🆑

you can front like you’re a lion til you get dropped off in the jungle | hyperliquid |

[🆑 @justlongit]

@lookonchain Hyperliquid

[steven.hl @_stevenhl]

CFTC Chair on Hyperliquid:
→ He thinks HL is transforming the US markets with their 24/7 offering
→ Smart contract logic automates a lot of what exchanges have to comply with
→ ADL is an unconventional mechanism, not good or bad
→ Modernizing the rules to bring things onshore

[🆑 @justlongit]

RT @based16z: Being in any crypto asset other than hyperliquid is mildly annoying it's like where's my guranteed $10m in daily spot buys

[🆑 @justlongit]

Just trying to be like @buyerofponzi

[🆑 @justlongit]

@Tradermayne Hell ya you earned it! (Stay safe)

[🆑 @justlongit]

@Yesreel_ +0% PNL

[🆑 @justlongit]

@jasonappleton People still own cardano?

[🆑 @justlongit]

@x256xx @randgroup Hyperliquid opened @ $20.41 up 300% since

[🆑 @justlongit]

@blknoiz06

[🆑 @justlongit]

@beffjezos @chamath Hyperliquid.

[🆑 @justlongit]

Hyperliquid

[Chamath Palihapitiya @chamath]

Institutions are inefficient.

Experts are overrated.

Capital should flow toward builders.

Technology compounds.

Independent thinking wins.

[ryandcrypto @ryandcrypto]

coinbase is now hyperliquid's official usdc treasury deployer

$6.06B in stables generating yield

that's 200M+ in new annual revenue for the protocol

stablecoins are one of the most profitable businesses on earth

and now $HYPE gets another 200M a year in buybacks and burns

[🆑 @justlongit]

@cobie

[🆑 @justlongit]

When will @coinbase allow hyperliquid:native staking?

[Coinbase 🛡️ @coinbase]

Coinbase is now the official deployer of @HyperliquidX's USDC treasury wallet.

We will be activating AQAv2 from the two addresses below:

0x4E5319dEb1072B01439EE674db5C321d11fd96F8

0xc20699185c15D0a2fD65779BB5d69f5b0B113c00

[Derek Edws @derekedws]

hyperliquid is a killer product

meanwhile, there are pressures that may constrain the project’s viability within US borders

including:

- hyperliquid’s product layer (via CFTC’s kalshi approval, coinbase/deribit no action, and policy statement)
- hyperliquid’s network and token layer (via clarity act)
- hyperliquid’s collateral layer (via USDC, managed by circle/coinbase, two US regulated entities)

haven’t seen a thorough discussion on these impacts, so below is a brief summary of the current paths forward, and the rationale behind each:

(1) hyperliquid can ignore US market, go offshore only
(2) hyperliquid can build a US regulated wrapper
(3) hyperliquid can decentralize under ‘clarity act’
(4) hyperliquid can centralize the project, turn $HYPE into a security
(5) hyperliquid can lobby for a change

these are the five, i'll start with the first

(1) hyperliquid can ignore US market, go offshore only

last week the CFTC approved kalshi’s BTCPERP as a futures contract on a DCM

the CFTC separately confirmed certain deribit perps may be treated as foreign futures through the coinbase FCM path

the implication is that regulated distributors for perps in the US may need a fully regulated venue, compliant customer funds path, approved product scope, surveillance, disclosures, and accountable corporate counterparties

without these in place

distributing hyperliquid liquidity, or offering hyperliquid perps, could look like routing US customers into an unapproved offshore venue

so the first option for hyperliquid is that they ignore the US market entirely

this approach would be similar to binance main exchange, which was ultimately forced to more aggressively block american customers after years of light effort

like binance, doing so would preserve hyperliquid’s product offshore, but cede US institutional access for the time being

(2) hyperliquid can build a US regulated wrapper

the second path is to find a way to build or partner with a US regulated wrapper to offer perps

under this path, offshore hyperliquid would remain a global crypto native venue, while a separate US affiliate or partner offers regulated perps through an FCM/DCM/DCO/FBOT style wrapper

you can think about this separate venue like Hyperliquid US™

in a perfect world, this is the ideal outcome for hyperliquid to target US users

however, this approach would likely require hyperliquid to ring fence (1) customer funds, (2) products, and (3) $HYPE value capture separate from the main network

the ongoing separation of Binance US™ from Binance’s main exchange is instructive here as a case study

- customer funds may be ring fenced because US regulated futures infrastructure cannot commingle US customer collateral with offshore protocol margin

- products may be ring fenced because the US venue will likely require approved, deep, liquid digital commodity perps, not the entire hyperliquid long tail universe of assets

- revenue and $HYPE value capture may be ring fenced because profits from a regulated corporate venue flowing into buybacks, burns, or assistance fund mechanics starts looking like token holders are economically participating in the profits of a corporate operating business, which could implicate US securities laws

net net, this model would likely require a significant rewrite of how the hyperliquid network works for US participation

(3) hyperliquid can decentralize under ‘clarity act’

the clarity act drafts offer a groundbreaking path for a lot of protocols to ‘progressively decentralize’ a network

i'll be writing more on this down the road

but for now

under clarity, progressive decentralization means reducing the role of the originator / related parties until the network and token are no longer under ‘coordinated control’

in exchange, a token may exist to capture *automatic* revenue flows originating out of the decentralized network, as long as the token value is primarily driven by the distributed ledger system rather than entrepreneurial or managerial efforts by a control group

in a vacuum, a token powering a decentralized network may support shifting the token’s classification from “security” to “commodity”

which is a big deal for many protocols and networks in the US

however, there are tradeoffs for projects optimizing for the ‘decentralization’ route

for hyperliquid, decentralization under clarity would likely mean the project would need to aggressively broaden validators, decentralize the listing process, decentralize oracle/risk controls, reduce controlled ownership, reduce emergency discretion decisions, make upgrades slower and more governance driven, among offloading other day to day product decisions

this would be a meaningful change, as a large part of the hyperliquid thesis has been underwriting the core team’s ability to make fast product decisions, in a manner they see best

ceding managerial control over the protocol to satisfy decentralization changes the trajectory of the project, and shouldn’t be taken lightly

this also coincides with a separate issue

the clarity act’s decentralization framework is not a DCM/DCO workaround. even if the hyperliquid network could eventually satisfy clarity’s decentralized governance framework, this would still not automatically permit hyperliquid to offer perps directly to US users

notably, both clarity and the ag committee text for clarity preserve the existing commodity exchange act (CEA) regime for futures, swaps, options, and leverage transactions

this is important for understanding clarity's intent, as the ag committee writes the CFTC/CEA side of market-structure legislation and this text signals that clarity act legislation is not a workaround for the existing CEA derivatives regime

simply put

this likely means any decentralization for hyperliquid will *not* erase the need to follow regulated derivatives market infrastructure without a regulated wrapper, which would require a significant rewrite of how hyperliquid works for US participation

(4) hyperliquid can centralize the company, turn $HYPE into a security

this is probably the weakest option game theoretically, but worth mentioning

hyperliquid could become a corporate exchange, register or restructure $HYPE into a security, build a regulated wrapper, and shift value capture away from token buybacks/burns and toward equity, licensing, or regulated-entity revenue

this is the cleanest for compliance because the entity, venue, governance, customer funds, disclosures, and revenue flows become legible to US regulators *today*

but it is the most damaging to the network value prop, which relies on the idea that protocol activity, incentives, and economics are all aligned around $HYPE as a digital commodity, not a tokenized security

(5) hyperliquid can lobby for a change

there is a fifth option, which is to lobby for a change

here, related organizations could work hard to lobby the agencies to eventually create a bespoke framework for crypto-native perp venues like hyperliquid to directly target US audiences and capital

the work being done here by @HyperliquidPC is instructive

there is some evidence this approach could work in part

the CFTC is clearly moving in a more innovative direction, and the kalshi / coinbase-deribit path may be the first conservative step before more liberal steps to include more unique design architectures

important to consider, however

even if the CFTC further opens up on perps to tailor approvals for decentralized networks

this wouldn’t solve a $HYPE securities classification under the clarity act, which is a separate issue that may require network changes before US participation

without these changes

and under a current reading of clarity

i do find it impractical to think there will be a special token exemption for one project, while other projects are required to satisfy clarity act’s decentralization / network token framework

ok

in closing

these are the five US options as i currently see it, i'd be curious if folks in the legal / policy community are seeing others

there is also one final wrinkle, which is USDC now serving as hyperliquid’s ‘aligned quote asset’, with coinbase/circle tied into the broader treasury and routing strategy

a final point on this

if hyperliquid’s core settlement asset is USDC, then the system unquestionably inherits some degree of US regulatory control at the asset layer

but it also opens up a unique opportunity for significant policy shifts to support extending USD dominance, as flagged by @blknoiz06

its an interesting dynamic worth keeping an eye on for policy reasons

i hope some of this discussion is useful for further dialog

as of today

whether you are bullish or bearish on hyperliquid’s US efforts from here probably depends on two things:

(1) what probability you assign to each of these paths; and

(2) hyperliquid’s ability to compete once they end up on one of these paths

disclosure: my fund @collab_currency currently has exposure to $HYPE and projects building in the hyperliquid ecosystem

[Flood @ThinkingUSD]

STRC repeg, BTC bottom shorters trapped, and a rush of liquidity from equities into BTC.

Summer 26

[🆑 @justlongit]

I wonder what @HunterBiden thinks about Isreal?

[🆑 @justlongit]

@Henrik_on_HL I pray

[Havoc.hl 𝕏 @Havochl_]

Eric Trump is buying $ETH and Hunter Biden $HYPE

Who will win?