polloocb.crypto

Crypto investor, observer, and experimenter.

[Ericonomic @ericonomic]

https://t.co/MP2Iaa0xCm

[Hyperliquid @HyperliquidX]

The Hyperliquid L1 will support a native EVM.

The EVM will be augmented to atomically compose with native components on the Hyperliquid L1: HIP-1 assets, spot trading, perp trading, and other defi primitives.

Today, Hyperliquid already offers massively scalable throughput for the most heavily used defi operations. The EVM will unlock the full breadth of applications that do not require heavy optimization, such as bridging, auctions, lending, and novel user applications.

The EVM is not an isolated feature, but rather an integrated approach toward scaling the L1. By routing the highest throughput transactions through performant native components, the long tail of applications can enjoy ample blockspace. By empowering users to build on the EVM, the native order books will benefit from trustless bridging, new assets, and improved liquidity.

As one example of EVM composability with native components, HIP-1 assets will feature an atomic transfer with their corresponding ERC-20 contracts. This interaction will enable Hyperliquid L1 to become the premier platform to build, launch, and trade tokens. Builders will be able to deploy smart contracts with familiar EVM tooling and connect instantly to the CEX-like trading experience that users love. As the Hyperliquid L1 matures, users will no longer need centralized exchanges or other blockchains.

This is a relatively large undertaking. The testnet launch is expected to go live in the coming months.

[max.hl @fiege_max]

A quick writeup on @HyperliquidX post-points, $PURR, and my outlook on its fledgling ecosystem.

Hyperliquid has retained the vast majority of its power users post-points. Despite the program ending on May 1st, the platform has seen open interest return to mid-April levels (h/t @stevenyuntcap), TVL dropping by less than 5% since April 30th, and the onboarding of some 5,000 new users. It currently has zero rewards in place for these users. You can verify this for yourself at https://t.co/0E07kZ2DKR.

HyperBFT is in production and undergoing rapid iteration. HyperBFT is the brand new consensus mechanism that was announced by @chameleon_jeff May 5th and implemented on mainnet on the 15th with zero marketing. Network upgrades have been occurring at a weekly cadence and until that slows, I'll assume there's still work to be done until third party validators can be added to the network. Check out the network explorer to get a sense for the sheer performance.

PURR continues to be misunderstood by the market. PURR was introduced as a meme / mascot token to trial out the new spot market functionality. The market correlation gods have recently put it in the same basket as other meme coins, sparking a significant selloff. In short, I view this as incorrect given the fact that Hyperliquid has not accepted any outside investment for what is expected to be a multi-billion dollar network upon TGE. Value is determined by marginal flows, and if every VC / liquid fund under the sun is forced to buy $HYPE off of airdrop recipients, we will quickly witness a supply crunch that will make liquid beta alternatives more compelling. HYPE could trade at $4B market cap as Injective did at its peak, at which point PURR at sub-$100M simply offers better r:r, especially if we witness an influx of retail at that time. For reference, the combined market caps of BONK and WIF have typically amounted to a high single digit percentage of Solana's market cap. This doesn't even begin to take into account the fact that PURR holders will earn some de facto yield from new token launches on the network, or potentially even receive a minor HYPE allocation themselves. I view its current valuation as a complete and utter dislocation relative to what I expect Hyperliquid to eventually be valued at and have allocated just about every last dollar to this thesis.

The Hyperliquid team have demonstrated an unprecedented combination of aptitude, generosity, and savvy. Hyperliquid is being built out by a team of HFT engineers bankrolled by their previous success in the last crypto cycle. To date, they have forgone over $23M in revenue by open sourcing the Hyperliquidity Provider automated market making strategy; forgone anywhere between 8 to 9-figures of venture investment; and given away a token in PURR with no explicity allocation to themselves. All the while, they have shipped relentlessly, constantly taking trader feedback into account and barely bothering to market genuine advances (see: HyperBFT deployment being confirmed by a single "yes" response tweet). I cannot think of a single precedent for this confluence of traits in the stewards behind a network outside of the two blue chips. I genuinely believe this team is what people thought and desperately wished Sam and FTX were.

Miscellaneous.
- Whatever tradeoffs HyperBFT makes on the decentralization spectrum will be warranted if the platform has less counterparty risk than centralized exchange alternatives + UX remains excellent. The only robust regulatory strategy to date has been making enough money to buy your way out of the shit you kicked up (Binance, Bitmex, EOS) and I believe the Hyperliquid team realizes this as well.
- Hyperliquid is CZ's original vision for Binance. I don't think the peak of the first hyperliquid awareness cycle will be in until CZ expresses this himself. You can take the other side of that bet, but four months in prison with tens of billions to invest on the other side probably lends itself to researching the current state of the industry.
- Most market participants are grossly underestimating the share of initial token supply that will go to points holders. There is no need for obfuscating arithmetic on token allocation when there are no investors involved. My guess is that points and purr holders will combine for 50-60% of initial supply; 15-20% will go to locked liquidity; the remainder will go to founding individuals and a foundation; lastly, heightened network inflation will provide an opportunity to bootstrap a dynamic validator community.

I'll leave you with this: Solana has risen to its current status on the back of a spot trading bonanza and favorable marginal flows. It has done so by making tradeoffs on the "decentralization spectrum." While any smart contract blockchain would be hard-pressed to beat Ethereum on that spectrum today, Hyperliquid's efforts around HyperBFT suggest that Solana can be outcompeted on performance. I think Hyperliquid can beat Solana to become the premier trading onchain trading venue as a result, highlighting that hot ball of money metrics are far less lindy than most investors would like you to believe. We will see, of course, but keep this in mind when your primary counterparties continue to compare it to platforms like Aevo or Drift.

[Hyperliquid @HyperliquidX]

Shoutout to Jan, one of the OG members of the Hyperliquid community, for building this dashboard and leaderboard!

[Hayden Adams 🦄 @haydenzadams]

Not aimed at any specific project, but have seen a ton of discourse recently on the topic so figured I’d share my take on good token distributions:

1) tokens, not points

2) don’t farm the farmers - teasing and creating ambiguity around a token distribution to grow your numbers is bad behavior. If you don’t know yet, don’t speculate publicly. If you do know but are not ready to share full details, don’t tease them out. Just share real details when ready

3) real liquidity day 1 - low float tokens are malicious and my biggest pet peeve. You don’t need to work with exchanges or market makers. It’s so easy. Just distribute enough tokens publicly that real price discovery happens on DEX. People should start thinking in FDV not mcap when valuing these things

4) don’t create absurdly high token supply to farm people with unit bias, this is also bad behavior

5) don’t be stingy - give a significant amount away. If you don’t think the community deserves a significant amount, don’t release a token

6) don’t market token price - if you tweet about how your token is going to moon or hire influencers, or marketing firms to do so I assume you’re just trying to get rich quick vs build real value

7) keep it simple

8) put real thought and care into your decisions - so you can stand behind them and explain your rationale. Don’t end up in a situation where you’re fighting or apologizing to crypto twitter. Create something you’re proud of and stand behind it

[Raoul Pal @RaoulGMI]

Never forget: #DFTU

[jan.hl @janklimo]

Made this little dashboard to track @HyperliquidX's $PURR's burn and some other fun stats in real time.

🔥 https://t.co/NVgMQ9AXJC 🔥

[Ericonomic @ericonomic]

$PURR Thesis:

1) The deployer wants it to pump:
Hyperliquid has deployed it and has aligned interests for it to rise.

"If this memecoin reaches hundreds of millions in market cap, how high will the official token go? I'm going to keep farming points like crazy."

This earns them attention, fees, liquidity, and volume.

A perfect 10/10 move.

What are they doing to encourage people to buy it and generate volume? Giving more points (about 95% this week) to people who have traded/hold $PURR.

Trade $PURR to EARN points.

FTT/BNB in its early days vibes.

But... the points end in 2 weeks... right?

2) Not only 1 season
People think there will be only one season of points, but they are wrooong.

They've given several hints over time, but it's becoming more evident that this first season will not be the only one, so the points do NOT end in 2 weeks, just this season.

It's true that this might be the biggest season, and by the second we’ll have $HL deployed, but it seems they will follow a similar scheme to BLUR.

They probably won’t give as much as 95% to $PURR trading as this week, but it will definitely be incentivized in this manner.

Years of incentivized burns ahead.

Err, burns?

3) Deflationary token
It’s not a new concept, but it adds more fuel to the fire (ba dm tss).

All fees generated from trading $PURR are burned, making it a deflationary token.

In short, more volume = more burn.

The burns aren't huge, since the fees are 0.0336% for takers and 0.0096% for makers, but they are constant, very constant.

Why so constant?

Due to Hyperliquidity (HIP-2).

4) Hyperliquidity
Hyperliquidity is a fully decentralized onchain strategy for orderbooks, i.e., a "decentralized" market maker that ensures constant liquidity in the orderbook and keeps the spread below 1%.

To do this, they need liquidity. In the case of $PURR, they have permanently locked 100M (16.7% of the supply).

MMs can run bearish, neutral, or bullish strategies.

And as I say, for now, this MM algorithm is neither open source nor decentralized (actually nobody controls it, but until there are more validators, the team has power over it), so... what strategies do you think the algorithm designed by the protocol deployer and its official memecoin will follow?

5) Official Memecoin of HyperLiquid
Yes, it’s the official memecoin, as they deployed it.
Not much more to add in this section.
More fuel to the fire.

6) Only on spot
And yes, for now, it is only on spot.

When memecoins hit futures, they tend to pump to valhalla non-stop.

It’s usually hard for small tokens to get into futures due to low liquidity and other factors, but... how hard do you think it will be for the official memecoin of a decentralized futures platform?

7) It's a cat
There’s no cat with >$1B market cap yet.
It’s a pretty silly reason, but that’s how this market works.

GCR said it once, so...
________________________________
That's my thesis on $PURR.

Wdyt?

Disclaimer: i hold some thousands.

[vitalik.eth @VitalikButerin]

This is bad.

Crypto is not just about trading tokens, it's part of a broader ethos of protecting freedom and privacy and keeping power in the hands of the little guy.

And these values unfortunately continue to be under attack, globally.

[Henrik @Henrik_on_HL]

My $PURR airdrop is now worth more than my $W airdrop. And it's only a memecoin. Hyperliquid's governance token has yet to be released.

HL is self-funded and has not taken any external capital. Founders (Jeff & Iliensinc) were classmates from Harvard.

Billions. Few understand.

[Stani @StaniKulechov]

Important thread for anyone considering TGEs. The existing model of high FDVs are simply downhill pressure from the launch.

[Raoul Pal @RaoulGMI]

My latest big picture crypto/macro framework and why this is the biggest macro trade of all time. I hope you find it useful.

https://t.co/zUBwT2CLXD

[polloocb.crypto @polloocb]

I just submitted my response to participate in the $SHARK raffle!

https://t.co/OQDv2xcmut

[Venom Network @Venom_network_]

Our mainnet launches on March 18, 2024!

This marks a major step forward for the Venom blockchain, the community and the space as a whole.

We're excited to have you with us, and your support is key as we continue to grow and improve.

[polloocb.crypto @polloocb]

🚨It's almost time to join Venom blockhain! The mainnet launch is just around the corner (March 18th) and I'm beyond excited to see what the future holds for $VENOM. #Venomfoundation #VenomLaunch

[DRiP 💧 @drip_haus]

Comment your favorite memecoin using art or memes
🫳💧

[Ericonomic @ericonomic]

Hyperliquid points are currently trading at ~3.5$, wich gives a possible (not confirmed) FDV of 350M$.

Is it a correct valuation?

No, mainly because people do NOT know what Hyperliquid is.
🧵

[polloocb.crypto @polloocb]

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[polloocb.crypto @polloocb]

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[polloocb.crypto @polloocb]

💚 Diving into eesee testnet experience! I'm testing the platform, collecting points, climbing leaderboards, and earning rewards while contributing to the eesee ecosystem's growth!

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