“Backstab” or “Win-Win”? How Likely Is TradeXYZ to Leave Hyperliquid and Go Solo

Original: Odaily Planet Daily (@OdailyChina)

Author: Golem (@web3_golem)

As TradeXYZ's business continues to expand, maintaining a dominant share of over 90% in the Hyperliquid HIP-3 market for an extended period, discussions within the community have recently intensified regarding whether TradeXYZ might leave Hyperliquid to independently build its own trading platform.

Former Messari researcher Sam posted on X, stating that an investor bullish on HYPE due to the explosion of the RWA perpetual contract market should ask themselves three questions: First, if TradeXYZ leaves Hyperliquid and launches its own exchange, where will users go to trade? Second, what impact would TradeXYZ issuing its own stock/token have on HYPE's valuation? Third, how likely are the above two scenarios to actually occur?

The post has garnered over 470,000 views in just a few days. The reason this topic has gained such rapid traction is fundamentally that more and more market participants are beginning to realize that in the TradeXYZ-Hyperliquid partnership, the value contribution of both parties is shifting, and TradeXYZ is progressively accumulating stronger market influence and bargaining power relative to Hyperliquid.

In business partnerships, once one party gradually gains more resources and market leverage, and the distribution of benefits becomes visibly skewed, a "betrayal" is often not far behind.

A recent example comes from the AI industry. Cursor was once the largest AI coding tool on the market, built on Anthropic's Claude model. The two shared what seemed like a "golden partnership" — until Anthropic made its move: launching Claude Code, a direct competitor to Cursor. By mid-2026, Claude Code's ARR had officially surpassed Cursor's, knocking it off the table.

The blockchain industry has similar precedents: individual products that scale up often end up breaking away from their underlying infrastructure to build their own chain ecosystems — Uniswap and dYdX being prime examples. Even Polymarket, one of the hottest projects this cycle, has repeatedly been rumored to be planning an exit from Polygon's infrastructure to build its own.

Returning to the question at hand: how likely is it that TradeXYZ leaves Hyperliquid to go independent? And if that scenario does materialize, what would it mean for both Hyperliquid and TradeXYZ? Odaily Planet Daily will provide a concise analysis in this article.

Is Going Independent Inevitable?

There's a recurring pattern in the blockchain industry: a project starts on a public chain or infrastructure, scales up, and then — driven by performance needs, control, base-layer fee capture, or a larger narrative for fundraising — chooses to build its own infrastructure (L2 or standalone L1). TradeXYZ has indeed become big enough to fit this mold.

According to flowscan data, Hyperliquid HIP-3's cumulative trading volume has surpassed $469.62 billion, with TradeXYZ contributing over $437.4 billion — approximately 93% of the total. As of writing, HIP-3's total open interest (OI) stands at $3.9 billion, of which TradeXYZ accounts for over $3.8 billion — roughly 99.7%.

TradeXYZ's share of total Hyperliquid HIP-3 trading volume

The remaining trading platforms combined hold less than 10% of the market share — HIP-3 has developed a massive Matthew effect. It's fair to say that Hyperliquid's HIP-3 market is entirely dominated by TradeXYZ. The narrative premium that RWA on-chain derivatives have brought to Hyperliquid is, in essence, the narrative premium TradeXYZ has brought to Hyperliquid.

Whether measured by valuation or protocol revenue, TradeXYZ is far from dispensable to Hyperliquid. Rather, it has become a critical pillar propping up performance during a period of weak crypto market conditions and shrinking volumes in Bitcoin and other crypto derivatives.

According to official data, HIP-3 now accounts for 71.92% of Hyperliquid's total trading volume — an all-time high. Given TradeXYZ's dominant position in HIP-3, this effectively means TradeXYZ contributes over 70% of Hyperliquid's total volume. HIP-3 also represents 36% of Hyperliquid's total OI, implying TradeXYZ's share of total OI exceeds 35%.

HIP-3's share of Hyperliquid's total trading volume and total OI

TradeXYZ has thus leveraged Hyperliquid's infrastructure to grow into a behemoth capable of influencing traditional financial markets. In its relationship with Hyperliquid, its leverage and bargaining power have also begun to take the lead. So — once a child grows up, should it leave the nest? What factors might trigger TradeXYZ to build its own infrastructure?

Setting aside hard-to-predict capital operations like fundraising and token issuance, from a purely practical business standpoint, the most likely reason for TradeXYZ to strike out on its own would be to capture base-layer fees.

In Hyperliquid's HIP-3 market, transaction fees are split 50/50 between TradeXYZ and Hyperliquid. Moreover, because HIP-3 assets carry standard trading fees that are twice those of core perp markets, Hyperliquid actually earns the same protocol fees per HIP-3 trade as it does from core perp trades.

According to statistics, as of writing, TradeXYZ has generated nearly $50 million in total fee revenue. Under the HIP-3 split arrangement, TradeXYZ can take at most $25 million.

Fees generated by TradeXYZ

It's hard to imagine a project that has generated over $400 billion in trading volume with total revenue barely reaching one-ten-thousandth of that volume. Handing over nearly half of its income is untenable for most projects. Given TradeXYZ's current leverage over Hyperliquid, it could certainly negotiate a better split — say, 70/30 or higher. If negotiations ultimately fail, TradeXYZ may well choose to go independent.

Why TradeXYZ Won't Leave

Of course, for TradeXYZ, going independent has its appeal — but it also comes with significant constraints.

The first constraint is Hyperliquid's superior performance. TradeXYZ's perpetual contracts are deployed on Hyperliquid's HIP-3 platform, where matching, order types, funding, liquidation, and automatic deleveraging are all managed by HyperCore. Technically, TradeXYZ only manages oracle prices, mark prices, external prices, and related components.

If TradeXYZ chose to go independent, it would need to build its own team to construct the underlying infrastructure. That alone isn't an insurmountable challenge — but building an L1 with performance comparable to Hyperliquid's in a short timeframe certainly is. Even TradeXYZ founder Shoku himself acknowledges the quality of the Hyperliquid team. In March 2024, Shoku posted on X that while he wasn't sure how large Hyperliquid could ultimately grow on traditional metrics like TVL and volume as an L1, he was completely confident that no one in the entire crypto space could match the quality and rigor of Hyperliquid's on-chain products and dApps.

Those competitors would, of course, include himself. If TradeXYZ's self-built infrastructure failed to match Hyperliquid's capabilities, it would negatively impact its product experience and its price-discovery narrative relative to traditional financial markets.

The second constraint is that distribution channels are critical. Why would Circle willingly hand over more than 50% of USDC's savings yield to Coinbase? Because Coinbase has genuinely made enormous contributions to USDC's distribution and adoption. According to Coinbase's latest Q2 earnings, over 30% of circulating USDC is held on Coinbase. Whoever controls the channels and distribution controls everything — and this rule applies equally between TradeXYZ and Hyperliquid.

At its core, Hyperliquid's frontend is just one interface to access TradeXYZ's liquidity market — but it's not the only path. Users can already access TradeXYZ's liquidity market directly through its official website, with a trading interface highly similar to Hyperliquid's. To further ease user access, TradeXYZ's internal accounts are interoperable with Hyperliquid, meaning users can connect the same wallet on TradeXYZ's site and directly use any Hyperliquid balance.

TradeXYZ's own trading frontend

Even so, among TradeXYZ's 350,000+ trading users, the majority still access TradeXYZ's liquidity market through Hyperliquid's frontend. This is a deeply ingrained usage habit that's difficult to change. A certain proportion of users can't even tell the difference between TradeXYZ and Hyperliquid — they simply trust the Hyperliquid brand and passively trade TradeXYZ's products.

Hyperliquid thus provides TradeXYZ not only with technical support but also serves as its primary liquidity distribution channel. The cost and time of building infrastructure can be calculated, but the value of losing distribution channels cannot.

The third constraint is that the two projects' founders trust each other deeply — "childhood friends," so to speak. Prominent Solana KOL Ansem believes the probability of TradeXYZ going independent is almost zero, arguing that TradeXYZ and Hyperliquid are the two most compatible teams in crypto: "Neither founder shows any greed, and both are extremely smart. I trust they will choose the development path that best serves both teams."

This reasoning has merit. Shoku was among the earliest backers of Hyperliquid. As early as 2023, Shoku connected with Jeff and began contributing to the Hyperliquid ecosystem. In 2024, he developed Unit, Hyperliquid's Bitcoin cross-chain bridge. He once told friends that Hyperliquid was one of the few things in the crypto world that excited him. (Related reading: TradeXYZ's Mysterious Founder Shoku — A Man Forever Searching for Asymmetric Opportunities)

All signs suggest that Shoku deeply admires Hyperliquid and Jeff. From a personal-relationships standpoint, the likelihood of a "betrayal" is low.

If TradeXYZ Goes Independent, It's a Lose-Lose

If we're going to take this discussion all the way, this article shouldn't end here. We should also consider the low-probability scenario: if TradeXYZ actually does break away from Hyperliquid, what would the outcome be? My conclusion is that it would be a lose-lose for both.

Because in the current state, TradeXYZ and Hyperliquid are in a win-win situation. If TradeXYZ splits off, the massive uncertainty would harm both parties. After TradeXYZ goes independent, Hyperliquid could certainly nurture other HIP-3 market participants, but it would shift from being TradeXYZ's partner to its competitor. The impact on Hyperliquid's revenue wouldn't be enormous — over 70% of its income still comes from core perps, with HIP-3 accounting for only a small portion. The biggest hit would be to its valuation.

First, after TradeXYZ's migration, Hyperliquid's total trading volume would drop by more than 50%, and HYPE could potentially be cut in half. Hyperliquid would no longer be the leading on-chain RWA perpetual contract platform — it would be redefined as a crypto derivatives exchange that has lost its biggest growth engine and narrative foundation.

TradeXYZ wouldn't fare much better. It would need to build infrastructure and cultivate user habits from scratch. The performance and distribution challenges discussed above would become TradeXYZ's biggest constraints. Moreover, such a betrayal would likely trigger public backlash, further eroding TradeXYZ's credibility.

Additionally, TradeXYZ and Hyperliquid aren't only competing with each other — the broader RWA trading market has other competitors. "When the snipe and the clam fight, the fisherman wins." Hyperliquid would need time to cultivate a new HIP-3 market, and TradeXYZ would need time to build infrastructure. By the time either looks up, the market gap would likely have been filled by other competitors.

In summary, while TradeXYZ has become increasingly important to Hyperliquid, going independent is clearly not a rational move. Even if TradeXYZ wants to improve profitability, the best approach may be to retain the advantages of its existing Hyperliquid integration while gradually shifting focus toward its own issuance and user ownership.