Editor's Note: In the crypto world following the collapse of FTX, the market's craving for transparency and security has spurred the rise of a new generation of decentralized platforms. Among them, Hyperliquid, with its lean team of just 11 people and the unique philosophy of 'zero venture capital', has emerged as a dark horse in the fiercely competitive derivatives arena, creating staggering revenue miracles. This feature by Fortune delves into how Harvard whiz kid founder Jeff Yan challenges traditional financial giants with an extreme pursuit of technology, attempting to build the 'AWS of Finance', while also exploring the regulatory clouds and future challenges this emerging behemoth faces on its path of rapid expansion.
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Around 5 a.m., a sharp alarm jolted Jeff Yan awake. It was a specially set ringtone, one that only sounded when something unusual happened at Hyperliquid, the decentralized cryptocurrency exchange he co-founded. And on this morning in early October, the situation was indeed extraordinary.
According to data from cryptocurrency analysis site CoinGlass, that day, after US President Donald Trump threatened to impose new tariff sanctions on China, cryptocurrency traders watched as over $19 billion in leveraged positions (i.e., bets made by borrowing money to amplify gains or losses) evaporated in an instant. "I could only stare at the screen, praying everything was okay," Jeff said, referring to his exchange's system. Within an hour, he mobilized "every brain cell" to analyze the data, ultimately confident the platform was operating normally—it had successfully weathered a stress test where thousands of traders suffered losses, while those shorting the market made a fortune.
In the weeks that followed, the crypto industry would refer to the October 10th crash as the "flash crash." It was the largest liquidation event ever recorded by CoinGlass, and its ripple effects are still felt within the industry two months later. It was also one of the clearest signs yet that Hyperliquid has grown into a crypto giant.
CoinGlass data shows the platform liquidated positions worth over $10 billion that day, a figure far exceeding the liquidation volumes of established crypto exchanges Bybit ($4.6 billion) and Binance ($2.4 billion). (Note: The $10 billion refers to the total value of the leveraged positions liquidated; the actual amount of money lost by traders is lower than this figure.)
Large exchanges like Binance and Coinbase have thousands of employees. In contrast, Hyperliquid Labs, the parent company supporting the eponymous exchange and blockchain, has only 11 employees. Yet, according to data from crypto analytics site DefiLlama, in just over two years, Hyperliquid has held its own against industry giants, with a derivatives trading volume of approximately $140 billion over the past month. This translated to over $616 million in annualized revenue, and its associated cryptocurrency (called HYPE) has also risen to the top of the industry, with a market cap nearing $5.9 billion.
But Jeff wants Hyperliquid to be even bigger. "No one else is really trying to build something like this right now," he said. "This is something that can truly upgrade the financial system."
Prodigies of the Crypto World
The cryptocurrency world has long been filled with flamboyant and outspoken figures. Jeff is not one of them. Wearing black-framed glasses, with neat black hair and usually dressed in sharp shorts, he admits to feeling uncomfortable in the spotlight. "This kind of celebrity treatment is foreign to me," he said, referring to the feeling of being mobbed by crowds at a recent crypto conference in Korea. While willing to talk about his background, he repeatedly emphasized that Hyperliquid is an ecosystem, not a one-man show.
Despite his professed modesty, Jeff is clearly crucial to the crypto protocol's rise. Born in the Bay Area, he was a typical child prodigy. In high school, he won gold and silver medals at the International Physics Olympiad, later attending Harvard University to study mathematics and computer science.
"He was always very calm, thoughtful," said Vladimir Novakovski, also a Harvard graduate, who interviewed Jeff for an internship position at wealth management software company Addepar. (Novakovski later founded Lighter, a competing exchange. A spokesperson for Hyperliquid Labs told Fortune that Jeff does not recall being interviewed by Novakovski.)
Around the time Jeff graduated from Harvard, the notorious cryptocurrency fraudster Sam Bankman-Fried (SBF) was rising to fame. SBF founded his own crypto trading firm, Alameda Research, and was also developing FTX—his crypto exchange specializing in perpetual contract trading. Perpetual contracts are derivatives that allow traders to bet on future prices without holding the asset itself. These contracts allow the use of leverage, amplifying both gains and losses.
Even as SBF charmed the entire crypto industry with his so-called genius rhetoric, Jeff and his team kept their distance, preferring to trade on platforms like Coinbase. "The relationship between Alameda and FTX wasn't clear to me," he said. "I didn't think it was worth the risk to expose any of our capital or strategies to that unclear relationship."
Aftermath of FTX
FTX was a black box. SBF funneled billions of customer dollars into lavish real estate purchases, high-risk venture capital, and political lobbying. It wasn't until FTX declared bankruptcy that customers discovered how much of their principal SBF had gambled away.
Jeff wanted to build a more transparent platform for crypto perpetual contracts (or "perps"). He and the team had considered building their own decentralized exchange before FTX collapsed, but "the FTX event solidified my belief that the timing was right now," he said.
He was far from the first founder to envision a decentralized trading platform. There were a handful of others, like dYdX, offering crypto derivatives for risk-tolerant traders wary of centralized exchanges like Coinbase. But these decentralized platforms were often clunky, difficult to use, and slow. "The user experience (UX) on centralized exchanges is very good, almost all the trading volume happens on centralized exchanges, and in DeFi (decentralized finance), I think no one was really trying to reach that level at the time," Jeff said.
However, Jeff himself is a trader, and he and the team decided to build a platform they would want to use. "I think it's great when the people building the product are very familiar with who the customer is," said crypto founder Novakovski, who had interviewed Jeff.
According to a senior crypto executive who has met both founders, unlike SBF, Jeff's image is more polished, professional, and sincere. "Jeff gets a haircut, SBF did not," said the source, who requested anonymity. "SBF's shorts were too long and ill-fitting. Jeff looks sharp and neat."
Unlike SBF and countless other crypto founders, Jeff and his team decided to reject venture capitalist funding. They had already earned substantial income from crypto trading operations, and Jeff decided to cover the costs out of his own pocket. "If we want to build a truly credibly neutral platform where everyone can build applications, a very important principle is to not have 'insiders'," he said.
In 2023, Jeff and his team launched Hyperliquid and the blockchain it's built on. According to DefiLlama data, trading volume grew steadily for months, but by early 2025, interest in the exchange exploded.
Hyperliquid is optimized for speed. For many traders, a difference of seconds means the difference between profit and loss. "I'm the user who's always pestering the team to add more features, but they keep rejecting every feature I request because they want to keep the platform extremely fast and flexible," said Thanos Alpha, an anonymous Hyperliquid user who calls himself a heavy user of the platform.
The anonymous trader, who declined to give his real name, added that this speed, combined with engineering solutions that allow Hyperliquid to accommodate larger trades than its competitors, underpins its success. He said he is a devoted DeFi user but declined to reveal his real name—a common request among crypto die-hards.
Now, the ecosystem is attracting interest beyond anonymous crypto traders. According to The Information, major venture capital firms like Paradigm and Andreessen Horowitz (a16z) have taken positions in Hyperliquid's HYPE token. Even Wall Street and large corporations are taking notice. Fintech giant PayPal posted about Hyperliquid on social media, while a slew of companies are racing to launch Hyperliquid-branded stablecoins on the blockchain. David Schamis, founding partner of private equity firm Atlas Merchant Capital, is running a public company that is hoarding HYPE. "It's not just about trading cryptocurrency," Schamis said of the blockchain technology.
The AWS of Finance
Jeff himself sees Hyperliquid as the Amazon Web Services (AWS) of financial infrastructure—the cloud computing giant that powers much of the internet. Developers are independently deploying different assets beyond cryptocurrencies for trading on the blockchain, including listed products tied to the stock prices of large companies like Nvidia and Google. And some validators (those who own the servers that actually process transactions) earn revenue by supporting the ecosystem.
However, there's no guarantee Hyperliquid will continue to expand, especially as competitors try to challenge its newly established dominance. This includes Novakovski, who later launched Lighter—a competing crypto derivatives platform backed by Founders Fund, Ribbit Capital, David Sacks' Craft Ventures, and a16z crypto. There's also Aster, a Hyperliquid imitator closely tied to crypto exchange Binance.
Furthermore, like many crypto projects in the DeFi world, Hyperliquid operates in a legal gray area. Its users are all anonymous, not required to submit documents to verify their identity, unlike traders accessing more traditional financial products like Robinhood. Taylor Monahan, chief security researcher at crypto wallet MetaMask, alleged that users linked to North Korea, notorious for its crypto hacking operations, have traded on Hyperliquid. According to crypto analytics firm Chainalysis, DeFi protocols are part of North Korea's money laundering operations.
A spokesperson for Hyperliquid Labs said Hyperliquid's website screens traders for risky behavior and enforces sanctions compliance measures, adding that "any confirmed high-risk activity on the application is immediately flagged, and the relevant addresses are blocked."
Moreover, if Hyperliquid continues to grow, the ecosystem could attract more regulatory scrutiny. "How long their (Hyperliquid's) no-KYC operation will be allowed to exist is a big question," said a cryptocurrency market maker. KYC laws require financial institutions to collect user identity information. The market maker requested anonymity to speak more frankly.
"The bigger you get, the more serious this problem usually becomes," the market maker added.
"We are actively engaging with regulators and policy stakeholders to support greater clarity for decentralized finance," the Hyperliquid spokesperson said in response.
As Hyperliquid navigates the evolving competitive landscape and regulatory environment, and works towards Jeff's ambition of reshaping financial infrastructure, this DeFi founder will likely continue to expand his team. This is also why he announced hiring in late October, increasing the headcount at Hyperliquid Labs by nearly 30%—from 11 people to 14.
