From Zero to Hero: What Did Hyperliquid Get Right to Become the "CEX Killer"?

Original Article Title: From Zero Users to DeFi King: The Comeback Story Behind Jeff and Hyperliquid
Original Article Author: @defiance_cr
Original Article Translation: zhouzhou, BlockBeats

Editor's Note: In the process of building Hyperliquid, Jeff attracted core users by releasing professional technical content, rejected traditional marketing teams, and drove platform growth through generous rewards and rapid listing of new trading pairs. The HLP liquidity pool and tokenomics successfully changed user trading habits, leading to explosive growth. Hyperliquid's success stems from sustained effort, rapid adaptation, and attention to detail, embodying the crucial values of perseverance and innovation.

Below is the original content (reorganized for readability):

In 2018, Jeff left Hudson River Trading to build a decentralized financial exchange. However, due to a complete lack of users, the project had to shut down a few months later.

Five years later, in March 2023, he launched Hyperliquid. Today, it has become the most profitable DeFi protocol.

Even more surprising is how they got to this point. Hyperliquid had no marketing team and had never collaborated with any traditional advisors, marketing companies, or KOLs. Yet, it became one of the most discussed protocols on X (formerly Twitter) and even made appearances on CNBC.

This article will uncover their growth strategy.

Initial User Base

The Hyperliquid mainnet went live on February 26, 2023.

For a product to take off, it must first build a core user base, which typically requires ongoing content creation months before the product launch. Most founders in the crypto industry post a bunch of memes and hire KOLs and advisors to attract attention.

But Jeff chose a different path. He built the initial user base by continuously publishing in-depth technical content. His content covered high-frequency trading strategies, liquidity mechanisms, exchange operations, industry insights, and legal perspectives. By March 2023, Jeff was posting a high-quality tech thread almost every day.

Many people say Hyperliquid doesn't have a marketing team, which sounds like an understatement. But the fact is, Jeff's dedication before and after the product launch is more hardworking than any marketing team. He himself is the entire marketing team.

The quality of the technical content he releases is extremely high, far surpassing the level that most people can write. This quickly set him apart from the crowd, demonstrating the ability, hard work, and resilience that an excellent founder should have.

The effects are also very clear. Hyperliquid's daily trading volume increased rapidly from $3 million in early March 2023 to $50 million by the end of the month. This intense and sustained content output laid the foundation for today's Hyperliquid "faith community."

Cash Reward Mechanism

Hyperliquid initially sparked interest through a testnet competition and generous rewards, setting the tone for future development.

Cash Rewards After Mainnet Launch

Once the mainnet went live, the real reward mechanism began. For every $10,000 in trading volume generated, users could receive a $1 reward; for every $10,000 in referral trading volume, they could also receive $0.5. Subsequently, Hyperliquid introduced a holding reward mechanism to encourage users to place orders and hold positions. For example, holding a $10,000 position for a week would result in a $100 reward.

Most cryptocurrency projects start issuing tokens without a user base and are very stingy when it comes to distributing cash. Hyperliquid's generous approach, on the other hand, clearly goes against the trend, demonstrating boldness.

Continuous Adaptation and Rapid Response

Once it gained initial popularity, Hyperliquid turned "speed" into its core competitive advantage. It listed new trading pairs at an extremely fast pace. In May 2023, it listed 25 trading pairs; by November, this number had grown to 60.

The tempo was also very precise. During the outbreaks of hot projects like Friend Tech, PEPE, and WIF, Hyperliquid always managed to list related contracts first, and even launched perpetual contracts before some projects went live. This timely positioning brought in a large number of immediate users and gave everyone a real reason to use this protocol.

Whenever the market demands a new product or a new trading pair, Hyperliquid is always the first to go live and provide support.

HLP

The HLP market maker treasury was launched on May 20, 2023, marking their most significant breakthrough.

Prior to the HLP launch, Hyperliquid's daily trading volume was around $100 million. Within a month, the daily trading volume quickly surged past $1 billion.

HLP helped Hyperliquid skip the time and effort required to onboard initial liquidity providers, significantly propelling the platform's growth. At one point, HLP held 50% to 75% of the platform's open interest.

As an added benefit, HLP provided Jeff with more high-quality content to publish, further increasing the protocol's visibility. Users loved his posts about HLP. By September 7, the total locked value of HLP had grown from $1.5 million to over $6 million in just 30 days.

With the platform's continuous growth, more liquidity providers joined, and now HLP holds less than 5% of the open interest.

Points Reward Program

On November 1, 2023, Hyperliquid launched a points program, which had an immediate impact.

Within three months, Hyperliquid's daily average trading volume increased from $100 million to $1 billion. However, the beauty of Hyperliquid's points program lies not only in the volume increase but also in how it altered trading behavior.

Through long-term points incentives, Hyperliquid trained users to first increase their trading volume before holding positions, gradually shifting traders' habits. Subsequently, they conducted the largest airdrop in history, firmly securing traders' loyalty.

Conclusion

The growth of Hyperliquid is by no means accidental, but rather the result of hard work and continuous adaptation. Many details that other protocols overlook, Hyperliquid has optimized. Over time, they have even attracted the best influencers through open market competition, rather than simply relying on KOLs.

In the crypto world, many promising founders ultimately fail. But upon closer observation of Hyperliquid, you will see that the truly suitable individuals are winning this game.

Jeff went from a zero-user exchange shutdown to creating the most profitable protocol in the DeFi space. Most crypto projects eventually do not succeed, and the simple difference between those like Jeff who ultimately win and those who give up is this: you must continue to "play" this game in order to win it.

Jeff has provided a playbook that everyone can learn from. Whether you are a founder, developer, or builder in the crypto space, the lessons are the same: continue to build, continually adapt, boldly execute, and be willing to start over. Do not let failure define your future.

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