How Jeff Yan Built Hyperliquid: No Venture Capital, No Marketing Department

Author丨 Thejaswini MA Compilation丨 White55, Mars Finance Original link: Disclaimer: This article is a reprinted content, and readers can get more information through the original link. If the author has any objection to the reprint form, please contact us and we will modify it according to the author’s request. The reprint is for information sharing only and does not constitute any investment advice, and does not represent the views and positions of Wu Shuo. Jeff Yan has a soft spot for chameleons. But it’s not the metaphorical obsession with “changing color and blending into the environment”, it’s the love of the animal itself. His Twitter account is @chameleon_jeff, and in a recent podcast he explained the obsession: chameleon can independently turn its eyes in different directions, “two paws forward, three paws backwards, which shows a very interesting evolutionary trajectory” and has a powerful tongue ejection ability. “They’re kind of like aliens on Earth,” he said. This opening may seem strange, but it allows you to read the man. With a team of 10 people and zero venture capital, he built one of the largest trading platforms in the world. Over the past 12 months, Hyperliquid has traded $1.8 trillion. The platform accounts for more than 10% of global perpetual futures trading and more than 70% of the perpetual contract trading volume on decentralized exchanges (DEXs). More than 200,000 active users trade on the platform every day, generating hundreds of millions of dollars in revenue. Jeff Yan didn’t initially set out to build one of the world’s largest decentralized exchanges. However, in less than two years, he did it. Jeff finds problems that others have overlooked and fixes them. 1. Systems Thinker Jeff Yan’s path to crypto began in Palo Alto, California, where he grew up in the heart of Silicon Valley. Unlike many of his peers who focused on creating consumer internet companies, Jeff is interested in the intersection of mathematics, physics, and complex systems. In 2013, while most high school students were still busy worrying about their prom, Jeff represented the United States in the International Physics Olympiad and won a gold medal. That’s enough to get him into any top university, and even get a bunch of job offers before he graduates. Naturally, he enrolled at Harvard University to study mathematics and computer science, and immediately after graduation joined Hudson River Trading. In this mysterious high-frequency trading firm, people can make millions of dollars by being a few microseconds faster than others. “I learned a lot about the market and how to think critically,” says Jeff. At HRT, Jeff worked to solve complex problems that converged engineering and mathematics. He learned how to build a low-latency system that executes thousands of transactions per second. He understands how market makers provide liquidity and how different types of trading processes affect market efficiency. After a few years at HRT, he saw an opportunity and turned to the crypto space. In 2018, he tried to build a Layer 2 prediction market platform and even raised some funds to move to San Francisco to form a team. But that attempt failed, and regulatory uncertainty and sluggish user acceptance eventually led to its demise. It also taught Jeff valuable lessons about what crypto users really want. Between 2018 and 2022, after the failure of Jeff Yan’s prediction markets platform, he refocused on trading. He started out trading cryptocurrencies as a side hustle and soon discovered that there were serious inefficiencies in the market. Recognizing this opportunity, he scaled his business and founded Chameleon Trading, a cryptocurrency market-making company, in early 2020. During the bull market, the company quickly grew into one of the largest market makers on centralized crypto exchanges, and Jeff’s reputation in the quantitative trading space was established. Then, something happened to FTX. In November 2022, Sam Bankman-Fried’s empire collapsed, and the exchange, once seen as the future star of cryptocurrency, collapsed. Remember FTX’s $135 million title deal with the stadium? They have celebrity endorsements such as Tom Brady and Larry Davy. “We saw firsthand the problems with FTX,” Jeff recalled, “and people realized that crypto was meant to be a fun game, but it wasn’t anymore when something bad happened.” Jeff watched billions of dollars evaporate overnight as users entrusted their funds to a centralized platform. Most people would see this as a warning to stay away from cryptocurrency, but Jeff sees it as a challenge. 2. Build a rocket in a garage The obvious solution is to build a decentralized exchange that can compete with large centralized exchanges. The idea is simple, but almost impossible to implement. Every blockchain Jeff has looked at has problems. Ethereum is too slow; Layer 2 solutions increase latency; Solana is relatively fast, but it’s still not big enough for large-scale transactions. All options need to be compromised, which will only end up making the exchange worse than it is now. So, Jeff made a logical decision: he decided to build his own blockchain from scratch due to the hard needs of user experience. The end result is Hyperliquid, a blockchain designed for transactions, capable of processing 200,000 transactions per second with near-instant final confirmations. Users can use up to 145x leverage in over 125 different markets while keeping their funds safe and sound. Most start-up stories revolve around raising $50 million from top venture capital firms and then hiring hundreds of engineers to expand. Jeff’s approach, however, is different. He used the profits of his trading company to fund development and kept his team lean to just 10 people. “We started from scratch,” he said, “and we didn’t need financing, so the decision was easy.” Jeff argues that venture capitalists’ large stakes in the decentralized network will be a “scar on the network” and hurt its long-term growth. This self-reliant approach allows Jeff to focus on building products that users love without having to cater to investor expectations. This also makes one of Hyperliquid’s most innovative features: when the platform launches the HYPE token in November 2024, 31% of the token supply will be distributed directly to users based on their trading activity. This is one of the largest user-centric token allocations in the cryptocurrency space. The remaining tokens are allocated to future community rewards (38.88%), core contributors (23.8%), foundations (6%), community grants (0.3%), and a small amount of funds for protocol upgrades (0.012%). This token distribution is possible because Jeff didn’t sell equity to VCs, otherwise they would have asked for preferential distribution. By remaining independent, he can prioritize community ownership over investor returns. When Hyperliquid went live in 2023, there were no press releases, no partnerships with KOLs, and no billboards in Times Square. Jeff just leaves the door open and waits for the future. An explosion of growth ensued, which caught everyone off guard. Within 100 days, the daily trading volume reached $1 billion. By mid-2025, monthly trading volume will reach $2.48 trillion, putting Hyperliquid alongside Binance and Coinbase. Hyperliquid has grown from zero to over 545,000 users in just two years. “We don’t have a marketing department,” Jeff admits, “and I think our community is doing a fantastic job, better than all those centralized exchanges.” It’s not luck. Jeff’s entire platform revolves around aligning incentives with users, rather than squeezing value out of them. This is too radical for other exchanges to follow suit. After all, when you’ve already raised hundreds of millions of dollars from venture capital firms, you can’t give away most of your tokens to users for nothing. 3. Ecosystem Although Hyperliquid started as a perpetual futures exchange, Jeff’s vision has always been more than simple trading. In early 2025, the platform launched HyperEVM, an Ethereum-compatible virtual machine that allows developers to build financial applications directly on Hyperliquid’s blockchain. The ecosystem is growing rapidly: Felix, a collateralized debt position protocol, currently manages more than $400 million in assets, and lending protocol HyperLend manages $380 million. Ultimately, Jeff said, is to bring all financial operations together on a single platform. The problem Jeff found is common to all crypto exchanges: experienced high-frequency traders use bots to buy or sell quickly after a market maker publishes a price, or even before the quote is updated when the price moves. As a result, market makers are forced to widen spreads to protect themselves, while the average trader ends up paying higher fees. Hyperliquid solves this problem by reducing the priority of quick “taker” orders. Instead, the platform provides market makers with a fair opportunity to update prices, which means lower spreads and better prices will benefit all users. The platform’s order matching engine employs a price-time-first mechanism with rules attached to it that allow for smooth execution. Under certain conditions, special orders such as cancelled orders and pending orders can be prioritized over regular orders, which means that market makers can respond to new information and adjust quotes to avoid being sniped by fast traders. This subtle change encourages market makers to quote lower spreads, as they are less likely to lose money due to delayed arbitrage. Ultimately, everyone on the platform has access to better prices and higher liquidity. All of this happens on-chain, so the entire process is transparent and users are able to see fairer and more consistent results. This depth of technology may be why professional traders (the most sensitive to the quality of execution) choose to use Hyperliquid despite having access to every centralized exchange in the world. 4. What happens next However, Jeff faces an interesting question: how do you scale a 10-person company that handles trillions of transactions? His solution is as counterintuitive as ever: instead of expanding the team, he builds tools that allow others to create applications on Hyperliquid. “If something can be done by someone else, it should be done by someone else,” Jeff said. “We can hardly do anything ourselves. I think this is actually a blessing in disguise.” The platform recently launched a permissionless market creation feature, allowing anyone to create new trading markets by staking HYPE tokens. However, the threshold of 1 million HYPE tokens (worth tens of millions of dollars) means that not everyone can access this service. For users who meet the threshold, developers can retain 100% of the fees from the markets they create, something no traditional exchange can offer. Jeff is also in talks with sovereign wealth funds to build financial infrastructure, but he is reluctant to disclose specific countries. The goal is to prove that decentralized systems can handle the scale and complexity of national financial systems. In July 2025, Nasdaq-listed biotech company Sonnet BioTherapeutics announced its entry into the cryptocurrency space, establishing an entity valued at $888 million, focusing on holding HYPE tokens. This deal will make the newly renamed Hyperliquid Strategies Inc. the company holding the most HYPE among U.S. publicly traded companies. In an industry filled with grand promises to completely change everything, Jeff has built something simple yet effective. No high-profile claims of “serving the unbanked,” no grand visions of “Web3 changing the world,” just a platform that traders genuinely love to use. “We focus on building products that users love,” Jeff explained, “everything else is secondary.” This approach seems to be working. Hyperliquid currently handles over 10% of global cryptocurrency derivatives trading, all run by a 10-person team with no marketing budget. For Jeff, this is just another engineering problem to solve.