Unveiling Hyperliquid Founder Jeff Yan: How Did He Outperform Binance's Ten Years in Just Two Years?

Author: Thejaswini MA

Compiled by: Luffy, Foresight News

Jeff Yan has a special fondness for chameleons. However, it is not an obsession with the metaphor of "changing color to blend into the environment," but a love for the animal itself. His Twitter account is @chameleon_jeff (Note: chameleon is the English word for 变色龙). 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 possess a powerful tongue projection ability. "They are a bit like aliens on Earth," he said.

This opening seems strange, yet it allows you to understand this man. He built one of the world's largest trading platforms 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 accounts for over 10% of the global perpetual futures trading market and more than 70% of the trading volume in decentralized exchange (DEX) perpetual contracts. There are over 200,000 active users trading on the platform daily, generating hundreds of millions in revenue.

Uncovering Hyperliquid Founder Jeff Yan: How to Outperform Binance in Two Years?

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

Systems Thinker

Jeff Yan's journey in cryptocurrency 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 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 in the International Physics Olympiad and won a gold medal. Such achievements were enough to get him into any top university, and he could even receive a bunch of job offers before graduation.

Naturally, he entered Harvard University to study Mathematics and Computer Science, and after graduating, he immediately joined Hudson River Trading. In this extremely secretive high-frequency trading firm, people can earn millions of dollars by being just 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 blend engineering and mathematics. He has learned how to build low-latency systems capable of executing thousands of trades per second. He understands how market makers provide liquidity and how different types of trading processes affect market efficiency.

After working at HRT for a few years, he noticed the opportunity and turned to explore the cryptocurrency field.

In 2018, he attempted to build a Layer 2 prediction market platform and even raised some funds, moving to San Francisco to form a team. However, that attempt ultimately failed, as regulatory uncertainty and low user adoption led to its demise. This also taught Jeff valuable lessons and helped him understand what cryptocurrency users really want.

Between 2018 and 2022, after the failure of Jeff Yan's prediction market platform, he shifted his focus back to trading. He initially treated cryptocurrency trading as a side job and soon discovered serious inefficiencies in the market. Recognizing this opportunity, he scaled up the business and founded the cryptocurrency 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 cryptocurrency exchanges, and Jeff's reputation in the quantitative trading field was thus established.

Then, FTX had an incident.

In November 2022, Sam Bankman-Fried's empire collapsed, and the exchange that was once seen as a future star of cryptocurrency fell dramatically. Do you remember the $135 million naming deal between FTX and the arena? They had celebrities like Tom Brady and Larry David as endorsers.

"We witnessed the problems with FTX," Jeff recalled, "People realized that cryptocurrency was originally a fun game, but it wasn't so anymore when some bad things happened."

Jeff witnessed billions of dollars evaporate overnight simply because users entrusted their funds to a centralized platform. While most people would see this as a warning to stay away from cryptocurrency, Jeff sees it as a challenge.

build a rocket in the garage

The obvious solution is to establish 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, ultimately making exchanges worse than they are now.

Therefore, Jeff made a sensible decision: due to the rigid demand for 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 nearly 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 there was no need for funding, which made the decision 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 investors' expectations. This has also led to one of Hyperliquid's most innovative features: when the platform launches the HYPE token in November 2024, 31% of the token supply will be directly allocated to users based on their trading activities. This is one of the largest user-centric token distributions in the cryptocurrency space. The remaining tokens 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 upgrades (0.012%).

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

Hyperliquid launched in 2023 without a press release, without collaborating with KOLs, and there were no billboards in Times Square. Jeff simply opened the doors and patiently awaited 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 will 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 a great job, better than all those marketing departments of centralized exchanges."

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

This approach is too radical; other exchanges may not be able to emulate it even if they want to. After all, when you have already raised hundreds of millions of dollars from venture capital firms, you can't 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 operations on one platform.

Uncovering Hyperliquid Founder Jeff Yan: How to Surpass Binance in Two Years?

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

Uncovering Hyperliquid Founder Jeff Yan: How Did He Outperform Binance in Two Years?

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 narrower spreads and better prices for all users.

The platform's order matching engine adopts a price-time priority mechanism and includes rules that allow for smooth execution. Under specific conditions, the priority of special orders such as canceling 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 tighter 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 happens on-chain, so the entire process is transparent, allowing users to see fairer and more consistent outcomes.

The depth of this technology may be the reason why professional traders (who are most sensitive to execution quality) still 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?

Uncovering Hyperliquid Founder Jeff Yan: How Did He Outperform Binance in Two Years?

His solution is as counterintuitive as ever: instead of hiring more people, he is creating tools that allow others to build 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 tokens. However, there is a threshold of 1 million HYPE tokens (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, something that no traditional exchange can offer.

Jeff is still in talks with sovereign wealth funds to build financial infrastructure, but he is unwilling 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, the Nasdaq-listed biotech company Sonnet BioTherapeutics announced its entry into the cryptocurrency space by establishing an entity valued at $888 million, focused on holding HYPE tokens. This transaction will make the newly renamed Hyperliquid Strategies Inc. the company with the largest holdings of HYPE among publicly traded companies in the United States.

In this 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 vision 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 method seems to be very effective. Hyperliquid is currently handling over 10% of the global cryptocurrency derivatives trading, and it operates with just a 10-person team, without a marketing budget. For Jeff, this is just another engineering problem to solve.

HYPE2.23%
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