Macauley Peterson

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/0xresearch" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Hyperliquid has become the dominant venue for onchain perpetuals, leapfrogging <a href="https://blockworks.co/tag/dydx">dYdX</a> by embracing a radical idea: full transparency. Every resting order is hash-linked to a wallet, whose P&amp;L and liquidation level are visible to the network. This “L4” order book is more granular than TradFi’s L3 venues, which conceal trader identity, positions or leverage levels.



Hyperliquid’s radically transparent market structure has no informational asymmetry between participants — and given its stellar growth, it’s working. But is it optimal?



Jeff Yan, the founder of Hyperliquid Labs, argues yes. In a recent <a href="https://x.com/chameleon_jeff/status/1929753039969440212">X thread</a>, he likened the design to ETF rebalances and electronic lit markets in equities. His thesis: Transparency lets market makers identify non-toxic flow, tighten spreads and scale liquidity, even for billion-dollar whales.



Yet, Variational, the team behind a new derivatives protocol on <a href="https://blockworks.co/tag/arbitrum">Arbitrum</a> called Omni, is betting on the opposite design choice: total privacy.



Critics like <a href="https://x.com/ThomasUhm/status/1929170772095815702">Thomas Uhm</a> and Edward Yu (Variational’s co-founder) <a href="https://x.com/mr_plumpkin/status/1929059419326918822?s=46">pointed out</a> a potential flaw: Transparency benefits uninformed flow — not alpha traders. “If you’re a profitable trader with edge, you want to move in stealth,” Yu told Blockworks. “Otherwise, the market will price in your impact the moment your intent becomes visible.” For example, “if someone can see your flow ahead of time through L4 data, they can frontrun, fade or cancel. Your alpha disappears.”



Omni, which announced today that it has raised $1.5 million in strategic funding from Mirana Ventures, Caladan, Zoku Ventures among others, is a peer-to-protocol trading venue, CEO Lucas Schuermann explained to Blockworks.



Users RFQ directly against an integrated market maker — the Omni Liquidity Provider (OLP). There’s no public book. No shared intent. Every fill is private.



When a trader joins Omni, they receive a segregated individual smart contract to hold all their funds. “We call it a settlement pool — essentially an escrow account for the margin that sits between the user and OLP,” Scheurmann said.



Omni is explicitly designed to shield traders. It’s a philosophical fork from the Hyperliquid hypothesis. Schuermann explained that the architecture evolved from institutional RFQ rails: “We essentially took all of our experience and infrastructure and market making liquid products…and we put that knowledge into OLP,” Schuermann said. “But after building all this infrastructure, we realized it could solve problems for retail.”



This private structure enables more than just discretion — it also redistributes protocol revenue. OLP vault depositors <a href="https://docs.variational.io/variational-omni/about-omni/the-omni-liquidity-provider-olp#how-olp-is-funded">will eventually</a> earn market-making profits, while traders receive partial refunds on losing trades. “We don&#8217;t want to sell the order flow to a third party who&#8217;s going to extract value. We want to give it back to users.”



This may sound similar to Hyperliquid’s HLP model, but the design philosophies differ sharply. Hyperliquid’s HLP vault allocates capital to in-protocol market makers who compete to quote tight spreads on the order book, with profits or losses passed back to HLP depositors. By contrast, the OLP vault routes liquidity to external venues — including Binance, Bybit and even Hyperliquid itself — where it acts as a taker, not a maker. This lets OLP sidestep the toxic flow and predatory dynamics that can come with posting passive quotes, especially on transparent books.



It does introduce custodial risk for liquidity providers, comparable to holders of Ethena’s synthetic dollar product: Funds leave the Omni protocol and rely on third-party exchange APIs and account controls.



Variational mitigates this risk by maintaining control over those deployments and publicly tracking all balances and trades for the OLP strategy. The added operational risk is compensated by what the team believes is materially better execution.



Omni is part of a broader movement: user-owned infrastructure. And Schuermann believes this model can scale liquidity — even for the long tail of assets, which are usually related to AMM pools like Uniswap or Radium.



Omni routes trades through a competitive, gasless RFQ pipeline where OLP quotes all pairs.&nbsp;



“We pick these up automatically amongst many others, and list them along with hundreds on our platform, but the key thing is OLP market makes them from day one,” he said, noting that making illiquid products liquid is part of the Variational team’s core expertise.



So while it’s hard to see anyone dethroning Hyperliquid right now, Omni may hope to carve out a new lane, one built for retail flow with edge, where alpha is protected and profits flow back to users.



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0xResearch Newsletter

To take on Hyperliquid, Omni bets on privacy

Jack Kubinec

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Not many of crypto’s top 15 tokens by market capitalization were first issued after FTX’s collapse. Two exceptions are SUI, which began trading in mid-2023, and HYPE — which has risen to over $11 billion in market capitalization since being airdropped in November 2024.&nbsp;



HYPE, which is the native token of the Hyperliquid layer-1, has more than tripled in price since a local bottom on April 6, outpacing SOL’s roughly 70% gain over that time span. For crypto investors seeking the next layer-1 token that could capture Solana-like returns, HYPE is generating a lot of hype. Even Galaxy’s Mike Novogratz is <a href="https://x.com/stevenyuntcap/status/1923368561671606595">on board</a>.



Hyperliquid’s core layer-1 appchain, called HyperCore, is purpose-built for Hyperliquid’s order book exchange, which generates fees and leads to token buybacks. This product is very popular: Hyperliquid accounted for 77% of onchain perpetuals trading volume in April, <a href="https://app.artemisanalytics.com/sectors">according</a> to data from Artemis. Hyperliquid also has an Ethereum Virtual Machine network called the HyperEVM, but its adoption is so far more <a href="https://app.blockworksresearch.com/research/hyperliquid-not-done#valuation">muted</a> than HyperCore.



So, there is some confusion on HYPE: Should it be valued like a perps DEX that is maxing out demand in the perps DEX market, or like a layer-1 that could compete with the likes of Ethereum and Solana?



HYPE is priced somewhere in the middle. Ryan Watkins of Syncracy Capital — which has positions in both HYPE and SOL — posted a chart showing in early March how Hyperliquid was trading at a lower fee multiple than other L1s, including Solana.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXftPe5-9rbUN50TMy8G-KUgjTgJB6AKVge5iklezPSJoAXt8p9d5RyxtESy329JFuPrjQE45aE_mJN3AfUfWIOX4qrVpGtOadRoApRcQ3cO3djv1bhWxRjHtpnuk-T5RsDVlbk_?key=ec3LIWV_Fs75WjSNR7Pdyw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://x.com/RyanWatkins_/status/1897302205327401167">Ryan Watkins on X</a>.</figcaption></figure>



But as Blockworks Research analyst Boccaccio <a href="https://app.blockworksresearch.com/research/hyperliquid-not-done#valuation">has pointed out</a>, Hyperliquid trades at a higher fully diluted valuation (FDV) to fees ratio relative to competitor perps DEXs in Drift and dYdX, indicating it is more valuable to investors compared to simple perps DEXs.&nbsp;



Bitwise Research analyst Danny Nelson said Hyperliquid aims to create a vibrant blockchain economy like Solana’s, but it’s “not quite there yet.”



“That said, the ecosystem’s flagship perpetual contracts exchange has become an industry juggernaut. The market is pricing HYPE accordingly, and, I would argue, attempting to account for a future where Hyperliquid hosts yet more winners,” Nelson added.



There are other idiosyncratic factors at play as well. Hyperliquid’s validator set is <a href="https://blockworks.co/news/hyperliquid-decentralization-validator-put">not as decentralized</a> as some other L1s. Hyperliquid does not require know-your-customer (KYC) checks, and most centralized exchanges such as Binance do, and maybe that’s a valuable feature to some traders that is being priced in as well.



For dopamine-deprived token investors, HYPE may look like the kind of opportunity that has been fewer and further between in recent years, but it’s likely too soon to call it the next SOL.



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Hyperliquid

Hyperliquid valued between layer-1 and perps DEX

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Throughout much of the memecoin-fueled boom in Solana application revenue, the leaderboard has looked like this: pump.fun, Phantom, and an established group of so-called trading bots.&nbsp;



That stasis broke in recent weeks as a new competitor quietly climbed the ranks. Axiom, an online trading platform combining trading bot capabilities with Hyperliquid’s perpetual futures product, is now solidly in second place behind pump.fun in terms of Solana app revenue.



Last week, pump.fun saw $12.2 million in revenue, while Axiom was close behind with around $10.5 million, according to Blockworks Research. Phantom, with around $4.3 million, was a semi-distant third.&nbsp;



Axiom was co-founded by a pair of 22-year-old UC San Diego graduates, Henry Zhang and Preston Ellis. The computer science majors “had nothing really to do” in college, but they were both into crypto trading, so they built a couple of projects in their free time, Zhang told me.&nbsp;



Ellis was finishing up college, and Zhang was just starting as a software engineer at TikTok when the <a href="https://blockworks.co/news/solana-memecoins-all-time-high">Solana memecoin craze</a> began taking off. The pair decided to try building a platform that could rival the trading bot of choice, Photon. They built an initial product in mid-2024 and were selected into the winter batch for Y Combinator, the prestigious startup accelerator that counts Airbnb, Coinbase and Reddit as alumni. Zhang and Ellis said Y Combinator connected them with Jordan Fish, the crypto entrepreneur and online personality known as Cobie on X, who offered them advice — including that they should avoid opening up the checkbook for key opinion leaders (KOLs).



Trading bots are kind of like souped-up DEX aggregators that specialize in quickly and successfully landing crypto transactions. They’re popular among users for things like sniping — a term for buying up memecoins right after they are created — and tracking new token launches. Many are built on Telegram, although Axiom is only a web app.



It’s a crowded field, but Axiom has separated itself from the pack in recent weeks. In late February, the trading bots Photon, BullX, and Trojan combined for around 75% of Solana trading bot volume, according to a Dune <a href="https://dune.com/adam_tehc/trading-bots-on-solana">dashboard</a>. Today, Axiom has more than 50% of market share by itself.



Why does Axiom command so much revenue? Blockworks Research analyst Danny Knettel <a href="https://blockworks-research.beehiiv.com/p/bitcoin-yield-reimagined">told Donovan Choy</a> of the 0xResearch newsletter that Axiom’s secret sauce was combining the two most popular trading products of the moment — Solana memecoins and Hyperliquid perpetual futures. Knettel told me he’s heard rumors that other crypto teams are considering merging these two product offerings as well.



Zhang said Axiom’s rakeback program, where power users are given claimable fee rebates as opposed to the tier-based fee system on venues like Binance, is popular among users as well.



Then, of course, Axiom is running a points program, which tends to spur a short-term increase in usage. For what it’s worth, Zhang and Ellis told me they have no plans of launching a token — which tends to be the key ingredient in airdrop farming.&nbsp;



The pair also said they won’t be raising additional venture funding following Y Combinator’s seed check, as the business is already quite profitable.



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Meet Y Combinator’s memecoin bet that made $10M last week

Katherine Ross

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire" target="_blank" rel="noreferrer noopener">subscribe</a>.



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When I talk to folks about success stories in crypto, Hyperliquid is often the common answer.&nbsp;



“Over the past three months, the platform has averaged $6.4 billion in daily trading volume, which sits just above 50% of the daily trading volumes of Bybit and OKX,” Blockworks Research’s Boccaccio wrote in a <a href="https://app.blockworksresearch.com/research/hyperliquid-not-done">recent report. </a>



“As of today, the BTC OI [open interest] on Hyperliquid sits at $1.4B, which is 15% of Binance ($9.2B), 46% of OKX ($3B) and 25% of Bybit ($5.6B),” Boccaccio wrote. 



To put that into perspective, Jupiter Perps — the closest competitor to Hyperliquid — averages $704 million in daily trading volume, 88% lower than Hyperliquid.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdE6OC7whWrP2myWF7sf2xnah1DuCFnVwBWa4y3Sg6HJz2HTu3V4vPF13ASYLqhXAh5bI4dZkFXd1hALE-2S9DH68mGtFF4yGjnMCwOsaWvRcvPNmjvxGuL7acsTFb9WyA4OPhNbg?key=Ciq3U7CPgJ9LFPr2ZJgHd83d" alt=""/><figcaption class="wp-element-caption">A look at perps DEX volumes across the board. </figcaption></figure>



Boccaccio also noted that Hyperliquid’s UX and ability to list popular tokens quickly have helped boost its popularity.&nbsp;



Hyperliquid’s core businesses are HyperCore (the order book exchange) and HyperEVM (the EVM network). Right now, HyperCore is the dominant business, with a valuation of $11.2 billion to HyperEVM’s $61 million.&nbsp;



But that “discrepancy” is warranted, Boccaccio wrote, “given that the core product is, and should be, the HyperCore, while the HyperEVM initially will likely act as a supporting chain.”



The report notes that HyperEVM could be a more profitable product later on, especially if it integrates token launchpads, SocialFI, NFT marketplaces on the chain.



Guess there’s a reason for all that HYPE.



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