Elysium to Become the Next Catalyst for HYPE's New High?
- Core Thesis: Kinetiq has launched "Elysium," a Hyperliquid L2 built on Arbitrum Orbit, aiming to address gaps in the HyperEVM ecosystem with a higher-performance parallel execution environment and deep interoperability with HyperCore, while establishing value capture pathways for KNTQ and HYPE.
- Key Elements:
- Elysium targets 300 million gas per second and 100–200 ms block times, with throughput roughly two orders of magnitude higher than HyperEVM; the testnet is already live.
- Transactions execute on L2 with state settlement to HyperEVM, using HYPE directly as native gas, running in parallel with HyperCore.
- Plans to enable contracts to read HyperCore's deeper order books, prices, balances, and positions on demand, and support low-latency order placement for PropAMM and arbitrage strategies.
- Aims to establish a full issuance pathway for new tokens from Elysium AMM pricing to HyperEVM mapping, HyperCore spot, and HIP-3 perpetual contracts.
- Sequencer fee allocation: 25% to app builders, 25% to the Kinetiq treasury, and 50% for buying back and burning KNTQ.
- HYPE value flows include native gas, order book fees from HyperCore hedging, and USDC reserve yield sharing with potential buybacks.
- Ascend is the first announced deployment, planning no bonding curve, a 1% trading fee, with 90% of net revenue used to buy HYPE and 10% to buy KNTQ; mainnet launch is planned in one month.
HyperEVM has always been the weakest link in the Hyperliquid ecosystem. Constrained by performance, it is not yet capable of serving as the execution environment for complex applications running continuously around Hyperliquid.
Kinetiq, the protocol with the largest TVL in the Hyperliquid ecosystem, is trying to fill this gap. Kinetiq started with its HYPE liquid staking product kHYPE, which has about $1.3 billion in TVL. Since then, Kinetiq has launched Markets.xyz, a perpetual contract market based on HIP-3, extending its business from staking into trading. But what the community is most excited about is Kinetiq's recently launched Hyperliquid L2: Elysium.
Running in Parallel with HyperCore
Elysium adopts the Arbitrum Orbit tech stack, with transactions executed on L2 and state settled to HyperEVM, while HYPE directly serves as the native gas. Kinetiq's performance target is 300 million gas per second, with block times of 100 to 200 milliseconds and throughput roughly two orders of magnitude higher than HyperEVM. Elysium's testnet is now live.
Speed is only the first layer. What Elysium really aims to achieve is enabling smart contracts to directly use the trading market that HyperCore has already built. HyperEVM's current L1Read interface mainly provides the best bid and ask prices from the order book. Elysium plans to let contracts read deeper order book data, prices, account balances, and positions on demand, and also plans to let applications send orders to HyperCore with low latency.
PropAMM, operated by proprietary market makers, can continuously update quotes on Elysium based on inventory and market conditions, then hedge on HyperCore after trades are executed. Arbitrage programs can also simultaneously observe price differences between AMMs and the order book, reducing reliance on external oracles and cross-platform accounts.
Another clear use case for this chain is to support the entire process of a new token going from cold start to a mature trading market.
Currently, Hyperliquid has no stable path for asset issuance. If a newly issued token is first priced in an AMM on Elysium, then after liquidity grows, professional market makers provide deeper spot trading quotes, and the token is then mapped to HyperEVM and connected to the HyperCore spot order book; once the spot market is mature enough, the project team can also seek to list a HIP-3 perpetual contract market. This would establish a "standard流程" from issuance to spot and then to contracts.
Value Flows to KNTQ and HYPE
Elysium has designed a relatively direct revenue path for Kinetiq's token KNTQ. According to the published allocation plan, 25% of sequencer fees go to application builders who consume block space, 25% goes into the Kinetiq treasury, and the remaining 50% is used to buy back and burn KNTQ on the open market. If Elysium succeeds, it would be a huge boon for KNTQ.
The value flow for HYPE takes a few more turns. First, HYPE is the native gas for Elysium. Second, if the AMMs on Elysium generate enough volume and spread, market makers and arbitrageurs will return to HyperCore to hedge and match orders, generating new order book fees.
USDC circulating on Elysium can also increase Hyperliquid's revenue. Elysium's USDC is backed by native USDC on HyperEVM. Under the AQAv2 arrangement, Hyperliquid can earn a share of the yield from native USDC reserves on its network. If Elysium truly attracts new external capital, even if that capital is used on L2, it may increase the network's USDC reserves and thereby increase Hyperliquid's revenue and HYPE buybacks.
Launchpad
Ascend, co-founded by KOL CryptoTomYT, is the first project to announce deployment on Elysium. At present, Ascend looks set to become Elysium's flagship launchpad.
Ascend's documentation shows that it plans to have tokens enter closed hook trading pools directly, without a separate bonding curve phase, initially quoting in USDC or supported tokenized real-world assets. A project's trading volume, unique holders, market cap, and position concentration determine whether it can qualify for "Ascended" status. Qualified projects can receive platform buybacks and visibility, and then seek listing on HyperCore spot and HIP-3 contract markets.
Ascend's most distinctive mechanism is that users can convert HYPE deposited into Ascend into Kinetiq's kHYPE. The staking yield generated by kHYPE is used to buy new tokens that have obtained "Ascended" status, and those new tokens are then distributed to stakers. In effect, users can stake HYPE to obtain high-quality meme coins from the launchpad.
Ascend does not plan to issue its own platform token. Trading fees are set at 1%, with devs receiving 25% of that fee; active creators or project takeover agents recognized by the platform can receive 50%. The platform will use 90% of net protocol revenue to buy HYPE and 10% to buy KNTQ.
Elysium's mainnet is planned to launch in one month. Whether the fervor of the Hyperliquid community can ignite Elysium is worth watching.
