The alarm jolted Jeff Yan awake at around 5:00 a.m. It was a ringtone designed to—among other scenarios—blare out when something abnormal occurs on Hyperliquid, the decentralized crypto exchange he had cofounded. And on this morning in early October, things were very abnormal indeed.
That day, crypto traders saw more than $19 billion in leveraged positions—or bets where investors wager more capital than they have on hand—evaporate after President Donald Trump threatened China with another round of tariffs, according to data from the crypto analytics site CoinGlass. “I’m just looking at it and praying that it’s good,” Yan said, referring to his exchange’s systems. Within one hour, using his “every brain cell” to analyze the data, he was confident that the platform had worked as intended—surviving a stress test where thousands of traders lost money and others who were shorting the market cashed in.
According to CoinGlass, the platform liquidated more than $10 billion worth of positions that day, a figure that far outstripped the $4.6 billion and $2.4 billion liquidations that took place on longtime crypto exchanges Bybit and Binance, respectively. (The $10 billion figure refers to the total amount of the leveraged positions liquidated; the actual funds traders lost on their bets was lower).
But Yan wants Hyperliquid to become even bigger. “It’s something that no one else is really trying to build exactly at this point in time,” he said, “which is something that can really upgrade the financial system.”
The crypto world has long been defined by flamboyant and outspoken figures. Yan doesn’t fit that mold. Sporting black-rimmed glasses, trim black hair, and usually wearing crisp shorts, he said he is uneasy in the limelight. “This sort of celebrity is foreign to me,” he said, referring to how it felt to be mobbed at a recent crypto conference in South Korea. While willing to chat about his background, he stressed repeatedly that Hyperliquid is an ecosystem, not a one-man operation.
FTX was a black box. Bankman-Fried plowed billions of dollars in customer funds into ostentatious real estate purchases, risky venture investments, and political lobbying campaigns. Only after FTX declared bankruptcy did customers see how much of their capital Bankman-Fried had gambled away.
Yan wanted to create a more transparent trading platform for crypto perpetuals, or “perps.” He and his team had thought about building their own decentralized exchange prior to the collapse of FTX, but the “FTX thing solidified my conviction that it was the right time to build this thing,” he said.
Yan, though, was a trader, and he and his team decided to build a platform they would want to use. “I think it is good when the people building the product are very familiar with who the customer is,” said Novakovski, the crypto founder who interviewed Yan for an internship.
Unlike Bankman-Fried, Yan cut an image that was more polished, professional, and sincere, according to a longtime crypto executive who’s met both founders. “Jeff has cut his hair. SBF did not,” they said, asking for anonymity to speak more candidly. “SBF’s shorts were too long and didn’t fit. Jeff’s look crisp and together.”
And, as opposed to Bankman-Fried and countless other crypto founders, Yan and his team decided to eschew raising money from venture capitalists. They were already making a sizable amount from their crypto trading operation, and Yan decided to front the cost himself. “If we’re going to build something that’s really going to be a credibly neutral platform on which everyone else can build, then a really important principle is to sort of not have insiders,” he said.
In 2023, Yan and his team launched Hyperliquid and the blockchain on which the decentralized exchange is built. For months, volume grew steadily, but interest in the exchange exploded in early 2025, according to data from DefiLlama.
Hyperliquid is optimized for speed. For many traders, seconds mean the difference between profit or loss. “I’m the one user who keeps bugging the team to add more features, and they keep rejecting every feature that I ask for because they want to keep it extremely fast and extremely nimble,” said Thanos Alpha, a pseudonymous Hyperliquid user who said he’s a power user on the platform.
This speed, combined with engineering solutions that allowed Hyperliquid to accommodate larger trades than competitors, set it up for success, added the pseudonymous trader, who said he’s an avid DeFi user but declined to give his real name—a common request from crypto diehards.
Still, there’s no guarantee that Hyperliquid will continue to expand, especially as competitors look to challenge Hyperliquid’s newfound dominance. That includes Novakovski, who has since launched Lighter, his own competing crypto derivatives platform backed by Founders Fund, Ribbit Capital, and David Sacks’ Craft Ventures. And then there’s Aster, a Hyperliquid copycat that’s closely aligned with the crypto exchange Binance.
A spokesperson for Hyperliquid Labs said that the website for Hyperliquid screens traders for risky behavior and enforces sanctions compliance, adding that ”any confirmed high risk activity on the application is immediately flagged and the addresses blocked.”
And, if Hyperliquid continues to grow, the ecosystem may attract more regulatory scrutiny. “It’s a big question about how long they [Hyperliquid] will be allowed to operate in this non-KYC way,” said a crypto market maker, referring to know-your-customer laws, which require financial institutions to collect user identification. The market maker asked for anonymity to talk more candidly.
“The bigger they are, the bigger the question usually becomes,” added the market maker.
“We are proactively engaging with regulators and policy stakeholders to support greater clarity for decentralized finance,” a Hyperliquid spokesperson said in response.
