Transcript
Speaker: Hyperliquid is an extremely, extremely Darwinian ecosystem. It is survival of the fittest. The market doesn't particularly need another L2, but it would be very intellectually lazy to look at Elysium as, again, just another L2. And I would agree if it wasn't built on Hyperliquid, if it was built on Ethereum, I'd be like, what the fuck are we doing here? Paying $1,000 for gas made absolutely no fucking sense.
Speaker: Welcome to a new episode of the InSilico Terminal podcast. And today we have, I guess, a a special episode because today we have the first ever repeat guest, which might be a more common occurrence in the future, but this is the first time and it hasn't been that long since we've been here the last time.
Speaker: But I think something substantial has changed that we didn't cover the last time you were on here. And um I am very interested to talk about that because I feel like we're kind of in a bear market right now.
Speaker: i mean, ah overall, i would I would say at least. And I remember the last bear market in 2023 that we had stuff like Frentech and stuff that like pops up and like dies down again and whatever. and Then pump fund, I guess, was like the big thing that appeared and got like huge. And now this this time we had, I guess, paper trade for for like a couple of weeks and that already died down. But I think you're building something that is very, um to me, at least interesting. That could be like something that like kick starts the new cycle a little bit that um could be a ah ah name or or something important for for the new a future of crypto. So I um
Speaker: also a bag holder just for like this for a disclaimer so i'm also like doing some bag work here now but i'm actually just interested in in what is Elysium and um yeah maybe you can just give me the the pitch version Yeah, ah first of all, thanks for having me back on. I mean i didn't know was the first ever repeat guest, so that's obviously, you know, it's an it's an honor. So appreciate that. um Yeah, stoked to talk Elysium. I mean, it's dominated, you know, my mind and the mind of our team for like a very long time. um
Speaker: But yeah, so in short, Elysium is in L2, built entirely on top of Hyperliquid. It is built on top of the Arbitrum platform stack. So you can think of, ah I guess, architecturally very similar in that regard to Robinhood chain. We did work with Conduit to bring this to life. So ah we do use their G2 sequencer, which does enable several multiples, more TPS than something like a Robinhood chain as well. And then also... um You know, being built on the Arbitrum stack does allow us to kind of further scale the offering in the future and make it even faster and lower latency. So yeah, that that is the super, super high level nutshell of what Elysium is.
Speaker: So me personally, I don't um do too much stuff on on chains on on anything because um it's it's often I don't know. It just doesn't interest me like that much. I'm more of like a a trading kind of person. But so like the first question that I asked me is why? Why do we need another chain? What what is this chain there for?
Speaker: it's ah It's a super fair question because this is what we ask ourselves a lot. And I think I've been quite ah publicly bearish, ah you know, L2s for a very long time. ah My personal view is that outside of like the Arbitrum and Optimism entrance in 2021, like five years ago, um there hasn't been really been much development or...
Speaker: yeah general value added there and in the slightest. um At that time, it was like very needed, right? Because you had Ethereum and like this last, you know, two years, if you will, since DeFi summer, where there was this massive rush ah of Ethereum DeFi and all this experimentation that was happening, which was incredible. um And i remember vividly you know paying like absolutely ridiculous amounts for gas, right? Like $1,000 for an approval and a few thousand dollars for a single you know contract call, um which could have been complex or you know even simple. So...
Speaker: Anyway, the point being, ah that was very needed at the time, right? Like, when Arbitrum was there, it changed the game. it it made um it made cheap fees and like fast transactions, like table stakes, over the next like couple of years. And it's been that way for a long time, right? like ah you know, base came to market and kind of like showed what would be possible outside of like BSC if a big company or centralized exchange more specifically came and pushed its own on-chain ecosystem. And, you know here we are, right? Where again, it's it's complete table stakes. So,
Speaker: um Yeah, again, back to the question of like why we need another l two like the market doesn't particularly need another L2, but what really kind of set the tone here was what was happening on Hyperliquid, where Hyperliquid has been the undisputed and unequivocal winner of perps. um And in 2024, when Hyper-EVM was announced, our view by the end of that summer was that we were going to build Kinetic and then you know we proceeded to do that. And when Hyper-EVM went live in February of 2025, which again, like as you know everyone knows the Hyper-EVM team, right they don't say what's what's going on. So you know we were waiting, we had audited the protocol for... for
Speaker: you know, quite some time. And even when we went live, well, HyperEVM went live in February, you know Kinetic didn't go live for another five months because we needed one particular ah technical dependency that, again, went from February to about July to go live. And at that point, that's when you put out a whole like seven or eight day notice. And then, you know, Kinetic finally went live.
Speaker: And the reason for that at the time was it it required this fully, I guess you could say, you know, hyperliquid dependency that is called the write precompile or at the time, you know, L1 write. And um this ah essentially allows the protocol on HyperEVM to basically talk to hyperliquid's exchange component slash, you know, staking module. um to To basically like put this in very, very layman's terms, ah you can think of Hyperliquid as like one street with two lanes, right? And like you could you could think of like one lane being HyperCore, which is the exchange side, and HyperEVM being the general purpose environment where you could do all the stuff that you know we do today and you know with Kinetic on the smart contract side and um you know many other protocols have deployed. So DEXs, money markets, ah leverage token protocols, et cetera, right? Like anything and everything that you can do in DeFi, you you should be able to do on HyperEVM.
Speaker: The complication, if you will, is that the way that HyperEVM is currently structured like kind of baffles a lot of people because of the kind of dual block architecture that's required to compose with Hyperliquid's state. Again, like I said, right it's the same street. It's not two different streets. It's all kind of you know on one you know form of ground, if you will, rather than like separated across totally different highways, if you will.
Speaker: So HyperCore and HyperVM are all one state. ah And you know in order for HyperVM to kind of fit within you know HyperCore block per production time, it seems like they needed to create this kind of dual block architecture. And um which again, is totally understandable. hyper HyperCore is kind of like the...
Speaker: the main thing, right, in their regard, like, logistically, it doesn't really make sense to work on, you know, Hyper-VM, and, you know, in their view, at least that's what the kind of public thinks. um If it's making, you know, on a good day, maybe a few million dollars a year, um but again, it is kind of like throttled, not necessarily on purpose, because they just want to screw over Hyper-VM. I don't believe this is how they view it, but there are technical constraints, right? So HyperCore, on the other hand, makes you know between one and five million dollars a day, sometimes even more. So it makes total and complete sense for HyperLiquid, which is a super small and super focused team to just work on that offering. So this leaves a huge gap for the general purpose activity that should be taking you know form on HyperLiquid and should be dominated by HyperLiquid. That's just not happening. And when we were thinking about this you know a couple quarters ago, yeah know this is what we ultimately landed on. And again, like we were very reluctant at first because, again, like why another chain? like We knew this was going to be like a big point of criticism. Ah, it's just another L2, whatever.
Speaker: But... Really what Elysium is, like going deeper and like way past like the high-level nutshell you know example, is he's a fully general-purpose layer that's built to compose with the deepest, most utilized form of liquidity on-chain, which is hyperliquid. Like that is a completely different offering than that's ever existed before. um And the really cool part is that Elysium does solve a lot of these problems that developers and users on Hyper-VM do experience, which are you know huge constraints in terms of the gas limit that the that the chain you know offers and obviously the speed as well. I believe it's like you know seven transactions per second at the moment. um So for further context, Hyper-EVM's dual block architecture is again split in two. There is small blocks, which produce blocks every one second and have a gas limit of 3 million.
Speaker: And then big blocks, which produce yeah a block every minute. So those have a 10x kind of like ah capacity in terms of and gas limit, which is 30 million gas.
Speaker: So Elysium changes this by reducing block times to 100 milliseconds. So about 10 times ah faster than ah then small blocks. And then 600 times, roughly, faster than big blocks, if that makes sense. But with the same capacity as big blocks. So 30 million guess, and then 100 millisecond block time. So extremely fast and a lot of throughput. potential and yeah, that's the super, super high level, right? And and the idea is that yeah what we're doing at Elysium is effectively building our own adaptation of the precompiles that Hyperliquid released and enabling even more functionality. So instead of you know the current offering, which basically just allows you to read BBO from Hyperliquid directly from the EVM side, which again, is already a leap and bound ahead of what any other general purpose ecosystem can do.
Speaker: you'll be able to on Elysium, not just read BBO, but also read on top of the BBO, you'll be able to read order book depth as well and even more information at some point across all of Hyperliquid's markets. So what the fuck does is actually mean? Like, cause we're just talking a bunch of nerdy shit here and like, how does this actually translate to the end user?
Speaker: So imagine for a second that any ecosystem did not need to rely on you know external Oracle providers for pricing. Imagine when you're trading on Robinhood chain, you can use Robinhood's option pricing for like as the RWA Oracle, essentially. Or if you were trading on BSC, you didn't need to use you know some other Oracle provider. You would just use Binance's pricing of crypto assets, which is obviously the most, it's the gold standard, right? Outside of Hyperliquid for centralized exchanges, like you were just using that for for pricing. Like what is possible there is you can build really robust DeFi applications that leverage this pricing, know, day in, day out.
Speaker: ah to basically offer you know anything you can think of. right So fully on-chain perps that compose with Hyperliquid's order books. um You can offer fully on-chain options order book. ah You can offer you know quite a lot. right like You can offer tokenized ah perps as well.
Speaker: And what what that means is like leverage tokens essentially that do have composability with DeFi protocols like AMMs or money markets. So like you can do quite a lot. right ah Prop AMMs would basically be in heaven because you don't need to basically take, you know split your account or equity across the on-chain world where you need to provide liquid liquidity and capture swap volume. And then the rest of your equities on centralized exchanges hedging that flow. You could just do it all on-chain. So you're you're capturing swap volume on Elysium and then you're hedging on HyperCore. like this is This is the possible scenario. Could you explain briefly what a prop AMM is?
Speaker: So in short, a prop AMM is kind of like, um I'm thinking of like the best way to explain this and in most simple terms, but they're kind of the DEXs where liquidity is being routed and most people don't even know, right? So it's not your typical Uniswap or, ah you know, kind of,
Speaker: aggregator type product essentially. it's ah It's a pool of like what tends to be much more shallow liquidity than what you're seeing on the surface that is basically just hyper optimized to give you the best possible fill on chain.
Speaker: And these guys will then hedge that risk, you know, instead of capturing like a larger spread between like you know, one or or three basis points or more, ah they will basically offer as close to zero possible spread and then just hedge that that flow on centralized exchanges or or wherever they want. so Maybe some do it on hyperliquid already or other perpdexes.
Speaker: But that's basically a very, very high level of what a prop amm is. And there's even cool products like metric who have built you know, infrastructure for prop AMMs to deploy on top of as well, to my understanding. So yeah, ah these became mostly popular initially on Solana and then also proceeded to kind of deploy across other ecosystems like Robinhood chain or base and so on.
Speaker: So yeah, that's the that's the very high level. So, you know, these guys can do, you know, 15 plus billion dollars in volume on like five to $10 million dollars of liquidity. And the reason they're doing this is you know basically just, I won't say undercutting, but just providing way, way better pricing than what you could find typically sitting in idle LPs on DEXs or other AMMs. So yeah. yeah
Speaker: um how How does it work? Or maybe a a just general question about layer twos. Because we've we've seen layer twos with ah Ethereum obviously for like a while now. And I'm actually not not too sure anymore about the roadmap. I think at at some point it was more like a layer two centric roadmap. And I think they kind of like tried to move away from that a little bit again. But also don't really i don't really know what's going on with Ethereum anymore too much. but There are like definitely a lot of arguments to make that the maybe the Layer 2 route wasn't like the best way to go, or that Layer 2s can be like parasitic and stuff. how how How do you feel about that, and what do you think it's going to be with Elysium and HyperEVM?
Speaker: Well, that's exactly the the point right as to like why you know we decided it was actually quite time for something like Elysium because it it really is like a middle finger to like what L2s have traditionally been for Ethereum, right? So ah Ethereum's kind of like monetary soundness comes from economic activity happening on Ethereum itself, Ethereum mainnet, right? Like the L1.
Speaker: And for the first time ever, right, and which is why, again, like, we go back to that question of, like, why another chain? Why another L2, et cetera? It would be a very intellectually lazy to look at Elysium as, again, just another L2. And I would agree if it wasn't built on Hyperliquid. If it was built on Ethereum, I'd be like, what the fuck are we doing here? Like, it makes no sense. That would have never happened. um So...
Speaker: Ethereum's monetary premium and soundness kind of comes from economic activity happening on Ethereum mainnet, the L1, right? um When you build an L2 for Ethereum and obviously, you know, help scale the network because again, it has been very problematic. It was super problematic in 2020, 2021. This was super needed. We needed fast, cheap transactions. Paying $1,000 for gas made absolutely no fucking sense, right?
Speaker: um What ended up happening was these L2s would cannibalize the L1. And the economic activity was happening on these L2s, obviously, because it's cheap to trade. It's kind of like taxes, if that makes sense, in the real world, right? Like, you're not going to have a lot of economic growth in a place with like sky-high taxes, you know, just for the hell of it.
Speaker: ah maybe Europe is a perfect example, right? Like not a lot of economic growth, super taxed, right? So, hope you know, it makes sense. ah I was recently listening to a podcast of like Ireland being a perfect example, super low taxes. You know, they had a problem in like the seventies, eighties, they dropped taxes because they were about to default. And like within the next year, after they expected maybe a few years after this would happen, but within the next year, they had absolutely explosive growth.
Speaker: right Super low unemployment, major capitalistic kind of like you know things happening and so on. um So this kind of same thing ultimately happened to Ethereum and high gas fees ended up kind of acting like taxes in this regard. So people took their activity elsewhere, as you can imagine. um And what would happen is, you know, people started at this point, rightfully so, to doubt Ethereum's monetary soundness because economic activity was no longer happening mostly on Ethereum. It was happening on the L2. So this kind of cannibalized ah Ethereum essentially. and
Speaker: you didn't have these L2s paying a lot back in terms of like, I guess the the best way to think about this ah is like paying back the crown, so to speak, right? Like these L2s are paying, you know, $700 to $1,000 a day, it seems like, to Ethereum for security.
Speaker: And that security is worth hundreds of billions of dollars, right? Like Ethereum is a several, you know, $100 billion dollar asset. ah It is the most decentralized network on the planet, probably outside of Bitcoin. um So yeah, like it was very obvious that there was something wrong there, right?
Speaker: um So in this case, the same thing. um You know, we flipped this on its head because we're not settling to Ethereum, number one. We're settling to HyperEVM, which is HyperEVM's general purpose blockchain. And we're using hype as a gas token.
Speaker: So we're not using our own native token for gas. Like that doesn't make sense. We're not even using our LST, Khype for gas, which you know has 85% market share and it's the largest application and and ah product on Hyperliquid.
Speaker: You know, we're using Hype itself as gas. We're posting, you know, data to Hyper-EVM, rolling up to Hyper-EVM to be specific. And, you know, we're built on top of Hyper-EVM from the liquidity perspective as well. So like where when people want to access Hyper-EVM from Elysium, again, that's that's kind of the point, right? They're not accessing Binance or Coinbase or whatever other exchange. They're going to Hyper-EVM given the fully on-chain nature of it. and kind of the attachment, if you will, that Elysium has the Hyperliquid. The other side of this too is USDC is a perfect example. Any USDC that's coming to Elysium on day one ah feeds Hyperliquid's assistance fund revenue because of the AQA v2 agreement that they have in place with Coinbase and Circle. So when USDC is locked on Hyper-EVM and bridged to Elysium one-to-one,
Speaker: That is basically paying hyperliquid. So we have changed this whole value accretion or extraction, if you will, in Ethereum. we've We've turned this narrative on its head with Elysium, where pretty much the entire existence of Elysium is value accretive to hyperliquid, while Kinetic itself also does capture a massive amount of value. We're not sitting there altruistically, you know, bleeding the Kinetic protocol out while paying the Piper, right? Which is, in this case, hyperliquid. That doesn't make sense.
Speaker: We are... completely aligned in beefing up Hyperliquid as an ecosystem from a revenue profile perspective. And this comes from trading volume, from hedging flows coming you know from Elysium. This comes from you know Elysium being able to play a role in helping tokens, quote unquote, graduate to Hyperliquid through either a spot listing or an eventual perp listing through HIP3 or Hyperliquid validator perps. And then obviously the USDC component as well, where like that reserve yield pays Hyperliquid for existing.
Speaker: so That is the super, um I mean, I tried not to draw it out very long, but like that is the the much less condensed version of what Elysium is, the purpose it serves and like how it you know flips the whole value extraction narrative on its head. And we become an extremely, extremely valuable partner to Hyperliquid in this regard, at least in our eyes, because we're sitting there providing it flow from so many different angles and using its asset and so on.
Speaker: Yeah. I think something that i that I read as well that I think you didn't mention just now is how the sequencer fee split works. Yeah. So thats that's another super unique component, right? So like all the other L2s that exist,
Speaker: um you know kind of you could think of the operating businesses or foundations as basically like taking all the money, right? um The way that we go about our sequencer revenue is super robust and unique. So 50% of the sequencer revenue ah goes to buying back KMTQ programmatically.
Speaker: um You know, going back to the hyperliquid component, hyperliquid's core business is not the general purpose ah blockchain, you know, HyperVM, right? Hyperliquid's core business is perps.
Speaker: We are not competing with hyperliquid's general and core business. where We are complementing the hyperliquid offering by building a super robust and super performant general purpose ecosystem.
Speaker: Hyperliquid's core business is perps, right? Like all the perp trading that happens, all the spot trading, HIP4, HIP3, you name it. you know that's happening on Hyperliquid, that this is this is the equivalent to Hyperliquid of Ethereum's gas fees, if that makes sense. That is what drives you know the whole quote unquote hypersound money thesis, the economic premium and like kind of ah you know situation that Hyperliquid has right now is totally and completely due to Hypercore, which is the exchange component.
Speaker: There is, and this is what we argue when we announced Elysium, is that institutions, ah retail, you know hedge funds, you name it, you know whoever it is that that holds hype, basically do not value hype today based on HyperVM. They value it pretty much entirely on the exchange flows, those revenues. So this also further created perfect grounds for Elysium to exist because we do not compete with that in the slightest.
Speaker: If anything, we actually feed that. right We feed that by passing on more flow to Hyperliquid. So, um yeah, like that's why we call ourselves the most, the the I can't even say the most, like the first and only value creative L2.
Speaker: So going going back to like how Kinetic itself accrues value from this from this business is 50% of the sequencer fees go to programmatically purchasing and burning K&TQ on the open market. So, you know, half of those fees. The other 50% is split between 25% going to our treasury. ah So this is to sustain operations, take care of integrations and so on and so forth. And then the other 25% is dedicated to builders totally and completely. So this is not some biased,
Speaker: builder program where like we so sit there and hand out grants like Sokyo has a really cool podcast, let's give them, you know, X amount of money or someone built a cool application, let's give them blah blah blah, whatever, no. So the quarter of sequence of revenue that's set aside for builders is based entirely on block space consumption from their applications.
Speaker: So what ah what the fuck does that actually mean? Imagine like for a second, you know, you ran your own exchange or somebody ran an exchange and you're just like sitting there deploying assets and they're like hey, we're going to take, you know, a quarter of the fees and give it back to the people who've deployed assets here. That's like HyperLigod basically saying, you know we're going to take a quarter of the revenue from HIP3 and we're going to kick it back to deployers because they are driving volume on HyperLigod. This is that equivalent, right? And you would do it pro rata based on what amount of the trading volume or OI, for example, that, know,
Speaker: you know these listings make up from these deployers. That's an example. um So in this case, it's like, what percentage of the block space consumption are these applications taking up? So for example, if Uniswap is like 25% of that, then they're going to have a quarter of the quarter of sequencer fees that we set aside, um and so on and so forth. That can be the case for any application, right? Obviously, this creates room for spam. So there's going to be criteria that people cannot sit there and just like sit there and spam transactions. and you know print off of the quarter of sequencer fees we set aside. But yeah, so that is also another very, very unique component of Elysium is that we give builders upside in the ecosystem's actual growth because of the fact that you know they themselves could be very much contributing to that factor. So yeah, it's ah it's a very interesting um you know way to basically earn revenue, right? Like as a builder on Elysium.
Speaker: Yeah. It's pretty unique, I guess, right? Like other other chains don't really do anything similar. Yeah, this this literally does not exist anywhere else. It's also a very, very cool, interesting idea. of um i want to i want to ask briefly about um the architecture. Why did you decide to to go with Arbitrum Orbit over other options?
Speaker: Yeah, great question. hu So we've we've spoken with other providers and ultimately, yeah for those that do remember, you know, HyperLiquid was initially built with this Arbitrum bridge ultimately. um And effectively before moving to its own consensus mechanism was basically built on top of Arbitrum in some way, shape or form. So, you know, when our team was assessing this, we ultimately realized that building on the Arbitrum platform itself was going to be significantly easier to build what we wanted to build, right, which was the precompiles and our own implementation of both the read and write precompile using the Arbitrum stack. So no other stack. I mean, it's not like it couldn't be done elsewhere. It's just that if we were going to you know do this, like we should do it properly. We should do it with an ecosystem that, or a stack more specifically that does allow us to compose more seamlessly with HyperCore because what we would not like is
Speaker: to build our own implementation of the precompiles that basically just continue adding more and more latency for trades on behalf of users or like reading data from Hyperliquid. So we needed whatever was going to give us as little latency as possible um and as little difficulty building it as possible. So yeah, Arbitrum was like ah the clear winner there.
Speaker: I see. And can you maybe go a bit more into um like maybe at first applications that will be there at launch, like things that are that you've already announced and partnered with and what's going to be there ah at the beginning and then also more possible things, maybe even stuff that doesn't exist yet in in any way, any anywhere on any chain or whatever that is like newly made possible by Elysium. Yeah.
Speaker: Yeah, so yeah, it's a pretty long list. Jeez, it's like 200 plus now, but I'll go off the top of like what has been announced for sure. So so yeah, Uniswap, Aerodrome, um a few Prop AMMs as well. We've gotten a lot of interest there.
Speaker: ZeroX, KyberSwap, LiFi, Wormhole, MetaMask, Rabi. ah USDC is obviously going to be there. um derive will support Elysium deposits on v3 openc we just announced today um yeah and then a lot of the trading terminals right so like FOMO and pump fun are are like two of the biggest ones xstocks EQX for tokenized equities ah Yeah, so quite quite a lot ultimately. It's going to be a lot of stuff. And then a lot of like native applications as well. So people are building a lot of launch pads, their own NFT marketplaces or trading terminals. ah
Speaker: yeah Our own trading sub brand. So markets.xyz will support Elysium spot trading from day one as well, which is going to be awesome. ah Infrastructurally, there's like Alchemy, Quicknode, Chainstack, Enigma, i'll Conduit themselves, of course, Codex, which is defined for those that know.
Speaker: ah Privy is also integrating Pimlico, you know, Allium, which is another big one from on the data side. So yeah, like a lot. Like builders should have pretty much everything that they need ah for success, like, you know, immediately.
Speaker: And what about like new primitives that could be created through this? set are like ah or I don't even know if it would make sense for you to say ah talk about something like this or if that's something that you're like focused on. But I guess that's what I'm curious about ah at first when there's like a new chain or it's like something new is possible. And the the way you explained it so far, I think that you made a good case for why the chain should exist. But maybe maybe have like um ideas or like are in contact with people or like,
Speaker: want to push give people ideas or whatever of what what can be done with this. yeah Yeah. ah A big one that I i was talking about recently, like this is maybe selfish, but like I'd love for people to build like a really fun game ah fully on-chain on Elysium. and like ah There was this game i played a while back, what it was called, Defi Land on Solana. This is like Alameda era. because like what was it Was it like a farmer thing? kind of yeah Yeah, yeah, yeah. I remember that. I played that too. Yeah, that was a while ago.
Speaker: Yeah, yeah. Selfishly, I would love for somebody to build like a really cool experience where, you know, you can walk over to your farm and like that be like, again, like whatever yield you're getting on Elysium and, you know, like walk into the Coliseum and trade perps on Hyperly Good, you know. So like I would love for somebody to do that. But again, that's just, you know, more selfish. Yeah.
Speaker: And then, you know, going on that point and talking about actually more interesting DeFi primitives outside of like consumer, ah fully on-chain options order book would be fucking incredible, right? Like Elysium is the perfect place to do that. The protocol itself can be the counterparty and hedge with perps, for example.
Speaker: that's That's a perfect example. um You know, people can replicate hyperliquid liquidity or hyperliquid pricing and do fully on-chain versions of perps that basically settle to hyperliquid on Elysium. That would be awesome.
Speaker: um tokenized perps which are going to be cool like leverage tokens essentially so bounce tech is bringing those over that's going to be really fun um they need the precompiles to be live which will be like few weeks after mainnet but that's an example but that's going to be stuff like ah like bitcoin 3x like ftx yeah exactly or exactly exactly Yeah, like imagine like Bitcoin 3x, you know, paired against, you know, a meme coin like that that. This was tried on HyperVM and again HyperVM kind of broke when this happened because like people were super excited about it and like a couple thousand people using the chain like went to like $30 swaps for gas. um
Speaker: So that was one example. The other day, like, you know, during the Elon and Jokin Miller post, like, HyperVM swapped for like $100, which is obscene. yeah So yeah, so so seeing this type of activity, like all the really cool stuff that you can, you know, do by composing with Hyperliquid's liquidity and and order books on a general purpose ecosystem is like my dream come true, right? So, you know, in 2024, when HyperVM was announced, like, this is what excited us about Hyperliquid, right? It's like, you have, you could we could finally end the...
Speaker: monopoly, if you will, of Binance King making their L2, but it being totally two separate environments. Binance UKYC, BSC is the playground. Or Coinbase and BASE relationship where Coinbase UKYC and BASE is the playground. And you know there's so, so many more examples of this. And this was supposed to end you know with HyperEVM and that that just hasn't been the case, but Elysium will be you know what what ushers in this new era, we believe. um And people are very excited about that vision, which you know is extremely humbling and and we're very grateful for. So yeah, yeah finally, Hyperliquid would basically represent the environment where there's a ton of liquidity and you do all of your kind of derivatives trading and then everything else should be happening on Elysium. Like this is the goal.
Speaker: so Do you think this kid could um increase the the spot volumes overall? Because I think what many people are not so aware of, or at least I wasn't really aware of before I looked into stuff a bit before this episode, that and we always hear about like the derivatives volume of hyperliquid versus other satellites exchanges or other exchanges in general. And obviously they're taking a lot of ah market share there. But when it comes to spot volumes, even though like unit, I think unit is great, you know, like no KYC spot trading or whatever. But the the volume isn't really up to to anything. Like it's as we saw now with the Binance hack, Binance has like 130 billion or 120 billion assets on the management, even though Hyperliquid already kind of like caught up a little bit to their perps volume, but people just use it as like their spot bank or like just to spot trade kind of everything. And that is kind of what is still missing from the on-chain, Hyperliquid ecosystem.
Speaker: Yeah, exactly. So with that said, ah
Speaker: So for example, Bitcoin on Hyperliquid is apparently the most liquid form of Bitcoin trading on chain, but it's completely unutilized relative to what it should be. right Like Hyperliquid last month made 15 month lows against Binance Spot Volume.
Speaker: right so It's just sad to me that that's not being used anywhere near as much as it should. And Elysium is a perfect environment where that can be the case. So the really cool part about being built on top of Hyperlika that I probably should have mentioned earlier um for listeners, because I know like, you know, it's probably easier to cram a lot of this in in a shorter period of time for the sake of attention spans. myself included, is that all the assets that are deployed on Hyperlequid today, whether it's a spot token like KNTQ for example, or spot majors that UNIT has deployed. So BTC, ETH, SOL, PUMP, XPL, ah you name it, right? Like literally anything.
Speaker: we inherit Elysium. So as long as they are linked between HyperCore and HyperVM, which you can do as a deployer of these assets, then they have a ah canonical deployment on Elysium already.
Speaker: So on Elysium day one, you'll have Bitcoin that's deployed by unit. You'll have ETH that's deployed by unit. You'll have SOL that's deployed by unit and so on, any of these tokens. So there can be an environment where people can trade these assets in an environment they're a lot more used to trading them on.
Speaker: ah you know, rather than like doing it on a centralized exchange or rather than doing it on Hyperliquid directly, um they could do it on Elysium and if a prop AMM or some other liquidity provider is facing this end user who's swapping against BTC liquidity, why wouldn't they be hedging it on Hyperliquid? Like this is, yeah this is the perfect example. So I can't wait, you know, like, you we go live ah publicly on Monday next week. So I can't wait to look back, you know, three months after the precompiles go live, which is a few weeks after mainnet, and see like how much volume came from Elysium.
Speaker: Like how much hyperlinked volume came from Elysium. I think this is going to be really interesting chart to watch. um And yeah, we're going to nerd out very heavily over over watching that happen. So yeah, the point is... ah Yeah, we're we're we're quite excited, right? ah ah Elysium is ah it's kind of our our life's work, if you will, at Kinetic, and you know it's it's the the biggest thing we've ever undertaken. um So yeah, i mean, what i what I've talked about for, I think, a year and a half now, right, is like, you know, Kinetic is just as much a liquid staking protocol now as like Hyperliquid is just a perplex, right? Like Hyperliquid is so much more than that. And now Kinetic is so much more than that, right? like
Speaker: Hyper the Grid with this platform, you know, perps were its wedge into bringing everything else you know over, right? And perps are where it's dominated.
Speaker: But now the general purpose component is where Kinetic can help it dominate outside of just perps. So the same with us, right? Like K-Hype and our liquid staking offering was our wedge. and And now, you know, with the general purpose ecosystem opportunity at hand, you know, we can help usher in this, again, this new era for hyperliquid. So this is what drives the shit out of us on on this day in, day out.
Speaker: Is there a scenario, um I don't know if it makes too much sense with everything that you've said so far, but like, because ETH has like many different layer twos and then they kind of cause all of this liquidity fragmentation because everything is kind of like siloed off, that would it even make sense to have like someone else do a Hyper EVM layer two as well in like,
Speaker: as a competitor to you? would they even be like in a Is anyone else even like in a position where it would make sense for them to do that? Or would it make sense to do as a whole in addition to the ecosystem?
Speaker: i i So I don't see where that would make sense, right? Like people already had enough trouble thinking of like, why the fuck Kinetic is doing Elysium? Like an L2 for Hyperliquid. Oh, why does Hyperliquid need an L2? So like if there was another one, i don't know how people would feel about that. I don't particularly think it would be taken too positively. but But yeah, the other side of it too is that the the the Kinetic positioning makes this super unique, right? We're already the biggest application on Hyperliquid.
Speaker: More than half of all Hyperliquid flows through Khype, which is our asset. um you know We have played such a big role in building the hybrid ecosystem ourselves by hand, right bringing over options, protocols, bringing over you know tons and tons of money market liquidity and tons of usage, unlocking a lot of the hype that would otherwise have just sat there stay stale on hybrid core.
Speaker: um you know, into like a defined environment, right? Like i don't see why anybody would um think it's like a smart decision from a business perspective to do, but are we always open and welcome to competition? Absolutely, right? Like glad we do this all the time in the LST space. So if somebody wants to do it, I do wish them the best of luck. But but yeah, I don't particularly see where there would be benefits for Hyperliquid in that regard. um You know there would just be more liquidity fragmentation and and whatnot, whereas like on HyperVM, there's nowhere near as much liquidity as there should be. Elysium kind of ends up being this environment where applications are extremely excited to deploy, users are extremely excited to trade on. ah
Speaker: so like naturally, there should be quite a lot of liquidity. ah But yeah, I mean, again, like I said, I could be totally wrong and like this may not be an accurate take and somebody's like, maybe plotting it as we speak, I don't know, right? But but ah yeah, otherwise I don't particularly see the need. I mean, you know we gave IPVM like a long time to kind of scale up to where you know ourselves and others would have really liked it. yeah And that's not been the case, which is totally fine. But Elysium now comes in and solves this, and I don't particularly believe like others at the moment, at least are are interested in doing it.
Speaker: um But yeah, again, like i said, am I opposed to it? Absolutely not. Like if somebody wants to come join the fun, then please do. Mm-hmm. do Do you have any, um I think last time we talked, you mentioned that the Hyperliquid team is very hands-off when it comes to like any any builders and and whatever. They're kind of just doing their own thing and providing the the ah infrastructure, I guess, and and then everyone is kind of found that for themselves when building on top of that. ah I guess it does this is the same when it comes to building Elysium?
Speaker: For sure. I mean, yeah, like... i don't I don't think that they are going to stop what they're doing for for anything. and in Elysium is obviously included there. I think what they're doing is obviously extremely important. um And again, there's like there's a really... So Hypericode has a little over 2 million users now, right? Like in terms of actual accounts. Like... This doesn't count, you know, somebody who may have 10 or 20 accounts, right? But like, let's just call it, you know, users. um You know, on chain, there's probably tens and tens of millions of users, you know, spread across like Solana and Base and obviously now newly Robinhood chain.
Speaker: Like these these guys need a place as well, right? So like... The really cool part about our relationship with Hyperliquid is Hyperliquid is doing its its thing and like we're doing our thing. And we don't need to bug Hyperliquid about like doing things for us on a daily basis or you know needing foundation support or whatever. That's what makes this so, so unique. And I've talked about this for a very long time is that Hyperlakehood is an extremely, extremely Darwinian ecosystem. It is survival of the fittest. If you build a product that people don't care about, you're going to die. If you build a product that people care about, you're going to win. It's that simple. It's super, super, super simple. um Whereas in most, if not all their ecosystems,
Speaker: If you're not getting foundation support or somebody you know at the quote unquote top, like pushing you amongst their their network and people and please use this and don't use that and whatever, like you know it's kind of problematic, right? Like people don't find it worth building in other ecosystems where that's not the case.
Speaker: So on hyperlink, that's not the case, right? Like it's like you have a bunch of rabid users that are typically extremely well capitalized, ready to put their money where their mouth is. And like this, you know, it's the perfect environment for very, very serious builders who take product quality to heart.
Speaker: And I want Elysium to be an extension of that that. This is what our team is building for. You know, it should be where builders, you know, come to throw down and and like throw everything they have at building the best possible product. It's where like users come to dream again about what DeFi can be and you know having fun with experimental protocols. you know like This is what Elysium should be. and ah yeah like So the HyperLiquid team, you know you know we we stay out of their way with building things on HyperCore. We try not to be annoying. We we don't talk super often, but like when we do talk, it's like if we have a question on documentation or if they talk to us, it's kind of the same thing. Hey, what does this do? What does that do? up that's That's that, right? Otherwise, I would say we have a very good relationship. and like
Speaker: we stay out of their way, they stay of our way, and like it's all good. right so But again, that's what it should be. That's what an ecosystem that like goes and develops itself should look like. Because everywhere else where there's like key man risk at the foundation is just extremely bearish. um So yeah, that's that's why i think we're starting to see a lot of really crazy excitement about Elysium, which is, again, very humbling. ah it's It's just because of the approach here. like People naturally love Hyperliquid and um hopefully they love how we're going about building this ecosystem. um
Speaker: And yeah, it it ah I think it resonates quite a lot with with people, not just traders, but like developers alike as well. so Yeah, that's my that's my thoughts on it. It sounds very some symbiotic.
Speaker: ah I would say so. And it's just naturally that, right? It's not like there was some agreement between us and Hyperly that's like, hey, like, you know, let's let's let's do this. let's Let's do this. And like, you just let us do this. And while you guys do that, like, no, like it it is naturally symbiotic. We came and did this.
Speaker: They found out the exact same time everyone else in the public found out that we're doing Relisium, right? Like there was no coordination on this in advance and that's how it should be. right so
Speaker: Can you walk us through this process a bit? Because I find that interesting. i didn't when When you announced it, I didn't really know ah what what to to think of Elysium, like what it's supposed to be and then it got a bit more clear over over time. But um now recently you also announced the the integrations with FOMO and PAMFAN at the start. So it's also I guess it was kind of obvious, but I i didn't i kind of thought about it a bit more like this.
Speaker: you know It's hyperliquid L2. It's like more about perps and financialized stuff, but it's also going to be a meme coin chain, I guess, or like a chain where meme coins, shit coins, or whatever are going to happen, because I guess that's just like part of... of k crypto and everything that is that is going to happen but and what i find interesting is the the part where they are um like coins can make more easily get into the hyperliquid spot listings and like HIP3 perhaps can you explain that a bit more
Speaker: Yeah, so that's the cool part about being built on top of Hyperliquid, which is that effectively, given our experience on spot deployments on Hyperliquid and obviously the perp side as well, given we operated a HIP3 offering, um you know we can essentially help, quote unquote,
Speaker: projects graduate, if you will, ah instead of like graduating to quote unquote the bonding curve on like a, you know, some launch pad in whatever ecosystem you want, you know, the graduation curve on Hyper the Grid could be you launch a token on Elysium and you bootstrap liquidity and attention and trading volume on Elysium, like an environment where the on-chain traders you know, love to trade, right? Not just because it's Elysium, but they like trading in more of an AMM format rather than a club, right? yeah It's just, I think it's very obvious, like more sophisticated traders use clubs and less sophisticated traders use AMMs.
Speaker: It's very, very simple dynamic. um So you bootstrap on Elysium and we help you quote unquote graduate the hypercore spot, help you with purchasing the ticker, deploying that asset.
Speaker: And if it becomes really big, Hyperliquid could just list it as a perp, or you can work with a HIP3 deployer of your choice to list a perp for you. essentially. so then Elysium doesn't just be ah and or it doesn't just become, I should say, an extension of Hyperliquid on operating a general purpose gap or um you know adding more liquidity to Hyperliquid perps or trading volume to Hyperliquid perps. It's doing all that plus acting as this native TGE platform for Hyperliquid where tokens have this kind of, you know, if you're if you're if you're trading, if you're TGE-ing on Robinhood chain, like your ultimate goal is to list on Robinhood, right? If you're TGE-ing on BNB, like your ultimate goal is listing on Binance. If you're TGE-ing on BASE, your ultimate goal is listing on Coinbase.
Speaker: But what about, on hyperliquid, right? ah Spot listings don't get any love. um You know, if you TGE on Elysium, your ultimate goal should be hyperliquid perp, right? And maybe even a hyperliquid spot listing. And we can maybe perhaps...
Speaker: usher in the era of like hyperliquid spot tokens being like a super bullish catalyst for tokens that TGE, right? Whether they're from Elysium or or wherever the hell, right? So so yeah, that's that's the thinking in short, like with what you just mentioned, which you know we believe is like a huge, huge, huge selling point for Elysium and and what has made developers and you know, like you said, shitcoiners or whatever alike, they are very, very excited about you know deploying tokens on Elysium, right? Because you have that path directly to Hyperliquid without any of the bureaucracy of like talking with the centralized exchange team and all the bullshit that comes with that. So, yeah.
Speaker: how How expensive is it currently to like ah create a spot listing? Good question. the The price changes with hype price, but it's at minimum 500 hype and that can always increase if like the auction becomes very competitive. So what's that like?
Speaker: A little bit over $40,000 today, roughly? roughly I see. But it does sound like a way healthier path, kinda, because I guess since most meme coin activity is still on Solana, I think a huge problem nowadays is probably that it's just like this... Everyone always wants a runner. Everyone always wants this one coin that goes really high and then that's listed everywhere and whatever, and it becomes this big thing. But we haven't had that in quite a while because it's... all just like pvp in inside of like the before it ever graduate graduates the launch pad and even even if it does you need to like as you said like talk to to buy it in steam or whatever give them some money to like get the listing and all of that and that doing it on the hyperliquid like on on elysium and then through hyperliquid spot listing and whatever seems like a way healthier path to get a token to reach a higher market cap
Speaker: Yeah, it's it's a perfect example of like what you know tokens can find you know new catalysts from. im Like, hey, like you know we listed on Hyperliquid Spot, or we got a Hyperliquid Perp, whether through HIP3 or like the eventual kind of final boss being, you know we got a Hyperliquid Validator Operated Perp, which means like your token should be kicking ass, right?
Speaker: um So, yeah, like you said, it's very interesting. It eats into... like My goal and... You know, when Magnus, Justin, and I were first firm forming up a Kinetic back then, it was like, how do we throw a huge wrench into like the existing centralized exchange listing flow, right? And this is what was supposed to happen with Hyperliquid over the last two years and has not happened. So Elysium is our chance to do that and usher that era in ourselves with this new product. So yeah, yeah I mean, I couldn't agree more. That's exactly what should be disrupted, right? Like giving several percent to like any exchange um and then going through this massively long and arduous you know like listing process. um
Speaker: Hypercore should be like where you know all these assets are trading. And and there's even ah another cool side of it, HIP2, where you can actually ah provide liquidity as well, that's like permanently locked essentially, like in the order book, um which is a very underutilized feature. So yeah I mean, I can't even explain how how interesting this all is. And HIP2 also acts as like an AMM, if you will, in the order book, so to speak, and it guarantees a 30 basis point spread every three seconds. So like this is very, very underutilized technology and like Elysium, in my view, like helps usher that in. So yeah.
Speaker: I think it it's definitely a very good spot to fill because I feel like Hyperliquid with all that it does well. I mean, we we talked about that there's definitely improvement on the spot side, but I think also something that Hyperliquid is lacking sometimes versus other exchanges is like speed of like g listing stuff, or I guess They do kind of like list stuff fast, but like the listing offering isn't as extensive as like on Binance or Bybit or whatever, because they don't um just list everything. But this is like ah an easier way to to do that and to have like more listings available.
Speaker: Yeah, exactly. And like, it again, that's another kind of, I can't even say intangible, but that's another component of Elysium being value-creative to hyperliquid is, you know, even if it brings it more listings, right, whether it's like spot or perp, you know, we would be directly contributing to hyperliquid making more money and hence buying more hype off the open market. and um It's so unique, right? Like we have this situation where like both K&TQ and Hype see tremendous upside in different ways, like from different forms of, you know, activity that come from Elysium. And it's it's just, you know, it's a dream come true really, I think.
Speaker: So yeah, we're we're super stoked. Yeah, I think um I kind of like talked about everything that i wanted to talk about now. And I definitely have a way better picture of what Elysium is after after this ah conversation. um Is there anything you think we've missed so far? or Anything you still ah would would like to talk about?
Speaker: No, I think that's pretty much it. I mean, you um you asked some really great questions. I think I was able to talk a lot about like what Elysium is and kind of give people a picture um that they may not have had before. um So yeah, no, I thank you a lot for having me on and and having this conversation because again, I think like that's going to be the big, ah you know,
Speaker: thing for us to tackle is like, you know, why another l two y another Why another chain? And like, i hope this gives you specifically already, you know, ah kind of those reasons. And then through this podcast, hopefully, you know, gives everyone who listens kind of, again, that context as to why yet another chain. um And I still remain you know very, very ah you know bearish on what the typical L2 setup looks like. Hence why we'll never be that and why ah you know this this has been crafted in such a unique way to basically provide direct value to the whole, quote unquote, host chain. And like you said earlier, be extremely symbiotic. So as long as that's the case, then we're accomplishing our mission. And and ah you know that's that's where it wakes us up and yeah keeps us going every day. So yeah.
Speaker: I think this ah this is very cool because I think last time, i don't remember if I said it during the episode or after, but I remember that I thought it was a very technical talk, which I found kind of cool and interesting because um that is something that was like way more of a thing years ago, i guess. so like we we We also went a bit over like what what happened a couple of years ago with how the po technology developed and everything. and I find it kind of cool to come back to that sometimes with with stuff like Elysium, with like, okay, there is still like tech, there is still like stuff that is interesting. Because I used to be like into all of the the Ethereum, the layer two and the the technology and how all of that worked. And then over time, as it just kind of became less and less interesting.
Speaker: But um I think this these kind of things are kind of needed to push the space forward. Like we need... new stuff to like the cycle doesn't just like come and then like stuff suddenly appears and then prices go up. But we need innovation and like people trying things and and new things being done for to have a proper new cycle to like maybe onboard some new people or get like other people to come back and find interest again and see that there's still stuff going on and new possibilities that they can utilize. yeah
Speaker: Exactly. Exactly. And like what we're noticing is a lot of like what we would consider DeFi OGs are getting very excited about this. And that's very um that's very encouraging, right? Like ah again, like what Hyperliquid has done here has set the stage for somebody to come and create an ecosystem on top of that liquidity.
Speaker: And if that's the case, then Hyperliquid gets a moat that no other perp decks like LIDAR or variational whatever fuck. ah can compete with, right? Because, you know, you can compete on liquid liquidity, you can compete on pricing, you can compete on on the tech, but you can't compete with an ecosystem that's like sitting there permanently using your liquidity, right? So, um yeah, I mean, it's ah it's unprecedented is is the reality.
Speaker: Yeah, that's ah that's a great way to end this conversation. So thank you very much for coming on once again. Thank you for the time. ah Super glad to have done this again and maybe we run back a part three in the future after Elysium's live at some point.
Speaker: and Maybe Elysium is ah the biggest chain in 2027 and ushered in the new news cycle. Hype is at $1,000 and we will find each other again. we got to get back to work to make that happen. so yeah
