A 10,000-word deep dive into Hyperliquid: How an 11-person, zero-VC team dominates the perpetual on-chain market?

Conflict of Interest Disclosure: This article was not paid for.

One of the most surprising stories in the crypto industry over the past two years originates from a small team based in Singapore, which for a long time consisted of just over ten employees.

This company, founded only three years ago and now valued at tens of billions of dollars, never took a single dollar of VC funding. Last year, its 11 employees generated over $900 million in profit, making it one of the highest profit-per-employee companies on Earth.

The Founder Who Doesn't Network, Tweet, or Speak Out

The story of Hyperliquid revolves almost entirely around one person—Jeff Yan (@chameleon_jeff).

Jeff's parents are Chinese immigrants. His parents divorced when he was in the third grade, and he was raised by his mother, an accountant. She often worked overtime during tax season and frequently reminded him that "there will always be someone better than you." Jeff represented the United States in the International Physics Olympiad, winning a silver medal in Estonia in 2012 and a gold medal in Denmark in 2013.

He graduated from Harvard with a degree in Computer Science in 2017 and joined Hudson River Trading, a high-frequency trading firm, as an algorithm developer. In early 2020, he pivoted to the crypto space, founding the market-making firm Chameleon Trading, and eventually co-founding Hyperliquid.

The name 'Chameleon' comes from his high school gaming ID and his fascination with chameleons. He genuinely admires the animal for its own sake, explaining in a podcast that their eyes can move independently in different directions, they have a unique toe arrangement, and a powerful ballistic tongue, making them seem like "aliens on Earth."

Before Hyperliquid, Jeff lived in Puerto Rico, running Chameleon Trading, one of the largest anonymous trading operations in crypto, almost single-handedly. He moved to Puerto Rico in late 2019, starting market-making with $10,000. Over two and a half years, the fund grew by thousands of percent annually, allowing him to achieve financial freedom by age 27.

This founder's personal style is quite extreme. Jeff is not driven by money, lives a minimalist lifestyle, wears the same clothes every day, cuts his own hair to save time, works at least 14 hours a day (sometimes up to 100 hours a week), and believes most people are "generally too soft." Following increased public exposure as the founder of Hyperliquid, after an incident where someone followed him into his apartment elevator, he adopted strict security measures, including moving homes, hiring bodyguards, and being accompanied by two private security personnel when going out.

According to a senior crypto executive who knows both Jeff and SBF, Yan's image is more refined, professional, and genuine—"Jeff gets haircuts, SBF didn't," "SBF's shorts were too long and ill-fitting, Jeff looks clean and sharp." This contrast in appearance and demeanor, compared to the FTX era, has become part of the Hyperliquid narrative.

Hyperliquid founder Jeff

Predecessor

Jeff's initial foray was into prediction markets. In April 2018, influenced by the rise of crypto and Ethereum, he co-founded the blockchain-based prediction market Deaux within the Binance Labs incubator. The project attempted a design of off-chain matching combined with on-chain settlement but ultimately failed to gain traction with users, only attracting about 100 before shutting down.

His real first big win came from Chameleon. In May 2023, Yan put the strategies Chameleon had validated over several years into an on-chain vault called HLP (Hyperliquidity Provider). Users could deposit $10 or $10 million. With no management fees or performance fees, the vault ran automated strategies. Every dollar of profit went entirely to the depositors. All accounts were on-chain—if FTX had been built this way, Alameda's hole would have been visible to the entire world.

HLP is key to understanding Hyperliquid. It provides liquidity to the exchange while offering regular users a zero-fee "high-frequency strategy entry point."

One early user described it as the first time in history ordinary people could invest in a high-frequency trading strategy at zero cost.

"I would have gladly paid Jeff a 2% management fee and 50% performance fee just to get into this strategy."

Starting from the second half of 2023, users traded on the platform and accumulated points weekly. The point calculation rules remained confidential, with iliensinc announcing the weekly points every Friday. Community members would gather on Discord around this time each week to compare their yields.

Jeff later stated that "rewarding real users is key" and that the points program "likely reduced the bot ratio from 99% to 20%."

In January 2024, Yan published a four-line manifesto:

No investors. 

No paid market makers.

No fees to the dev team. 

No insiders.

This formally established the project's position of neutrality. The HYPE token airdrop was completed on November 29, with the team's allocation unlocking over time and no shares allocated to investors.

How "No VC" Became a Product Strategy

Hyperliquid's rejection of VC is a deliberate strategy. Yan and the team decided against VC funding. They had already earned substantial capital from their crypto trading operations, with Yan covering the costs himself. He believes, "If you want to build a truly credibly neutral platform where anyone can build on top, an important principle is that there cannot be insiders."

"We are self-funded. We didn't need financing at all, so the decision was simple."

This choice had a consequential effect: by not reserving a share for VCs, the team could allocate 31% of the genesis supply almost entirely to real users. When the platform launched HYPE, 31% of the supply was distributed directly to users based on their trading activity—one of the most user-centric distributions in crypto history. The remaining allocation consisted of 38.88% for future community rewards, 23.8% for core contributors, 6% for the foundation, 0.3% for community grants, and a tiny fraction for protocol upgrades.

Jeff's decision not to sell equity to VCs naturally prevented them from demanding preferential shares, thus safeguarding this distribution structure.

CEX Experience × DEX Transparency (The Boring Tech Part)

Hyperliquid is an independent Layer 1 blockchain purpose-built for trading, separate from ecosystems like Ethereum or Solana.

The network is secured by HyperBFT, a BFT consensus protocol designed from scratch for low latency and high throughput. It can tolerate malicious nodes representing up to one-third of the staked share.

HyperBFT supports approximately 200,000 transactions per second with a block time of 0.07 seconds. Holders delegate HYPE to validators, and the system selects 24 active validators based on the amount staked. Each round of transactions requires achieving a staked quorum of over two-thirds. A 7-day unstaking queue prevents large-scale consensus attacks.

The chain itself is divided into two layers. The full execution state, including HyperCore and HyperEVM, is secured by HyperBFT. Every order placement, cancellation, trade execution, and liquidation occurs on-chain with single-block finality. Hyperliquid operates a non-custodial model; the platform does not take control of user funds. It is best known for perpetual and spot trading of cryptocurrencies, stocks, commodities, and forex. Users can also lend, borrow, issue, and transfer assets. HyperEVM is an Ethereum-compatible execution layer enabling users and developers to build applications using smart contracts.

HyperEVM allows DeFi applications deployed by external developers to directly connect to Hyperliquid's on-chain liquidity and order book, transforming the exchange into a foundational infrastructure layer upon which other projects can build, creating an open ecosystem platform. HyperEVM launched on February 18, 2025, enabling EVM smart contracts to access native trading liquidity without the need for cross-chain bridges.

The matching mechanism itself incorporates anti-front-running design.

Jeff identified a common problem: high-frequency traders use bots to quickly snatch orders after market makers place them. Market makers are forced to widen spreads to protect themselves, ultimately leading to higher costs for ordinary users.

Hyperliquid solves this by lowering the priority of rapid order snatching, giving market makers a fair chance to update their quotes, resulting in tighter spreads.

The matching engine operates on a price-time priority principle. It also allows special order types like cancel-or-flip and post-only to take priority over regular orders under specific conditions, ensuring market makers can adjust quotes without being front-run by faster traders.

Hyperliquid Deep Dive: Understand HYPE and HLP Model

The Most Talked-About Airdrop

HYPE's circulating supply is 222 million tokens, with a total supply of 1 billion. At the current price, its FDV is approximately $60.27 billion. The allocation is: Future Release & Community Rewards 38.89%, Genesis Distribution 31.00%, Core Contributors 23.80%, Hyper Foundation Budget 6.00%, Community Grants 0.30%, and HIP-2 Hyperliquidity 0.01%.

The airdrop in November 2024 distributed approximately 310 million HYPE, representing 31% of the total supply. In terms of both absolute quantity and dollar value distributed to real users, it was one of the largest in crypto history.

The airdrop concluded on November 29, 2024, distributing HYPE to over 90,000 eligible users. This stands in stark contrast to many projects that allocate a large portion of their tokens to VCs.

The core contributor portion has a vesting schedule. Over 61% of the HYPE supply remains locked. The Genesis Distribution immediately released approximately 310 million HYPE to early protocol participants and community members. It reserved approximately 237 million HYPE for core contributors, subject to a one-year cliff followed by a 24-month vesting schedule.

Most allocations use a cliff-based release mechanism. The entire unlock schedule extends into 2027. The next unlock is scheduled for June 6, 2026, for core contributors.

The most critical design element is the buyback. Hyperliquid uses 99% of its fees to repurchase HYPE, driving the token price past $62. This buyback is an on-chain mechanism executed automatically block-by-block by the protocol, converting transaction fees into HYPE purchases regardless of market conditions. Since its launch, the protocol has generated over $1.16 billion in revenue, nearly all of which has been used to buy back its own token. In the third quarter of 2025 alone, it repurchased $316.8 million worth of HYPE.

This structure creates sustained buying pressure beneath the token. The underlying business remains robust. Hyperliquid has become a dominant player in decentralized perpetual exchanges, supported by real trading fees rather than relying on inflationary token incentives. However, this also introduces a risk: HYPE's price is increasingly and tightly correlated with the trading volume of a single exchange.

HYPE has a fixed total supply of 1 billion. Over 70% is allocated to the community, and 97% of transaction fees are used for token buybacks. The protocol has generated $1.24 billion in fees, with an annualized revenue of $800 million to $1 billion, placing it among the top fee producers in DeFi.

The buyback flywheel also has its vulnerabilities.

This relationship is bidirectional. As crypto activity cools down, buybacks decrease alongside revenue. Hyperliquid's quarterly buybacks have dropped from $316.8 million in Q3 2025 to $192.3 million in Q1 2026, a decline of approximately 40% over two quarters. Simultaneously, more locked tokens are entering circulation, creating potential selling pressure that the Assistance Fund must absorb.

From Developer Sandbox to Trillions in Volume

Hyperliquid's growth was not linear; it exploded upon launch. In 2023, Yan launched Hyperliquid on its proprietary L1. The early version looked like a developer sandbox but offered sub-second finality, an on-chain order book, and a user experience close to Binance. Within months, daily trading volume surpassed $1 billion, and monthly volume soon exceeded $10 billion.

By mid-2025, it was directly competing with CEX giants.

In mid-2025, Hyperliquid's monthly trading volume reached $2.48 trillion, placing it alongside Binance and Coinbase. It took two years to grow from zero to 545,000 users. Jeff himself stated:

"We don't have a marketing department. The community does a better job than all the CEX marketing departments combined."

By early 2026, its market cap was propelled to another level.

HYPE is among the top ten crypto assets by market cap, hovering around $11 billion, less than two years after its trading debut. On May 15, 2026, Bitwise launched BHYP, the first US spot Hyperliquid ETF with native staking.

On-chain growth extends beyond trading. In early 2025, the platform launched HyperEVM, allowing developers to build financial applications directly on the Hyperliquid chain. The ecosystem expanded rapidly: the CDP protocol Felix manages over $400 million in assets, and the lending protocol HyperLend manages $380 million.

Over the past 12 months, Hyperliquid's trading volume reached $1.8 trillion, accounting for over 10% of global perpetual contract volume and over 70% of DEX perpetual volume. After its public opening in 2023, daily volume hit $1 billion within 100 days. By mid-2025, monthly volume reached $2.48 trillion, ranking alongside Binance and Coinbase. In just two years, the platform accumulated over 545,000 users.

Jeff Yan rarely speaks publicly, doesn't use social media, and never took VC funding, yet he was listed in CoinDesk's Most Influential 2025.

The Hyperliquid he founded processes approximately $10 billion