Author: Zuoye Waiboshan

"At first, no one cared about this transaction, it was just a farce, a "drag network cable", an extinction of an idea (decentralization), and a disappearance of L1. Until this disaster was closely related to everyone.

On March 26, Hyperliquid encountered a bloody crime caused by a Meme, which was exactly the same as the previous 50x giant whale's method. The giant whale gathered funds and used the "voidance" of the rules to attack HLP Vault.

This was originally a story between an attacker and Hyperliquid. Hyperliquid actually ate the opponent of the giant whale. PVP was transformed into PVH, and the loss of 4 million US dollars can only be a disease of scabies for the Hyperliquid protocol.

But Binance and OKX followed the $JELLYJELLY contract, which was a bit of a sign of killing you while you were sick. The reason was similar. If Hyperliquid could take advantage of the loss of the giant whale by relying on its capital volume, then Binance Exchanges can also rely on deeper liquidity to continue to bleed Hyperliquid until it loses blood and enters a death cycle similar to Luna-UST.

In the end, Hyperliquid chose to violate the concept of decentralization and choose to remove $JELLYJELLY, commonly known as "drag the network cable", admitting that it cannot afford to lose.

Review, Hyperliquid's response is the norm for CEX, and you can also make a judgment. After Hyperliquid, the on-chain ecosystem will gradually recognize this "new normal". Whether centralization is not important, and transparency in governance is more critical.

DEX does not require complete decentralization, but will be more transparent than CEX, reaching a certain degree of equilibrium between crypto culture and capital efficiency, and living your life.

"It is a dish to pull out the network cable, a bad pin is a bad, and being caught in market making is stupid.

According to the data of The Block, Hyperliquid has accounted for about 9% of Binance's contract trading volume for two consecutive months. This is the fundamental reason for Binance's fierce response, and has nipped the danger at the starting line. Hyperliquid has come out of the cradle.

Malls are like battlefields, and Binance was able to be on OKX DEX yesterday When it was removed from the shelves, Binance and OK were able to jointly attack under Hayek's big men, which has already shown the trend of the three separatist markets.

Recalling recent industry hotspots, on-chain agreements are difficult, and it is difficult to insist on decentralization. Polymarket acknowledged the result of the large players manipulating UMA oracle tampering, and the community was not satisfied; Hyperliquid finally "dragped the network cable" under Binance pressure and encountered repeated accusations from Bitget CEO and BitMEX Arthur Hayes.

First of all, they were right, Hyperliquid Choice is not an absolute decentralization concept, but capital efficiency and protocol security are preferred. Personally, Hyperliquid's decentralization level is not as good as Coinbase. After all, the latter is really strictly regulated, and Hyperliquid's true face is No KYC CEX as Perp DEX.

Secondly, Hyperliquid should be criticized in the dual identities of CEX and Perp DEX. All the problems of Hyperliquid have been experienced by CEX, including BitMEX of Arthur Hayes, who accused Hyperliquid of not being decentralized enough, 2020 3·12 If the network cable is not pulled out in the event, it may ruin the entire crypto industry.

Decentralization and centralization are a classic tram problem. To be decentralized, capital efficiency will inevitably be inferior to centralization. If you want to be centralized, you will not be able to attract free flow of capital.

Hyperliquid is actually a consensus, two business points:

Consensus is the HyperBFT algorithm and its materialized product Hyperliquid L1;

The businesses are HyperCore built on L1, which is a customized spot and contract exchange, which is basically controlled by Hyperliquid. In parallel, HyperEVM built on L1, which is the usual "EVM chain".

In this architecture, the cross-chain behavior of L1 and HyperCore/HyperEVM, and the interaction between HyperCore and HyperEVM are potential attack points, so the complexity of the organizational structure is also an inevitable move for the Hyperliquid project to control the disk at a high level.

In the Perp DEX sequence, Hyperliquid's innovation is not the innovation of the architecture, but the "slightly centralized" method to learn GMX's LP tokenization, and cooperate with the coin listing and airdrop strategies to continuously inspire market games and successfully seize the derivatives market firmly occupied by CEX.

Not for hyperliquid defends that this is the background color of Perp DEX. If you want to be absolutely decentralized, you cannot deal with the black swan event. You don’t have time to respond quickly. To respond efficiently, you must have a swordsman.

In fact, just like LooksRare did not overturn OpenSea, Blur finally overturned OpenSea. The centralization of everyone’s discussion is also hierarchical. Hyperliquid focuses more on the changes in the protocol. The focus of this article is not to be uncentralized in the debate, but to emphasize that capital efficiency will automatically prompt the new generation of on-chain protocols to do this - to be more centralized in exchange for capital efficiency.

"Hyperliquid's special feature is to exchange on-chain structure for CEX efficiency and token economics for liquidity, exchange for security with customized technology stack.

In addition to the technical architecture, the real danger of Hyperliquid is the existence of token economics. As mentioned earlier, Hyperliquid is a tokenized upgraded version of GMX LP. Users can share profits in the protocol revenue, thereby creating more liquidity and supporting the token price for the project party.

But the premise is that the project party must have sufficient control capabilities to maintain the normal operation of the agreement revenue, especially in the contract market supported by leverage. The revenue is also more dangerous while amplifying, which is also the biggest difference from spot DEXs such as Uniswap.

The above is the economic principle behind Hyperliquid's choice of a more centralized architecture. Currently, among the 16 nodes, Hyper Foundation controls 5, but in terms of staking, the total amount of Foundation accounts for 330 million Hypers, accounting for 78.54% of all nodes, far exceeding the majority of 2/3.

Recalling the security incidents in the past six months:

November 2024 V accused Hyperliquid of not centralized architecture: basically true

Early 2025: 50x Giant Whale: I made a mistake that every exchange will make, but transparency on the chain has become the target of public criticism

March 26, 2025: "Drag the network cable" to clear JELLYJELLY is completely true. The foundation controls the vast majority of voting rights. It is in the repeated games and confrontations that the decentralization concept has gradually bowed to the reality of capital efficiency. Hyperliquid has tried its best to reduce the evil deeds of VC, Airdrop, and internal liquidation (comparing the continuous sale of XRP founders), trying to retain the normal product form, and hope to make money by handling fees.

Compared to the NFT market, Perp DEX is a critical need on the chain, so I think hyperliquid will inevitably be marketedField acceptance.

But just as Bybit was stolen, the community doubted whether the exchange would make a fuss, and whether the mentality of the founder and team would change after Hyperliquid encountered a crisis is more worthy of attention. Should we insist on being snatched and pointed at by good people, or to join the exchange in conspiracy and further close the rules.

In other words, whether the tangled or not is deviated from the focus of the discussion, or you can think about whether the fully transparent protocol rules lead to the public hunting of the entire market is necessary for on-chain protocols, or will it lead to the process of on-chain migration backwards.

The real profound lesson or experience is: Should we follow the concept of decentralization or directly surrender to capital efficiency, just like this increasingly swaying world, the middle ground is already narrow.

Should we need partial centralization + transparent rules + intervention if necessary, or should we need 100% centralization + black box status + intervention at all times?

08 After the financial crisis, the United States directly rescued the market, which directly saved Wall Street without the consent of the taxpayer, exhausted the blood of the leeks, continued the veins of the flower street, and became the mother of the birth of Bitcoin. Now, Hyperliquid is just a replica of the old drama, but the role has become the on-chain Wall Street to be saved.

After the Hyperliquid crisis, the big V tortured one after another: from Arthur Hayes to AC, Hyperliquid must adhere to the concept of decentralization, which is also a continuation of the on-chain business war. AC once accused Ethena of the feasibility, and it did not prevent the two from standing on the same front today.

Once a chess player enters the game, he must be prepared to become a chess piece.

Whether on and off the chain, there must be absolute concepts and relative bottom lines.