The alarm blared at 5:00 a.m., jolting Jeff Yan awake. This particular ringtone was designed to alert him when something unusual happens on Hyperliquid, the decentralized crypto exchange he co-founded. That early October morning, the situation was certainly unusual.
On that day, over $19 billion in leveraged positions—or trades where investors risk more capital than they possess—disappeared following President Donald Trump’s threat of new tariffs on China, as reported by CoinGlass. “I’m just looking at it and praying that it’s good,” Yan said, hoping for the best for his exchange’s systems. After analyzing the data intensely for one hour, he felt assured that the platform had performed as expected, enduring a severe stress test while thousands of traders faced losses and some profited from shorting the market.
In the weeks that followed, the crypto industry would label the events of October 10 a flash crash, marking the largest liquidation event recorded by CoinGlass—an incident whose consequences are still being felt in the industry two months later. This incident also signified Hyperliquid’s rise as a noteworthy player in the crypto space.
According to CoinGlass data, Hyperliquid liquidated over $10 billion in positions that day, significantly surpassing the $4.6 billion and $2.4 billion liquidated on established exchanges Bybit and Binance, respectively. (The $10 billion reflects the total of leveraged positions liquidated, not the actual losses incurred by traders.)
While major exchanges like Binance and Coinbase employ thousands, the team behind Hyperliquid Labs, which supports the exchange and its blockchain, consists of just 11 people. However, within two years, Hyperliquid has positioned itself among the industry’s giants, boasting approximately $140 billion in derivatives volume last month, based on data from DefiLlama. This success has translated into over $616 million in annualized revenue, with its associated cryptocurrency, HYPE, reaching a market capitalization close to $5.9 billion, according to DefiLlama.
Crypto Innovator
Unlike many flamboyant figures in the crypto world, Yan prefers to avoid the spotlight. With black-rimmed glasses and a professional demeanor, he admits he feels uneasy with attention. While willing to discuss his past, he emphasizes that Hyperliquid operates as an ecosystem rather than a solo effort.
Yan’s contributions to the crypto landscape are evident. A Bay Area native, he excelled academically, winning medals at the International Physics Olympiad and later studying mathematics and computer science at Harvard. His calm and composed manner has been noted by peers, including Vladimir Novakovski, who recalls interviewing Yan for an internship.
Post-FTX Landscape
During Yan’s career, the crypto sector was shaken by the infamous Sam Bankman-Fried and his trading firm, Alameda Research. Bankman-Fried’s activities led to significant losses for customers, highlighting the importance of transparency in trading platforms. Yan and his team felt compelled to create a more transparent alternative after the collapse of FTX.
Even before the FTX debacle, Yan had been contemplating the development of a decentralized exchange. However, the industry was flooded with clunky decentralized platforms lacking user-friendly interfaces. Determined to build a platform they would want to use, Yan and his team focused on optimizing user experience and speed, which has proven pivotal for their success.
Future Prospects and Challenges
Looking ahead, Yan envisions Hyperliquid as the financial infrastructure equivalent of Amazon Web Services. The platform is currently facilitating trades that extend beyond cryptocurrencies, incorporating asset listings tied to major stocks. Yet, the future remains uncertain, as competitors are eager to challenge Hyperliquid’s growth, and regulatory scrutiny is a looming concern.
Yan has indicated plans to expand his team by nearly 30%, aiming to bolster Hyperliquid’s capabilities and navigate the evolving competitive and regulatory landscape effectively. As Hyperliquid grapples with these challenges, the crypto community will be watching closely.
