ryan: In the purely value-storing market, the underlying competition law is an extremely brutal “winner takes all” or “absolute monopoly at the top.” Throughout the thousands of years of evolution of currency and precious metals, gold has captured the majority of market value share worth hundreds of thousands of billions, while secondary metals like silver have been left far behind, and subsequent tiers have almost completely lost monetary premiums. In a completely globalized and permissionless open competition market like blockchain, this power law will only be reflected more thoroughly, and the value-storing assets that can transcend cycles typically have only one or two beacons.

Bitcoin, with its unassailable first-mover advantage, the definitive hard cap of 21 million coins, and a global liquidity network, has undeniably solidified its core position. If potential synergistic competitors are to be identified, the most qualified are not single-function fork coins that merely replicate traditional currency attributes, but the core underlying native assets of public chains that carry the largest scale of real economic activity, the deepest liquidity, and collateral demand. As value-storing assets, their core necessary condition is to have an extremely large holding community, abundant clearing depth, and global collateral universality, which often can only be nurtured by top smart contract networks.

The idealistic essence of the cryptopunks who built Zcash in its early stages has been somewhat marginalized through several rounds of industry cycle changes. Currently, some market forces are attempting to repackage it as an institutional-level "privacy bitcoin" narrative, but from the perspective of actual on-chain behavior, very few capital amounts truly regard it as a high-frequency privacy currency or a daily value measure for accumulation. Privacy is functionally a module that can be implemented through upgrades in the technology stack of universal smart contract public chains; in the absence of absolute liquidity depth, the market does not need a second overlapping-function bitcoin. The monetary system itself possesses strong network externalities, and once network effects settle at the top, they will continue to self-reinforce in a nonlinear manner.

Transparent Ledgers and Social Trading: Reshaping Global On-Chain Finance as an MMORPG

Host: In your recent long article on the evolution of social trading, you compared the current on-chain trading ecosystem to the "largest MMORPG game in the world." There has been a phenomenon in the market where many traders have become top public figures, with some individuals displaying exaggerated unrealized gains and losses in public interfaces, whose attention-grabbing power and income scale even exceed those of traditional top athletes. Is the explosion of social trading a temporary speculative frenzy or a paradigm shift in the native experience of on-chain finance?

Ryan: From a fundamental logic perspective, whether it's Hyperliquid, Pump, or Solana, the core points to the same fundamental proposition: around-the-clock operation, no barriers to entry, and global liquidity for free trading is currently the most irreplaceable killer application of blockchain technology. Once any global individual is given low-friction tools to issue and trade assets, alongside the evolution of speculative cycles, it will inevitably lead to the emergence of large-scale financial gaming scenarios. Speculation is an endogenous spirit of the financial development history and will not disappear with the end of the cycle.

In the past, social trading was often disjointed: users would discuss market conditions and trading strategies on traditional social platforms, relying on third-party screenshots to prove outcomes, and then executing copy trades through complex cross-platform operations. The current core paradigm innovation lies in the entire experience being highly integrated into a unified native closed loop on-chain. Based on immutable and fully transparent distributed ledgers, the historical gains and losses, position changes, and entry points of any account are cryptographically verified; at the same time, smart contracts enable follow-up instructions to be accurately executed in atomic transactions at the same moment. This transparency and verifiability, along with real-time clearing capabilities, are institutional advantages that traditional centralized platforms cannot replicate.

While past cycles also had wealth myths, due to the lack of a unified identity aggregation protocol, on-chain excess returns typically manifested as a string of isolated anonymous hash addresses, making it impossible to establish long-term social credibility. Now, the transparent on-chain ledger and persistent on-chain identity binding allow individuals displaying millions of dollars in gains and losses to become financial celebrities with strong transmissive attributes. This mechanism attracts vast amounts of capital and attention into ecosystems for liquidity matching and strategy following. Although relying solely on low-liquidity meme assets driven speculation has cyclical and zero-sum characteristics, the product form of social trading has shown extreme commercial extensibility.

Meme assets are efficient wedges that draw public attention into on-chain systems. As infrastructure improves, the application scenarios of social trading are rapidly expanding from high-risk memes to mature perpetual contracts, tokenized equity assets, and even traditional financial derivatives. Under a unified transparent ledger framework, user groups are naturally differentiating and forming investment communities with different risk preferences; the explosion of this vertical track is currently just in its initial stages.

On-Chain Creator Economy and Financial Entertainment: Next Generation Super Brands and Paradigm Shift

Host: This new form has systematically reconstructed the traditional on-chain speculative model. The industry was previously filled with high-threshold paid communities and copy trading fraud, but now, real-time earnings and losses verified on-chain have directly replaced hollow marketing rhetoric, becoming objective proof of traders' credit ratings. Meanwhile, the introduction of creator incentive mechanisms and dynamic leaderboards has directly stimulated both retail and market-making capital's willingness to enter. Many users, after witnessing the publicly displayed swelling of funds and transparent accumulation on-chain, have their emotions swiftly mobilized. Yet ordinary investors often overlook the actual depth of the underlying liquidity pool and the slippage gap between high unrealized gains and losses. How do you assess the strategic role of creator incentives in reconstructing this ecological mechanism?

Ryan: The creator reward mechanism is essentially the compliance and modernization upgrade of traditional paid community business models. In the traditional model, due to the lack of performance auditing mechanisms, it often devolves into a scenario where profitless fraudsters sell anxiety to information-vulnerable groups; however, under transparent mechanisms on-chain, traders' earnings and reputations directly depend on the actual effectiveness of their strategies and user conversion rates. Top traders used to worry that making strategies public would lead to alpha decay, but today, on-chain protocols provide certainty returns that even surpass their own position volatility by scaling back trading fees and creator incentives. For example, on some leading platforms, rewards distributed weekly to quality strategy creators amount to millions of dollars, with annual capital accumulation exceeding $100 million, allowing top strategy providers to generate millions of dollars in income solely from creator shares.

This ecology is spilling over dramatically: beyond the routine shares for token deployers, business collaborations inside and outside the platform, exclusive market-making support, and invitations to offline top summits are pushing on-chain top traders into the high realm of super personal brands. More importantly, this underlying logic can be reused across more diverse financial asset classes. Future on-chain experts will not be limited to leveraged traders but can also be veteran credit analysts focused on fixed income protocols, strategy operators in prediction markets, or allocation experts specializing in tokenized physical assets; the product boundaries of on-chain finance are infinitely extending.

In a highly interconnected digital world, “finance is content” has become an overt trend. Even if many users do not engage in high-frequency leveraged games, they still maintain daily login behavior to relevant terminals because the real-time fluctuations of on-chain assets, the public verification of wealth reshuffling, and the high intensity of longs and shorts create highly sticky entertainment content. This network form, combining transparent financial clearance and high-frequency interaction, possesses both high entertainment properties and attention stickiness, and with richer asset classes being included in the on-chain clearing system, the growth curve of this industrial narrative has just begun to emerge.

Host: Indeed, the deep binding of on-chain performance and personal IP is reshaping the entire industry's employment forms and attention distribution rules. As core assets like HYPE continue to build a solid bottom in the secondary market and push new highs, the development path for the entire sector is becoming increasingly clear. Thank you, Ryan, for your in-depth insights and enlightening perspectives today. We look forward to witnessing your exploration and breakthroughs in the upcoming cycle evolution.

Ryan: Thank you for the invitation. It is a great honor to discuss these deep changes with everyone. Until next time.

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