FDV exceeds 9 billion USD, with widespread praise from the community. Why has Hyperliquid succeeded?

Author: Chen Mo cmDeFi

The discussion about why @HyperliquidX is more successful than other Perps is the hottest topic today. Let’s talk about $HYPE from personal experience, all in one thread 🧵

1. Technical Mechanism Perspective

The key here is actually the Vault. This mechanism exists in GMX and Jupiter, but Hyperliquid's Vault is an evolved version, featuring Protocol Vaults (HLP) and User Vaults, opening the door to diversification.

At the same time, the emergence of diversified Vaults also addresses the liquidity issue of long-tail assets, and trading long-tail assets is the core competitive advantage of Perps DEX over CEX, which many competitors have been exploring to solve.

Then there’s the composability as a chain, which directly skips the transition from Protocol to Chain, reaching the finals, opening up space in terms of valuation and imagination.

2. Market Perspective

Here are a few bonus points that many projects could learn from:

(1) Not seeking financing, not pursuing listings on major exchanges, and not deliberately spending money on advertisements, taking a bottom-up approach is more likely to gain favor in this market cycle.

(2) Generous airdrops.

(3) No PUA; although there were some controversies regarding score dilution in the early stages, overall it has been clean and straightforward, without repetitive tasks or endless cycles of completing tasks to earn NFTs.

(4) Positioned as a "chain" provides imaginative and valuation space. Hyperliquid is essentially a chain, so various DeFi and Perps combinations can be built on it, such as stablecoins, lending, etc. This has led to a phenomenon where initially people compared the valuation of some Perps DEX with $HYPE, but gradually felt something was off and began comparing it with public chains. This alternative sense of upward breakthrough has once again boosted market sentiment.

(5) Positioned as "on-chain Binance," which is very topical, because DEX, lending, stablecoins, and other DeFi protocols have basically secured their place in the market, while only the Perps track is still struggling, fulfilling the expectation of the last piece of the DeFi puzzle.

Conclusion

The market is uncontrollable; factors like timing, location, and human relations are hard to replicate. The technical mechanism, however, is certain. As of now, unless there are significant technological innovations in the future, the Vault for Perps is equivalent to AMM for DEX. dYdX has also recently introduced Vaults, and more micro-innovations may roll out various forms of Vaults. The success of this mechanism has established the position of Perps, which may no longer be the promising vase that just couldn't develop in the past.