Hyperliquid Rising from the Ashes of FTX: Jeff Yan's "AWS for Finance" Dream

Original Title: How a Harvard grad helped make Hyperliquid the biggest new player in crypto—with just 11 people and no venture funding

Original Author: Ben Weiss & Leo Schwartz, Fortune

Original Compilation: SpecialistXBT, BlockBeats

Editor's Note: In the crypto world following the collapse of FTX, the market's craving for transparency and security has spurred the rise of a new generation of decentralized platforms. Among them, Hyperliquid has emerged as a dark horse in the fiercely competitive derivatives sector with its lean team of just 11 people and the unique philosophy of 'zero venture capital,' creating a staggering revenue miracle. This feature report by *Fortune* delves into how Harvard graduate founder Jeff Yan, with an extreme pursuit of technology, is challenging traditional financial giants, attempting to build the 'AWS of finance.' It also explores the regulatory clouds and future challenges this emerging giant faces on its path of rapid expansion.

The following is the original content:

Around 5 a.m., a sharp alarm jolted Jeff Yan awake. It was a specially set ringtone that only sounded when something unusual happened at Hyperliquid, the decentralized cryptocurrency exchange he co-founded. And on this early October morning, the situation was indeed extraordinary.

According to data from the cryptocurrency analytics site CoinGlass, that day, after U.S. President Donald Trump threatened new tariff sanctions against China, cryptocurrency traders watched as over $19 billion in leveraged positions (bets made by investors borrowing funds to amplify their wagers) evaporated in an instant. "I just stared at the screen, praying everything was okay," Jeff said of his exchange's system. Within an hour, he mobilized "every brain cell" to analyze the data, ultimately confident the platform was operating normally—it had successfully weathered a stress test where thousands of traders suffered losses while those shorting the market made a fortune.

In the following weeks, the crypto industry would dub the October 10th plunge a "flash crash." It was the largest liquidation event CoinGlass had ever monitored, and its ripple effects are still felt in the industry two months later. It was also one of the clearest signs yet that Hyperliquid has grown into a behemoth in the cryptocurrency space.

CoinGlass data shows the platform liquidated over $10 billion worth of positions that day, a figure far exceeding that of established crypto exchanges Bybit ($4.6 billion) and Binance ($2.4 billion). (Note: $10 billion refers to the total value of leveraged positions liquidated; the actual amount of money traders lost is lower.)

Major exchanges like Binance and Coinbase have thousands of employees. In contrast, Hyperliquid Labs, the parent company supporting the namesake exchange and blockchain, has just 11 employees. Yet, according to data from crypto analytics site DefiLlama, in just over two years, Hyperliquid has held its own against industry giants, with derivatives trading volume over the past month at approximately $140 billion. This translates to over $616 million in annualized revenue, and its associated cryptocurrency (called HYPE) has also risen to the top of the industry, with a market cap nearing $5.9 billion.

But Jeff wants Hyperliquid to be even bigger. "No one else is really trying to build something like this right now," he said. "This is something that can truly upgrade the financial system."

The Prodigies of the Crypto World

The cryptocurrency world has long been filled with flamboyant and outspoken figures. Jeff is not one of them. Wearing black-framed glasses with neat black hair and usually dressed in crisp shorts, he admits to feeling uncomfortable in the spotlight. "This celebrity treatment is foreign to me," he said, referring to the feeling of being surrounded by crowds at a recent crypto conference in Korea. While willing to discuss his background, he repeatedly emphasized that Hyperliquid is an ecosystem, not a one-man show.

Despite his self-proclaimed humility, it's clear Jeff has been crucial to the crypto protocol's rise. Born in the Bay Area, he was a typical prodigy. In high school, he won gold and silver medals at the International Physics Olympiad before attending Harvard University to study mathematics and computer science.

"He was always very calm, very thoughtful," said Vladimir Novakovski, also a Harvard graduate, who once interviewed Jeff for an internship at wealth management software company Addepar. (Novakovski later founded Lighter, an exchange competing with Hyperliquid. A Hyperliquid Labs spokesperson told *Fortune* that Jeff does not recall being interviewed by Novakovski.)

Around the time Jeff graduated from Harvard, the notorious cryptocurrency fraudster Sam Bankman-Fried (SBF) was rising to fame. SBF founded his own crypto trading firm, Alameda Research, and was also developing FTX—his crypto exchange specializing in perpetual contract trading. Perpetual contracts are derivatives that allow traders to bet on future prices without holding the asset itself. These contracts allow for leverage, amplifying both gains and losses.

Even as SBF captivated the entire crypto industry with his so-called genius rhetoric, Jeff and his team kept their distance, preferring to trade on platforms like Coinbase. "The relationship between Alameda and FTX wasn't clear to me," he said. "I didn't think it was worth the risk to expose any of our capital or strategies to that unclear relationship."

The Aftermath of FTX

FTX was a black box. SBF funneled billions in customer funds into lavish real estate purchases, high-risk venture capital, and political lobbying. It wasn't until FTX declared bankruptcy that customers discovered how much of their principal SBF had gambled away.

Jeff wanted to build a more transparent platform for crypto perpetual contracts (or "perps"). He and his team had considered building their own decentralized exchange even before FTX's collapse, but "the FTX event solidified my belief that the timing was right now," he said.

He was far from the first founder to envision a decentralized trading platform. There were a handful of others, like dYdX, offering crypto derivatives for risk-tolerant traders unwilling to venture into centralized exchanges like Coinbase. But these decentralized platforms were often clunky, difficult to use, and slow. "The user experience (UX) on centralized exchanges is very good, and almost all the trading volume happens on centralized exchanges, and in DeFi (decentralized finance), I think no one was really trying to reach that level at the time," Jeff said.

However, Jeff himself is a trader, and he and his team decided to build a platform they would want to use. "I think it's great when the people building the product are intimately familiar with who the customer is," said Novakovski, the crypto founder who interviewed Jeff.

According to a senior crypto executive who has met both founders, unlike SBF, Jeff's image is more polished, professional, and sincere. "Jeff gets haircuts, SBF didn't," said the source, who requested anonymity. "SBF's shorts were too long and didn't fit. Jeff looks crisp and neat."

Unlike SBF and countless other crypto founders, Jeff and his team decided to reject venture capitalist funding. They had already earned substantial income from their crypto trading business, and Jeff decided to cover the costs himself. "If we want to build a truly credibly neutral platform where everyone can build applications, a very important principle is not to have 'insiders,'" he said.

In 2023, Jeff and his team launched Hyperliquid and the blockchain it's built on. Trading volume grew steadily for months, according to DefiLlama data, but by early 2025, interest in the exchange exploded.

Hyperliquid is optimized for speed. For many traders, a difference of seconds can mean the difference between profit and loss. "I'm the user who's always pestering the team to add more features, but they keep rejecting every feature I request because they want to keep the platform extremely fast and flexible," said Thanos Alpha, an anonymous Hyperliquid user who describes himself as a heavy user of the platform.

The anonymous trader, who declined to give his real name, added that this speed, combined with engineering solutions that allow Hyperliquid to accommodate larger trades than its competitors, underpins its success. He said he is a loyal DeFi user but refused to disclose his real name—a common request among crypto die-hards.

Now, the ecosystem is attracting interest beyond anonymous crypto traders. According to *The Information*, major venture capital firms like Paradigm and Andreessen Horowitz (a16z) have taken positions in Hyperliquid's HYPE token. Even Wall Street and large corporations are taking notice. Fintech giant PayPal posted about Hyperliquid on social media, while a batch of companies is racing to launch Hyperliquid-branded stablecoins on the blockchain. David Schamis, founding partner of private equity firm Atlas Merchant Capital, is overseeing a publicly traded company hoarding HYPE. "This is not just about trading crypto," Schamis said of the blockchain technology.

The AWS of Finance

Jeff himself sees Hyperliquid as the Amazon Web Services (AWS) of financial infrastructure—the cloud computing giant that powers much of the internet. Developers are independently deploying different assets beyond cryptocurrencies for trading on the blockchain, including listed products tied to the stock prices of major companies like Nvidia and Google. And some validators (those who own the servers that actually process transactions) earn revenue by supporting the ecosystem.

However, there's no guarantee Hyperliquid will continue to expand, especially as competitors try to challenge its newly established dominance. This includes Novakovski, who later launched Lighter—a competing crypto derivatives platform backed by Founders Fund, Ribbit Capital, David Sacks' Craft Ventures, and a16z crypto. There's also Aster, a Hyperliquid imitator closely tied to crypto exchange Binance.

Furthermore, like many crypto projects in the DeFi world, Hyperliquid operates in a legal gray area. Its users are entirely anonymous, not required to submit documents for identity verification, unlike traders accessing more traditional financial products like Robinhood. Taylor Monahan, chief security researcher at crypto wallet MetaMask, alleged that users linked to North Korea, notorious for its crypto hacking operations, have traded on Hyperliquid. According to crypto analytics firm Chainalysis, DeFi protocols are part of North Korea's money laundering operations.

A Hyperliquid Labs spokesperson said Hyperliquid's website screens traders for risky behavior and enforces sanctions compliance, adding that "any confirmed high-risk activity on the application is immediately flagged and the relevant addresses are blocked."

Moreover, if Hyperliquid continues to grow, the ecosystem could invite more regulatory scrutiny. "The big question is how long they [Hyperliquid] will be allowed to operate in this KYC-less way," said a cryptocurrency market maker. KYC laws require financial institutions to collect user identity information. The market maker requested anonymity to speak more candidly.

"The bigger you get, the bigger that question usually becomes," the market maker added.

"We are actively engaging with regulators and policy stakeholders to support greater clarity for decentralized finance," the Hyperliquid spokesperson said in response.

As Hyperliquid navigates the evolving competitive landscape and regulatory environment, striving to realize Jeff's ambition of reshaping financial infrastructure, this DeFi founder will likely continue to expand his team. That's also why he announced hiring in late October, increasing the Hyperliquid Labs headcount by nearly 30%—from 11 to 14 people.

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