Analyzing the trillion-dollar ambition of the Everything Exchange.

Written by: The Rollup

Translated by: Blockchain in Plain Language

Host: Hi Ryan. Can we quickly do an audio test?

Ryan: Sure, the sound seems completely normal now.

Host: Okay, the equipment is all set. Before we begin, I looked back at my experience of first buying HYPE with Robbie, reflecting that we actually didn't grasp that market surge to its fullest. At that time, experiencing two 80% pullbacks on an asset facing regulatory resistance was indeed panic-inducing. But we have been tracking this asset for over two years, and it has always been the core pillar of our portfolio. Fortunately, the portfolio has achieved significant excess returns in the bear market, and we retained all the full purchase records. You turned the whole situation around; as a friend of Chris Berniski, and a staunch HYPE super bull, we are very eager to hear your thoughts. Recently, Jeff released a proposal about HIP-3 Star, which is a new paradigm to push Hyperliquid into the US market. Where were you when Trump mentioned Hyperliquid in public? What was your reaction at that time?

Ryan: I was sitting in the same place, on a call with co-founder Dan. During the call, I received a lot of messages from the team, telling me that HYPE's price had skyrocketed to around $70. Just a few minutes earlier, it was around $59, and then the price shot up vertically. Initially, we had no idea why, and then we learned that Trump had directly mentioned Hyperliquid in a live televised press conference. It was indeed a crazy moment.

In fact, as early as July and August, Hyperliquid had deployed Star-related features 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 it takes an average of about three months for Hyperliquid to advance from the public testnet to the mainnet, and no more than six months, so we anticipated that this progress was brewing and about to land. Although we did not expect high-level politicians to mention the project publicly, the team had already made sufficient strategic preparations. Many previous investors’ biggest doubts about Hyperliquid were: "Data and growth are indeed excellent, but how will we cope if American regulators take restrictive measures?" This biggest obstacle is now being gradually eliminated. The US capital market is the largest and most important financial liquidity center in the world, and breaking through this barrier will open up a very high growth ceiling for Hyperliquid.

From Chain Dominance to "Everything Exchange": Reshaping Core Investment Arguments and Metrics Iteration

Host: Outstanding investors adjust their assumptions dynamically based on the latest information. Could you review the core logic when you initially established your position, and how your investment thesis and future outlook have evolved in light of the current developments?

Ryan: In the early stage of the project, the investment thesis was relatively pure and straightforward. At that time, its valuation was about $3 billion, with an annual revenue of approximately $200 million, and the business maintained a very high growth slope. At that time, there were almost no chips circulating in the market except for airdrop recipients; the only way to obtain Tokens was to bridge assets to Hyperliquid itself. This mechanism was strategically clever; any fund or individual hoping to build a position had to use the trading platform personally, which directly deposited real users for the platform, with no institution holding pre-set cheap shares. In the industry landscape at that time, it was already one of the top four applications and public chains in terms of revenue in the entire industry, and many of the peers ahead of it lacked long-term fundamental support. At that stage, the asset had extremely high re-evaluation space, even a three to five-fold increase still remained undervalued.

Meanwhile, we have been macro-level predicting the core assumption of "Everything Exchange," that is, to achieve free trading of any global asset on a permissionless public chain network, and derivatives as the core focus in the long-term track. In early 2025, through in-depth communication with the core trading teams and market-making units, I established a deep belief in intergenerational holding. The market has long had an inertial misconception: limiting on-chain perpetual contracts to stock competition within the Web3 native ecosystem. However, the real strategic goal is to penetrate into the global mainstream financial system, with the primary phase being to capture market share from leading centralized trading platforms such as Coinbase, Bybit, and BN, while the ultimate goal is to benchmark against traditional financial giants like CME. The core data we continuously monitor is not the share relative to on-chain competitors, but rather its proportion relative to BN and Bybit. This metric has steadily risen and continuously set historical highs, establishing a strong growth narrative.

Looking ahead, as the full-margin investment portfolio margin system, spot market, HIP-3, and compliance framework (regulated HIP-3 and HIP-4) are positioned in succession, Hyperliquid's underlying vision is gradually materializing: the platform will evolve into an ultimate place that allows users to trade any financial asset in any corner of the world using almost any mainstream asset as full collateral. This is a unique institutional advantage of blockchain architecture, unifying global assets for clearing and operating on the same underlying permissionless ledger. Currently, we are still in the very early stages of fulfilling this vast vision. Even looking solely at perpetual contracts, their trading scale's penetration rate in the global CFDs or retail options markets is less than 1%, while the cash flow and protocol income being generated are already quite remarkable.

When a protocol possesses strong endogenous compounding capabilities, investors should not be troubled by short-term fluctuations in individual monthly data but instead focus on long-term structural patterns. The past industry was filled with high liquidity fund rotations and cyclical speculation, rapidly going to zero once macro assets pulled back. Now, the industry is gradually moving into an irreversible structural track: the number of real traders and trading volumes settling on-chain is showing compound growth, and the actual commercial revenue captured by the underlying protocol is continuously expanding, making this one of the most certain long-term main lines in today's financial market.

Host: We completely agree with the view of breaking free from cyclical anxiety and over-concern with monthly income fluctuations. Before the earlier key news landed, when HYPE was fluctuating near $40, some market voices expressed doubt due to short-term transaction fee retracement, overlooking the deep fact that HIP-3's proportion in overall trading volume was steadily climbing. You initially focused on its market share relative to centralized trading platforms, later shifting to the penetration rate of traditional derivatives markets. Based on the current situation, what do you consider to be the core metrics that best represent the system's sustained compounding?

Ryan: Assessing this system cannot rely on a single metric; rather, a comprehensive metric matrix needs to be constructed: firstly, the changes in market share relative to top institutions like BN, Coinbase, and Bybit; secondly, the penetration ratio of the platform in terms of total global CFD, futures, and options trading volume; thirdly, the absolute growth rate of total platform trading volume and the compound growth rate of net income from protocol deposits; and fourthly, the net recharge capital flow and the growth curve of average on-chain account net assets. As long as these underlying operational metrics continue to achieve compounding growth, short-term secondary market price fluctuations are not to be feared, because the intrinsic value bottom of the system is being irreversibly elevated.

Decision on Barbell Strategy: The Winner-Takes-All of Real Income Cash Flow and Value Storage Assets

Host: We also adopted a barbell structure in asset allocation: one end heavily invests in on-chain businesses with strong commercial self-generating capabilities, broad long-term market potential (TAM), and sustainable token economics; the other end allocates purely value storage assets. We core positioned long in Bitcoin, gold, and HYPE and gradually expanded to applications generating actual cash flow, while excluding infrastructures lacking commercial barriers and excess L1/L2 intermediate layers from the portfolio. How do you view this cash flow-based allocation framework, similar to a traditional equity investment perspective? Additionally, what are your insights on the return of privacy assets like Zcash to the value storage discussion?

Ryan: High-quality on-chain businesses that essentially belong to the "profit machines" are reshaping the industry narrative. In the traditional physical financial system, the core purpose of a business organization is to generate real profits using capital. The crypto industry had long departed from this common sense, relying on false liquidity metrics and attention 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 should be clear that generating real income is just one expression of a healthy fundamental situation. Some businesses choose to retain generated cash flow and fully reinvest in ecological expansion instead of immediately allocating it to token holders, which is also a reasonable means of capital allocation. For example, Morpho's borrowing balance and real demand have shown a steep hockey-stick growth, and its founder has chosen to invest the generated value entirely in protocol expansion rather than opening the fee switch, which is highly rational during rapid development. The mechanism similar to Hyperliquid executes buybacks and destructions through completely transparent on-chain smart contracts, akin to Ethereum's deflationary clearing. Regardless of the approach, the core lies in whether the system continues to generate positive economic total value. This fundamental differentiation greatly enhances the clarity of asset discrimination, and as market capital gradually converges on a few truly well-functioning businesses, the entire investment logic will become very clear.

Host: As the market matures, the startup environment has become more brutal than before. In the past, founders could rely on narratives to raise capital even if they lacked underlying business support, but now institutions and secondary markets conduct extremely harsh horizontal comparisons: facing efficient business paradigms like Hyperliquid, Lighter, Pump, or Morpho, mediocre competitors can hardly gain attention and capital allocation. This makes asset selection clearer to a certain extent, but also forces startup teams to engage in direct confrontation on extremely hardcore fundamental dimensions.

Now, on the other side of the barbell strategy, regarding value storage assets like Bitcoin and Zcash, which inherently lack operational income and cash flow models, relying more on reflexivity and consensus mechanisms, how do you evaluate the evolution path of this segment?

Ryan: In the pure value storage market, the underlying competitive rules are extremely cruel "winner takes all" or "head absolute monopoly." Throughout human history of currency and precious metals evolution, gold occupies the vast majority of market capitalization share of tens of trillions of dollars, with secondary metals like silver lagging far behind, and subsequent tiers almost completely losing monetary premium. Blockchain, as a completely globalized and permissionless open competition market, will only manifest this power law more thoroughly, with typically only one or two beacons being able to cross cycles as value storage assets.

Bitcoin has unquestionably solidified its core position with its unbeatable first-mover advantage, the determinative cap of 21 million coins, and the global liquidity network. If one were to nominate potential synergistic competitors, the most qualified are not single-function forks that replicate the attributes of traditional currencies, but rather core underlying native assets that carry the largest scale of real economic activity, the highest liquidity depth, and collateral demand. As a value storage asset, a core necessary condition is that it must possess an extremely large holding community, extremely ample clearing depth, and universal collateral usability on a global scale, which typically can only be nurtured by top smart contract networks.

The early creation of Zcash by cypherpunks had a highly idealistic tone, but in several rounds of industry cycle changes, the pure geek vision has been somewhat marginalized. Currently, some market forces are trying to repackage it as an institutional-level "privacy Bitcoin" narrative, but from actual on-chain behaviors, very few capitals truly regard it as a high-frequency privacy currency or a daily value scale for accumulation. Privacy is inherently a functional module that can easily be implemented through upgrades within the technical stack of general-purpose smart contract public chains; without absolute liquidity depth, the market does not need a second Bitcoin with overlapping functional positioning. The currency system itself has a very strong network externality; once network effects settle at the top, it will continue to self-reinforce in a nonlinear manner.

Transparent Ledger and Social Trading: Redefining 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 ecology to "the largest MMORPG in the world." There has been a phenomenon in the market where many traders have become top public figures, and some individuals display extremely exaggerated unrealized profits and losses on public interfaces, attracting attention and generating returns that even surpass traditional top professional athletes. Is the explosion of social trading a short-term speculative frenzy or a paradigm shift in the native experience of on-chain finance?

Ryan: From the underlying logic, whether it’s Hyperliquid, Pump, or Solana, they all point to the same fundamental proposition: 24/7 operation, no-barrier entry, and global liquidity for free trading are currently blockchain technology's most irreplaceable killer applications. Once anyone globally is given low-friction tools to issue and trade assets, with the evolution of speculative cycles, it will inevitably give rise to large-scale financial gaming scenarios. Speculation is the endogenous spirit of the financial development history and will not disappear with the end of a cycle.

Past social trading was often fragmented: users discussed market trends and trading strategies on traditional social platforms, relying on third-party screenshots to prove performance, and then executed copy trading through complex cross-platform operations. The core paradigm innovation now lies in the whole experience being highly integrated into a unified native closed loop on-chain. Based on an immutable and completely transparent distributed ledger, the historical profits and losses, position changes, and entry points of any account are cryptographically verified; at the same time, smart contracts can support following orders to be executed as atomic transactions at the same moment. This level of transparency and verifiability, along with real-time settlement capabilities, is an institutional advantage that traditional centralized platforms cannot replicate.

In previous cycles, although there were also giant wealth myths, due to the lack of a unified identity aggregation protocol, on-chain excess returns often only manifested as a string of isolated anonymous hash addresses, unable to establish lasting social credibility. Now, the transparent on-chain ledger and persistent on-chain identity binding make individuals publicly displaying tens of millions of dollars in gains and losses highly contagious financial celebrities. This mechanism attracts massive capital and attention into the ecosystem for liquidity matching and strategy following. Although speculation driven solely by low-liquidity meme assets has cyclical and zero-sum characteristics, this product form of social trading demonstrates a strong extensibility for business.

Meme assets are an efficient wedge to attract public attention into the on-chain system. With infrastructure improvements, 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 the unified transparent ledger architecture, user groups are naturally differentiating and forming different risk preference investment communities; this vertical track's explosion is currently only in its initial stage.

On-chain Creator Economy and Financial Entertainment: The Next Generation of Super Brands and Paradigm Shift

Host: This new form has systematically reconstructed traditional on-chain speculation models. The industry was previously filled with high-threshold paid communities and copy-trading fraud, but now the real-time profits and losses verified on-chain have directly replaced hollow marketing buzzwords, becoming the objective proof of traders' credit ratings. Meanwhile, the introduction of creator incentive mechanisms and dynamic leaderboards directly stimulates the willingness of retail and market-making capital to enter. Many users, after witnessing the capital inflows and transparent holdings displayed on-chain, have their emotions quickly mobilized. However, ordinary investors often overlook the actual depth of the underlying liquidity pool and the gap between high unrealized gains and losses. How do you evaluate the strategic role of creator incentives in reconstructing this ecological mechanism?

Ryan: The creator reward mechanism is essentially a compliance and modern upgrade of the traditional paid community business model. In the traditional model, due to the lack of a performance audit mechanism, it often evolved into fraudsters without real profitability selling anxiety to information-weak groups; under the on-chain transparent mechanism, traders' profits and reputation directly depend on their real strategy effectiveness and user conversion rates. Top traders in the past often worried that disclosing strategies would lead to alpha decay, but now on-chain protocols provide certainty of returns for traders that even surpass their own position fluctuations by scaling back transaction fees and creator incentives. For instance, some leading platforms distribute rewards to high-quality strategy creators amounting to millions of dollars weekly, with annual capital accumulation exceeding a hundred million dollars, allowing top strategy providers to achieve millions of dollars in income just from creator shares.

This ecology is having a severe spillover: in addition to routine shares from token deployers, business collaborations within and outside the platform, exclusive market-making support, and invitations to offline top summits are elevating on-chain leading traders to high positions of super personal brands. More importantly, this underlying logic can be wholly reused across more diverse financial asset classes. Future on-chain experts will not be limited to leveraged traders but can also include senior credit analysts focusing on fixed income protocols, strategy traders on prediction markets, or allocation experts specializing in tokenized physical assets; the product boundaries of on-chain finance are infinitely extending.

In the highly interconnected digital world, "finance is content" has become an explicit trend. Even though a large number of users do not engage in high-frequency leveraged betting, they still maintain daily login behaviors related to relevant terminals, since the real-time fluctuations of on-chain assets, publicly verified wealth shuffles, and high-intensity long-short battles form highly sticky entertainment content. This network form, combining transparent financial settlement with high-frequency interaction, possesses both high entertainment attributes and attention stickiness; as more asset classes are incorporated into the on-chain clearing system, the growth curve of this industry narrative is just beginning 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 continually build a more solid bottom and challenge new highs in the secondary market, the development path of the entire track becomes increasingly clear. Thank you, Ryan, for today’s in-depth analysis and brilliant insights, and we look forward to witnessing your explorations and breakthroughs in the upcoming cycle evolution.

Ryan: Thank you for the invitation; it's a great honor to discuss these profound changes with everyone. See you next time.