Unveiling Hyperliquid Founder Jeff Yan: Building an Encryption Empire Quietly with a 10-Person Team

The physics genius built the quietest giant in the Crypto Assets world.

Written by: Thejaswini MA

Compiled by: Luffy, Foresight News

Jeff Yan has a special fondness for chameleons. But it's not an obsession with the metaphor of "blending into the environment"; it's a love for the animal itself. His Twitter account is @chameleon_jeff (Note: chameleon is the English word for 变色龙), and in a recent podcast, he explained this obsession: chameleons can independently turn their eyes in different directions, "with two claws facing forward and three claws facing backward, which showcases a very interesting evolutionary trajectory," and they have powerful tongue projection capabilities. "They are a bit like aliens on Earth," he said.

This opening seems strange, yet it allows you to understand this man. He has built one of the largest trading platforms in the world with just a team of 10 people and zero venture capital.

In the past 12 months, Hyperliquid's trading volume has reached $1.8 trillion. This platform holds more than 10% of the global perpetual futures trading market share and accounts for over 70% of the trading volume in decentralized exchanges (DEX) perpetual contracts. Over 200,000 active users trade on the platform daily, generating hundreds of millions of dollars in revenue.

Jeff Yan initially did not intend to create one of the world's largest decentralized exchanges. However, in less than two years, he did it. Jeff identified problems that others overlooked and solved them.

System Thinker

Jeff Yan's Crypto Assets journey 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 was deeply interested in the intersection of mathematics, physics, and complex systems.

In 2013, while most high school students were still busy worrying about prom, Jeff had already represented the United States at the International Physics Olympiad and won a gold medal. Such achievements were enough for him to get into any top university, and he could even receive a pile of job offers before graduating.

Naturally, he entered Harvard University to study mathematics and computer science, and upon graduation, he immediately joined Hudson River Trading. In this extremely secretive high-frequency trading firm, people can earn millions of wealth by being a few microseconds faster than others.

"I have learned a lot about the market and how to think rigorously about it," Jeff said. At HRT, Jeff is dedicated to solving complex problems that integrate engineering and mathematics. He has learned how to build low-latency systems that can execute thousands of transactions per second. He understands how market makers provide liquidity and how different types of trading processes affect market efficiency.

After working at HRT for several years, he noticed the opportunity and turned to explore the encryption field.

In 2018, he attempted to build a Layer 2 prediction market platform, even raising some funds and moving to San Francisco to assemble a team. However, that attempt ultimately failed, as regulatory uncertainty and low user acceptance led to its demise. This also provided Jeff with valuable experience, helping him understand what Crypto Assets users really want.

Between 2018 and 2022, after the failure of Jeff Yan's prediction market platform, he refocused on trading. Initially, he only treated Crypto Assets trading as a side hustle and soon discovered severe inefficiencies in the market. Recognizing this opportunity, he scaled up the business and founded the Crypto Assets market-making company Chameleon Trading in early 2020. During the bull market, the company quickly grew to become one of the largest market makers for centralized Crypto Exchanges, and Jeff's reputation in the quantitative trading field was established as a result.

Then, FTX had an incident.

In November 2022, Sam Bankman-Fried's empire collapsed, and the exchange that was once seen as the future star of Crypto Assets came crashing down. Do you remember the $135 million naming deal with the arena? They had celebrities like Tom Brady and Larry David endorsing them.

"We witnessed the problems with FTX," Jeff recalled, "people realized that Crypto Assets were originally a fun game, but when some bad things happened, it was no longer the case."

Jeff witnessed billions of dollars evaporating overnight, simply because users entrusted their funds to a centralized platform. Most people would see this as a warning to stay away from Crypto Assets, but Jeff sees it as a challenge.

Build a rocket in the garage

The obvious solution is to build a decentralized exchange that can compete with large centralized exchanges. The idea is simple, but nearly impossible to achieve.

Every blockchain that Jeff has examined has issues. Ethereum is too slow; Layer 2 solutions add latency; Solana is relatively fast, but still not sufficient for large-scale transactions. All options require compromises and will ultimately make exchanges worse than they are now.

Thus, Jeff made a reasonable decision: due to the hard requirements of user experience, he decided to build his own blockchain from scratch.

The final result is Hyperliquid—a blockchain designed specifically for trading, capable of processing 200,000 transactions per second and achieving near-instant finality. Users can utilize up to 125x leverage across more than 145 different markets while ensuring the safety of their funds.

Most startup stories revolve around raising $50 million from top venture capital firms and then recruiting hundreds of engineers for expansion. However, Jeff's approach is different. He funds development with the profits from his trading company and keeps the team lean, with only 10 people.

"We started from scratch," he said, "so we didn't need financing, and the decision was very simple."

Jeff believes that venture capitalists holding a large stake in decentralized networks will become "scars of the network" and harm its long-term development.

This self-reliant approach allows Jeff to fully devote himself to creating products that users love, without having to cater to the expectations of investors. This has also led to one of Hyperliquid's most innovative features: when the platform launches the HYPE coin in November 2024, 31% of the coin supply will be directly allocated to users based on their trading activity. This is one of the largest user-centric coin distributions in the Crypto Assets space. The remaining coins will be allocated to future community rewards (38.88%), core contributors (23.8%), the foundation (6%), community grants (0.3%), and a small amount for protocol upgrade funding (0.012%).

The reason this token distribution method is feasible is that Jeff did not sell equity to venture capitalists; otherwise, they would demand preferential allocation. By remaining independent, he can prioritize community ownership over investor returns.

Hyperliquid launched in 2023 without a press release, no collaboration with KOLs, and no billboards in Times Square. Jeff simply opened the doors and waited for the future.

What followed was explosive growth that caught everyone off guard. Within 100 days, the daily trading volume reached 1 billion dollars. By mid-2025, the monthly trading volume is expected to reach 2.48 trillion dollars, putting Hyperliquid on par with 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 admitted, "I think our community does an amazing job, better than all those centralized exchanges' marketing departments."

This is not luck. The entire platform designed by Jeff is centered around how to align the incentive mechanisms with users, rather than extracting value from them.

This approach is too radical, and other exchanges may not be able to replicate it even if they want to. After all, when you have already raised hundreds of millions from venture capital firms, you cannot just give away most of the tokens to users.

Ecosystem

Although Hyperliquid initially started as a perpetual futures exchange, Jeff's vision has always been more than just 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 developing rapidly: the collateralized debt position protocol Felix currently manages over $400 million in assets, while the lending protocol HyperLend manages $380 million. Jeff stated that the ultimate vision is to centralize all financial services on one platform.

The issue that Jeff discovered is common across all Crypto Assets exchanges: experienced high-frequency traders use bots to quickly buy or sell even before market makers update their quotes after posting prices, or during price fluctuations. As a result, market makers are forced to widen the spread to protect themselves, and ordinary traders ultimately end up paying higher fees.

Hyperliquid addresses this issue by lowering the priority of fast "eating orders". Instead, the platform provides market makers with a fair opportunity to update prices, which means lower spreads and better prices for all users.

The platform's order matching engine adopts a price-time priority mechanism, with additional rules for smooth execution. Under specific conditions, the priority of special orders such as cancellation orders and limit orders can be higher than that of regular orders, which means that market makers can respond to new information, adjust quotes, and avoid being targeted by fast traders.

This subtle change encourages market makers to quote lower spreads, as they are less likely to incur losses from delayed arbitrage. Ultimately, everyone on the platform can benefit from better prices and higher liquidity. All of this takes place on-chain, making the entire process transparent, allowing users to see fairer and more consistent outcomes.

This depth of technology may be why professional traders (the people most sensitive to execution quality) choose to use Hyperliquid despite having access to every centralized exchange in the world.

What Will Happen Next

However, Jeff faces an interesting question: how to scale a 10-person company that handles trillions of transactions?

His solution is as counterintuitive as ever: instead of hiring more, he is building tools to enable 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. 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 coins. However, there is a threshold of 1 million HYPE coins (worth tens of millions of dollars), which means not everyone can enjoy this service. For users who meet the threshold, developers can retain 100% of the fees from the markets they create, which is something no traditional exchange can offer.

Jeff is still negotiating with sovereign wealth funds to build financial infrastructure, but he is unwilling to disclose specific countries. The goal is to demonstrate 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 Crypto Assets field by establishing an entity valued at $888 million, focused on holding HYPE coins. This transaction will make the newly renamed Hyperliquid Strategies Inc. the company with the largest holding of HYPE among publicly listed companies in the United States.

In this industry filled with grand promises to completely change everything, Jeff created 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 enjoy using.

"We focus on creating products that users love," Jeff explained, "everything else is secondary."

This approach seems to be very effective. Hyperliquid is currently handling over 10% of the world's Crypto Assets derivatives trading, and it operates with just a 10-person team and no marketing budget. For Jeff, this is just another engineering problem that needs to be solved.