Interview: When Shift Happens, compiled by Yuliya, PANews

"When Shift Happens" previously invited Hyperliquid Labs founder Jeff for an interview. Hyperliquid is a decentralized perpetual contract trading platform and a Layer 1 project. During the one-hour conversation, Jeff shared his entrepreneurial journey, project vision and observations on the DeFi industry. PANews compiled the interview content, covering the project's technological innovation, operating model, user experience improvement, etc., and also discussed the development trends and challenges of the cryptocurrency industry.

Entrepreneurship History

Moderator: Jeff, can you tell us how you embarked on the path of entrepreneurship?

Jeff: This starts from the beginning of 2020. At that time, I started working on some simple trading scripts, mainly on centralized cryptocurrency exchanges (CEX). Although many large market makers had already entered the market at that time, sometimes it is a good thing that "the ignorant are fearless". I just wanted to try it and see if I could make some money.

The initial results were promising, so I decided to get serious about it. To be honest, I was not very good at writing code before, but in order to achieve my goal, I started to teach myself programming. By 2022 we have grown to become one of the largest traders on many trading venues and probably one of the best in terms of high frequency market making.

Moderator: What prompted you to switch from successful quantitative trading to creating Hyperliquid?

Jeff: There are two main reasons:

First of all, we began to pay attention to the DeFi field and found many interesting protocol designs. There is an interesting phenomenon in DeFi: many people who do not understand finance are trying to build financial systems, which in turn brings many opportunities to quantitative strategies.

Secondly, the collapse of FTX was an important turning point. This incident made people really realize that they cannot blindly trust centralized exchanges. This is not an abstract theoretical discussion, but a real financial loss. For us, this is an important revelation—the world is finally ready for true DeFi.

Product Concept

Moderator: Can you explain in layman’s language what Hyperliquid does?

Jeff: From the perspective of human history, society has been developing in the direction of 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 earliest farms that needed to use weapons to protect themselves, to later being able to deposit money in banks, and now with Hyperliquid - you can completely control your own through encryption technology funds.

Specifically, we are building a system that can:

Meet all users expect from Web2 finance

Provide low fees

Support fast transfer

Achieve instant settlement

Provide comparable Liquidity on centralized exchanges

Allows trustless integration with other applications

Supports lending with collateral

Allows users to be truly free to use their own Funding

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 this has been done in DeFi or even the entire cryptocurrency space, 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 underlying reasons:

The cryptocurrency industry pays too much attention to short-term interests

If we want to create new financial methods, let VCs invest in them at an early stage Holding 50% of the network share will be a permanent stain

Our team has the ability not to rely on external financing, which allows us to stick to this decision

Industry perspective

Moderator: What do you think about the current situation? Is there any criticism from the cryptocurrency industry?

Jeff: To be honest, the most "successful" products in the current industry are often the issuance of fraudulent tokens. Very few projects truly follow a user-first model because acquiring real users is really difficult. Most projects take shortcuts: get investment from large market makers first and then attract transactions through incentive programs. This model is unsustainable in the long term.

Moderator: What do you think of the current status of the cryptocurrency industry?

Jeff: Although many people see cryptocurrency as a failed experiment, I think it is humanity’s only hope for reinventing the financial system. Finance is one of mankind’s greatest inventions, allowing us to:

Represent value in a more abstract way

Enable better capital allocation

Build A complete economic system

Without these, all other progress may not be possible. Human society may still be in the stage of farming or even gathering and hunting.

Software is supposed to revolutionize finance, but the reality is that finance (and probably healthcare) is one of the few large industries that hasn't experienced substantial innovation.

Technical Innovation

Moderator: Can you elaborate on the concept of Builder Codes?

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 exchange

Fiat currency deposit channel

Developers can:

Build your own exchange business

Use our neutral backend

Collect fees in a way users trust

Earn revenue directly at the protocol level , rather than relying on private agreements with centralized exchanges

This will open up a new way of building 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

Moderator: How do you view the long-term development of the project?

Jeff: I like to use Go and chess as an analogy. You don't need to be completely sure where you're going to end up, but make sure every step is in the right direction. The important thing is to take every step well, rather than being overly obsessed with the distant end. That's why we focus more on infrastructure development rather than short-term market performance.

Moderator: What is Hyperliquid’s long-term vision?

Jeff: Our core philosophy is:

Cryptocurrency will change the way finance operates

Traditional finance will eventually migrate to cryptocurrency

< p>Hyperliquid will become the basic platform for hosting these financial activities

The specific implementation path is difficult to predict, but this is not the most important thing. We focus on building infrastructure that will play an important role no matter how it develops in the future:

Builder Codes system

EVM integrated with native components on the chain

Sustainable high-quality liquidity

These are difficult but essential infrastructures. I believe that no matter how cryptocurrencies develop in 10 years, they will be an indispensable cornerstone.