Hyperliquid Founder Jeff Yan explains his project’s biggest challenge. He discusses balancing decentralization with practical progress, rejecting VC funding to maintain neutrality.
Hyperliquid founder Jeff Yan discussed the project’s biggest challenge. He spoke in an interview with TBPN. The difficulty is to balance the ideal of decentralization. This must be in harmony with the pace of practical progress. The Hyperliquid team is adamant against any venture capital (VC) involvement. They decide to slow down development if they have to. This way, the purity and credibility of the protocol can be ensured.
Prioritizing Decentralization Over Rapid Growth
This strategy is to make Hyperliquid a genuinely trustworthy network. It aims to be a decentralized and capital-free neutral financial network. Jeff believes that early capital intervention can destroy neutrality.
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He says that if capital intervention is involved at the onset of a project, it can never be a neutral network. He compares this to the fact that Bitcoin is trusted. Therefore, Hyperliquid focuses on its vision first and foremost.
Hyperliquid, with Jeff Yan as its CEO, turned down the offer for VC funding. This decision fulfills its commitment to decentralization. It also strengthens user-centric growth.
On the other hand, the project is self-funded. It utilizes the profit made by its trading company. This funding model enables Hyperliquid to give priority to users. For this, it escapes the pressure from external investors.
VC-backed projects are frequently under pressure to grow quickly, sometimes superficially. Hyperliquid’s solution gets around this. Consequently, it can concentrate on sustainable and authentic development.
User-Focused Tokenomics and Community Ethos
Hyperliquid’s token distribution model is focused on users. Tokens are given to users according to their trading activity. They are not allotted to external investors. As a result, this model is facilitated by the lack of VCs.
All protocol fees generated are distributed. They go to liquidity providers and insurance funds. Importantly, none of these fees is paid to the development team. Therefore, incentives are brought into line with the community.
The team considers VC investment to be a potential compromise to decentralization. They say that VCs can produce an “illusion of progress.” They also believe that large stakes from VCs can turn out to be a “scar on the network.”
This is Hyperliquid’s community-first ethos. By not having outside investors, Hyperliquid says it is better able to focus on the needs of the users and the community. In addition, this approach has been a major factor in its growth.
It has also been important for the position in the market. This model is the exact opposite of the traditional paths started. These often include bumping up big rounds of VC to create hype.
Jeff Yan has referred to this traditional model as “a bit fake.” Consequently, Hyperliquid is out to make a different way. It favors true decentralization and the benefits of the community rather than external monetary pressure.
In conclusion, the decision by Hyperliquid not to accept VC funding is a core strategic decision. It is decentralized and user-centric growth growth-focused. Therefore, the goal of this commitment is to create a fully neutral and trustworthy financial network, similar to Bitcoin.
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