Friday, May 15, 2026

15: HyperLiquid

Beyond the Sky Jeffrey Yan turned down $100 million, airdropped billions to strangers, and can’t travel without a bodyguard. The story of how he built Hyperliquid, a blockchain and crypto trading exchange, into the most profitable startup per employee on earth. ............. On a Friday in January, before dawn, a 43-year-old was taken from his home in Saint-Léger-sous-Cholet, in western France. He was driven 30 miles to the small commune of Basse-Goulaine, where he was beaten, bound, and abandoned. Twelve hours later, once the sun had set in the suburbs of Paris, three men armed with a single handgun kicked in the door of a family home in Verneuil-sur-Seine. They beat a husband and his wife in front of their children, cable-tied all four of them, turned the house over, and left for the train station. It was the 70th such attack worldwide in under a year. ................ The business had started in a co-working space in the financial district, but her co-founder—the only person on the team who does not work under a pseudonym—had begun to attract attention. First it was just glances, people straining to place his face. Then strangers started approaching him. Then someone followed him into the elevator of his apartment. So the firm moved somewhere quieter, to a building where nobody would think to look for them. ..............

Even their cleaner does not know what they do. In her mind, she dusts for a merchandising company that makes stuffed cats. There are 34 cuddly toys in the office, so the confusion is understandable.

................. Hyperliquid, a blockchain and cryptocurrency trading exchange, is one of the most profitable enterprises per employee on earth. .......... Last year, its 11 employees generated over $900 million in profit. It is three years old, has a market capitalization of $10 billion, and has never taken a dollar of venture capital. ................ Jeffrey Yan, is 31 years old and has become, not entirely by choice, one of the more recognizable faces in an industry where success increasingly gets you kidnapped. ................... Before Hyperliquid, Yan lived in Puerto Rico and ran, more or less alone, one of the largest anonymous trading operations in crypto. It was called Chameleon Trading—Chameleon had been his handle for video games in middle school. He started it with $10,000 of his own savings, and for two and a half years, it grew at thousands of percent a year. When he told me his returns, he immediately tried to talk me out of finding them impressive. I noted his objection. I also noted that Chameleon had made him very rich. He was 27 and he was free. To every surfer and bartender and waitress in San Juan, he was just another kid in board shorts. ................ explaining to me why all of finance needed to be rebuilt from scratch. ............. He wears the same Lululemon shorts and T-shirt every day. He owns 15 pairs of the shorts and 10 of the shirts, in three colors each. ................ The office around him offered no evidence of wealth. The furniture belonged to the previous tenant. The team’s only additions were two board games in the lounge, NFTs on the walls, and the stuffed cats. ............. This team drinks tea. ............. He does not consider Hyperliquid a crypto company. “People don’t say we’re internet companies these days,” he told me. “We use crypto, but that doesn’t define us.” .................... Hyperliquid recruits from international math and science olympiad podiums. Yan won gold in physics at 18. One of his engineers holds a silver in informatics. Another trained with the U.S. national team. Yan would like to hire more, and since my visit earlier this year he has added two, but the pool of people at this level who are willing to build in crypto has been thinned by years of scams and broken promises and, lately, by artificial intelligence. .............. Hyperliquid is a blockchain with its own trading exchange built on top. On a traditional exchange, a company holds your money and controls the infrastructure. On Hyperliquid, you keep custody of your own money and the platform is public. Yan’s vision for it, stated without irony, is to house all of finance. That is a mark of ambition or absurdity, depending on whether you are looking at the cats or the platform’s numbers. .................

The most consequential products on Hyperliquid are now being built by people who do not work for Yan and never will.

................. “Hyperliquid has the chance to save crypto” ........... Her answer began not with crypto, but with the kind of person Yan is. I should ask him about his mother, she said. ............... when I asked about his mother, he thought for a moment. She had a saying, he told me. A Chinese idiom. Rén wài yǒu rén tiān wài yǒu tiān, which roughly translates to “Beyond the person, there are greater people; beyond the sky, there is more sky.” She was not the kind of mother who pushed, but she wanted him to know that however good he thought he was, he was seeing only a small piece of what was out there. ................... She raised him and his younger sister alone in the center of the most lucrative stretch of geography in the history of American business: Redwood Shores, between San Francisco and Palo Alto. Oracle’s mirrored headquarters towered over the neighborhood. The neighbors were engineers and product managers, and their children were being groomed, already, for exactly the kind of life Yan would later build. His parents, both Chinese immigrants, had divorced when he was in third grade. His father left. His mother, an accountant, worked overtime through every tax season and between them, and he could see it. “I could tell that people were more well-off than us,” he said, “but it’s never something I resented. It’s not very expensive to go play outside.” ................. Until he became a teenager, nobody pushed anything. He played outside, went to school, came home, played some more. He was, by the standards of his zip code, the rarest thing: a child left alone. .............. In eighth grade, a friend who had just transferred from a private school took him along to a math competition. The friend wanted company. Yan had never seen anything like it. School math was nothing like this. There were no formulas to memorize, no calculations to grind through. You were given a question, sometimes only a sentence long, and left to find your way into it. The answer was not a number. It was a proof, a complete argument showing why something must be true. At the end, they ranked you, the way they rank sprinters. To Yan, it was the best part of sport fused with the best part of understanding the world. .................. “It turned out, I was super competitive,” he said. “There was this race I wasn’t aware of, that other kids had been doing their whole lives, and I was behind.” .................. A year after he started, by which time he was in ninth grade, he had qualified for the U.S. Math Olympiad training camp, which comprised the top 50 high school students in the country. He was among the youngest in the room. He did not make the national team. He did not care, he said. For three weeks he sat among teenagers who could stare at three sentences for five hours and find, buried somewhere inside them, truths invisible to most other minds. There is no Roger Federer of mathematics, Yan told me, but at the very highest level, there is something like what Federer has. There is a style to the work, an elegance to the way a proof is constructed, and at the training camp he saw it up close for the first time. “It’s like being able to play football with Tom Brady,” he said. “But a nerd version of that. Most people don’t get that feeling.” ................... The problem was not the losing; it was the emptiness. “It felt like there was this void,” he said. “I should be studying something.” So he found some physics textbooks that the upperclassmen used. His school did not teach the subject until junior year, but he had just learned calculus, and for the first time he understood what it was for. He discovered Feynman’s lectures. “I consumed them like a TV show,” he said. Within a year, again self-taught, he became one of the top five young physicists in the country. ................... He made the U.S. Physics Olympiad team and traveled to Estonia—his first time in Europe—and won a silver medal. The following summer, in Copenhagen, he won gold, ranking 24th in the world. He was 18, and he came home to the Bay Area understanding that his mother had been right about the sky. There were exactly 23 people beyond him. .............

Harvard University covered nearly all of his tuition. During the spring semester of his freshman year, Yan enrolled in computer science 124, data structures and algorithms. It is a course taken mainly by sophomores and juniors, and it has a reputation for misery. Students in Harvard’s course guide have described it as “a necessary evil.” One review warned, “No social life. You will be maiden-less.” There were 150 students. Yan, the freshman, finished first, and it was not close.

............... At Harvard, students are assigned to upperclassman houses after freshman year. Yan drew Pforzheimer, where he became close with Scott Wu, two years younger, whom he had first encountered at a summer program for olympiad kids. Wu had won three consecutive gold medals for the United States at the International Olympiad in Informatics, the last with a perfect score, and would later co-found Cognition AI. When Wu was assigned to Pforzheimer as a sophomore, he texted Yan, “Yo, I’m in Pfoho.” Yan wrote back, “Let’s go!” ................ Wu would find Yan at the grand piano in the common room, teaching himself jazz, playing and replaying phrases until they locked in. They played chess and Go and poker together, and they spent hours talking about what it meant to be the best at something. Yan would talk about Faker, the greatest League of Legends player of all time, and about the great Go players and the best HFT traders. “He would always think about what makes a person special,” Wu told me. “What is the essence of this field? And what does it mean to get really good at it?” ................... Wu remembered Yan as unusually contrarian. Most students at Harvard, absorbing the same information from the same environment, arrived at roughly the same conclusions. Yan never did. He was also, Wu said, very funny. “Very deadpan. He’d just say something totally different from what you expect, but deliver it in the most dry manner possible.” ................. In the summers, Yan worked. He interned at Google X, building tools for the self-driving car project before it became Waymo. He interned at Tower Research Capital, a trading firm. During his senior year, he worked part-time at Nuro, another self-driving car company, largely because he thought four years of college was at least one year too many. .............. In the winter of his junior year, he and Wu were among 10 interns in the first program that Hudson River Trading had ever run. HRT is one of the most successful quantitative trading firms in the world. Also among the 10 were Alexandr Wang and Jesse Zhang, who would go on to co-found Scale AI and Decagon, respectively. The internship was structured as a three-week competition. In every round, Wu and Yan finished first and second. ................... Yan was doing everything right, but none of it seemed to matter to him. When Yan came in after eight months to say he was leaving, his manager understood. His email announcing Yan’s departure was, by the firm’s standards, notably warm. ..................... He thought trading was the purest real-life game you could play. You were right or you were wrong and the market told you which. .................. A lot of the smartest people in the world were competing against you, and in the process of playing this brutal game against each other, you produced an extremely valuable product for the world:

liquid, efficient markets

. ....................... But he had spent eight months improving a system that was already very good, inside a firm that would be very good without him, which meant he did not have a good answer to the question he couldn’t stop thinking about: What value are you adding to the world? ............................ In December 2017, the answer found him. Bitcoin was near $20,000. Coinbase was the most downloaded app in the country. Billions of dollars were pouring into initial coin offerings like Jesus Coin. It was crypto Christmas. Yan had first heard about Bitcoin during the HRT internship, when two former partners had come to pitch the interns on it. It hadn’t clicked for anyone. But, while still at HRT, he found Ethereum’s yellow paper, and it described a computer that ran computations the whole world agreed on and no one person could shut down. He was touching finance every day. He could see what it ran on. The paper described a way to replace trust with code. “I felt like I could go and build a thing that would revolutionize finance.” ......................... The architecture rested on an idea Yan believes he and his co-founder were the first to arrive at: off-chain matching, on-chain settlement, because Ethereum was far too slow to run a real exchange on. ....................

As Yan recounted this, the Singapore sky opened. Fat, heavy drops, the kind of rain that fills gutters in minutes.

................ Jesus Coin had died and not been resurrected. .................. he went to Tahoe, California, with a friend who had an overlapping one, and they snowboarded until the snow melted. Then he traveled to China, Japan, and Peru on a low budget. There was, he tried to convince me, a surprising amount of skill to being a tourist. He did not have it. ........................ In late 2019, when his non-compete expired, Yan moved to Puerto Rico, where people could legally bring their capital-gains tax rate to nearly zero. He had $10,000 and a sense that something big was coming. .................. For the first year or so, she was allotted roughly 30 minutes of his attention per day. The rest belonged to the trading algorithms scrolling across the television. ....................... Yan worked 14 hours a day, at a minimum, easily clocking 100 hours a week. He started with Python scripts, writing code that connected to crypto exchanges and traded on his behalf around the clock. He monitored them, refining the logic, following the data, and tearing the system down when it wasn’t working as he wished. ..................... For almost two years, his partner had no idea what was happening on the other side of the television. Their lives had not changed. They paid the same rent. They ate the same food. She knew he was passionate and driven, and assumed he was doing reasonably well, but there was no material evidence of his success. Then, one Friday evening in the summer of 2021, she tried to get him out the door for a dinner reservation she had made a week in advance. He would not leave.......... “You don’t understand,” he told her. “If I don’t fix this bug right now, I’ll lose $100,000.” .................... He needed someone who could do everything but code. At Harvard, there had been a person in Pforzheimer

who seemed on top of everything in her life, all at once, which was as foreign to him as a skill could be.

But last he’d heard, iliensinc was in Asia, working as chief of staff at a venture capital firm, traveling between Tokyo, Seoul, and Hong Kong. ........................ When he reached out, he found her in San Francisco. COVID had grounded travel, and the job that had taken her across Asia had become a series of midnight phone calls from her apartment. Yan explained what he needed. He offered no job description, no title, and almost no detail about what she would be doing. But she had spent three years evaluating founders for a living, and whatever Yan was describing, she thought he was not the kind of person to bet against. ..................... The firm officially got a name, Chameleon Trading, and iliensinc began joining Zoom calls with business development teams at the exchanges, lending a veneer of professionalism to what was, in physical reality, one man above the beach in San Juan. Beneath the behemoth market makers—firms like Jump Trading, Tower, HRT, and Jane Street—there existed a tier of anonymous firms whose scale nobody could quite verify. Chameleon was one of the most substantial. .............

Bitcoin had given the world a way to hold and move money without trusting an intermediary. Ethereum had given it a computer that no one person could shut down. Between them, they had laid out almost everything you would need to rebuild the financial system. But the industry had done almost nothing with either. The two largest exchanges, Binance and Coinbase, were centralized. Crypto kept reintroducing the thing it was supposed to eliminate.

..................... Yan gave her a budget of one bitcoin. ................. Their leader, away from his screen for the first time anyone could remember, was not entirely at ease. ............... He just knew that Satoshi Nakamoto’s original vision for Bitcoin was being quietly buried by the industry Satoshi had created, and it bothered him more than it should have bothered someone making millions off everything it had failed to build. ......................... Yan, it seemed to his team, had gotten a little too much fresh air. ........................ In November 2022, FTX, the third-largest cryptocurrency exchange in the world, valued at $32 billion, collapsed in nine days. It had been lending its customers’ deposits to Alameda Research, a trading firm run by the founder’s girlfriend. When users asked for their savings back, the cash was not there. Less than six months earlier, Terra, a cryptocurrency ecosystem worth $50 billion, had gone to zero in three days. It had tried to build a dollar-pegged currency backed by nothing but the system’s own logic. The algorithm that was supposed to hold the peg accelerated its collapse. Two of the largest projects the industry had ever produced, dead within half a swing around the sun. ....................... There were no investors to consult, no board to convince; it was his money and his call, and there was a new mission. .................... So they built their own. In three months, Hyperliquid had enough of a custom blockchain to run an exchange on top of it.

Yan then spent much of that year on Twitter

, making the case for what Hyperliquid offered and why it was better than what the industry had settled for. ................... Then, in May, Yan took the strategies that had made Chameleon one of the most successful anonymous trading operations in crypto and put them into an on-chain vault called HLP, the Hyperliquidity Provider. You could deposit $10 or $10 million. There were no fees and no carry. The vault ran automated strategies, and every dollar of profit flowed to whoever had put money in. The accounting was entirely on the blockchain. If you deposited $10, you could watch, in real time, as your $10 grew. If FTX had been built this way, Alameda’s hole would have been visible to the world. ..................... the first time in history that an ordinary person could invest in a high-frequency trading strategy with no fees. .................. “I would have paid Jeff a 2% management fee and 50% carry to be in this thing,” they told me. “Instead, a nobody with no network, sitting anywhere in the world, was able to access one of the great market-making strategies in crypto. People still don’t understand how special this was.” ................... So while it won trade after trade, it was effectively short a market that kept going up. People were furious. Other projects attacked Hyperliquid on Twitter and in Discord, and Yan attacked back. It was early enough that he still took things personally. ................. When VCs got on a call and asked if there was a deck, Yan and iliensinc would just talk, and eventually they would understand that no, there was not. .............. His one condition was that he would consider only a term sheet at a billion-dollar valuation. ................ Hyperliquid was not a company. It was a protocol, and its neutrality from day one was the point. “If Bitcoin had raised VC rounds,” he said, “I really don’t think it would be Bitcoin. Its entire value proposition would have been destroyed.” Plus, he didn’t need the money. ....................

On January 28, 2024, he tweeted four lines:

No investors.

No paid market makers.

No fees to the dev team.

No insiders.

Hyperliquid has one meeting a day, a morning stand-up, and I watched it on my second day in Singapore. The team crowded around one of the engineer’s screens. A dragon plushie sat on top. They were testing a new feature called portfolio margin, and the conversation was mostly about what could go wrong. It was also, for long stretches, not a conversation at all. Yan would cross his arms, bow his head, and contemplate his bare feet. The engineer beside him did the same. These silences were not awkward and they were not brief, and nobody in the room seemed to find them unusual. .............................. The team is young, between 24 and 31 years old, and nearly all of them are supremely intelligent introverts. But Yan, when I asked him afterward whether he reads much, suggested there was more to it than shyness. .................... “I’ve read way fewer books than conventional wisdom would say is optimal,” he told me, smiling behind dark-framed glasses. “It’s very time-consuming to read a book in a way that permanently shapes who you are. The return on time is not super good.” .................. He stretched his jaw for a moment—a habit I would come to recognize—like someone popping their ears on a plane. It is a particular hazard of writing about young technologists that they will, sooner or later, tell you they don’t read. I was grateful, then, when Yan clarified that he reads a book every other month and that he looked forward one day to sitting down and reading all the books he hadn’t read. Then he continued to explain why reading more would have to wait. ................... “Jeff was ambitious but he wasn’t arrogant,” the market maker told me. “He was very measured in how he described what he was trying to do, and he just checked all the boxes.” He walked out and texted his team: We should integrate. Two weeks later, they were live. ............... The regulatory picture for crypto derivatives in the United States was uncertain, Yan told me, and building there felt like a risk they didn’t need to take. One lawyer I spoke with described it as a period in which American regulators used “every means available to ban the technology from the country.” iliensinc looked at Hong Kong, Switzerland, and Singapore and settled on Singapore. It was modern and safe, and there were no distractions. ................ By the spring of 2024, the team had moved. It suited Yan because the city-state was boring. He has two modes: working and working out. He swims, he runs, he’ll do anything that will exhaust him without risking injury ..............

Exercise exists to clear his head so he can go back to building.

His one concession to leisure is Sunday mornings. The rest of the week belongs to Hyperliquid. He even cuts his own hair because, well, going to a barber takes time. ........ “The brain is an organ. If you need to work more hours, you can train for it.” .............. He has learned not to impose this on the team. They eat lunch together every day, family-style, around a black wooden table. On Thursdays they eat Chipotle. There is no Chipotle in Singapore, so they gave the recipes to their chef, who now makes it for them. The conversation over lunch typically drifts toward whatever the team has been watching or listening to. Yan, when this happens, tends to go quiet and look like he is thinking about something else, which he probably is. .......... To solve this without becoming a custodian, he realized he had to stop thinking of Hyperliquid as an exchange that sat on a blockchain and start thinking of it as a blockchain with an exchange built into it. The blockchain the team had built to run the exchange, already processing hundreds of thousands of orders per second, could be made programmable. It would be an open system on which anyone could write code and build financial applications, the way thousands of developers already did on Ethereum. The difference was that Ethereum was too slow to run a proper exchange, which is why Yan had built his own chain in the first place. ................ He will tell you that Hyperliquid has no parallel in traditional finance, that people prefer to fit new things into old categories rather than understand them on their own terms, and that this is a mistake. ..............

Hyperliquid would house all of finance.

............... The community was furious. They had expected an airdrop. Instead they got a tweet about infrastructure. Comments with a thousand likes quoted a meme from Breaking Bad: “We had a good thing.” “I hate this. You betrayed us.” Users didn’t want a blockchain. They wanted their money. Xulian, who had joined the team after a 15-minute user interview that lasted an hour and a half and never quite ended, absorbed the anger. “Jeff thinks about what is best for the long term,” he told me. “We just really don’t care if something looks good right away.” ...................... Hyperliquid airdropped 31% of its total token supply to roughly 94,000 early users. There were no conditions or vesting schedules. If you had used the platform and earned points, you woke up that morning with tokens in your wallet, richer than you had been when you had gone to sleep. At the opening price, the airdrop was worth over $1 billion. At all-time highs, it would reach $16 billion. It was the largest wealth transfer in the history of cryptocurrency, and every dollar of it went to users. ................ In 2023 and 2024, Hyperliquid had been small enough to be left alone. The airdrop changed that. A market capitalization of $4.2 billion, then $9 billion, then more, meant that every large business in crypto could now see the outline of a future in which Hyperliquid took their lunch. Binance announced its own decentralized exchange. Coinbase and Robinhood began offering futures products. New protocols launched with Hyperliquid as their target. And then someone followed Yan into his elevator at home. .............. It was the kind of thing that might have been nothing, but in 2025, violent attacks on crypto holders had nearly doubled. In France, a co-founder of a hardware wallet company had a finger sawed off and a photograph of it sent to his business partner as ransom. A family in Canada was waterboarded. Cryptocurrency transfers are instant, irreversible, and require no bank to approve them. A man with a wrench and a wallet address can drain a fortune. ..................... When I asked Yan for the hardest moment of 2025, he did not mention Jelly Jelly or the competitors or the bodyguard. He told me about API servers. ............... On October 10, the event happened. President Trump threatened 100% tariffs on Chinese imports, and over $19 billion in leveraged crypto positions were liquidated in 24 hours, the largest wipeout the industry had ever seen. More than 1.6 million traders were caught in a cascade that fed on itself, with forced selling driving prices lower, triggering more liquidations, driving prices lower again. .................... By the end of the year, its second full year in operation, Hyperliquid had earned about $900 million in profit. Not a dollar of it went to the team. Ninety-nine percent was automatically converted into HYPE and burned, removed from circulation forever, returning nearly all of the platform’s earnings to anyone who held the token. ................ HIP-3 went further. In the six months since it launched, seven independent teams had deployed hundreds of markets, most of them for assets that had nothing to do with crypto: oil, gold, stock indices, foreign exchange. Trade[XYZ], the largest deployer, had been growing 38% a week since October 2025. It had done more than $130 billion in volume across 192,000 traders. Markets created by independent deployers now accounted for half of Hyperliquid’s total volume. In February 2026, HIP-4 was announced. When it arrives, anyone will be able to deploy options or prediction markets on the platform. HIP-3 has opened Hyperliquid to any asset with a price. HIP-4 will open it to any event with an outcome. .................... Eleven people, and barely any AI. In the office, there were separate AI laptops that ran the latest models. They were used to explore ideas only. “We carefully monitor AI’s capabilities,” Yan said. “It’s not good enough yet to write important code.” ...................

Hyperliquid has done over $4 trillion in cumulative volume since 2023. It has 37% of the decentralized perpetual futures market. And it has done all of it without users in the largest capital market on Earth being able to touch it. Americans are locked out.

................. “It’s the difference between Go and chess,” he continued. “In chess, the better you get, the more moves ahead you read. In Go, there are just too many possibilities. The focus is more on building intuition for the next move rather than trying to read the whole tree.” .................. The fish, he said, rest for 30 days so they can work for five minutes. We watched them swim their circles. Then they were taken away to begin another month off.

at No comments:
Labels:
Subscribe to: Posts (Atom)