Author: New World of Ray

Recently, the listing mechanism publicly released by Hyperliquid has sparked heated discussions. However, the reason why this issue can attract market attention is inseparable from a tweet posted by Simon, the CEO of Moonrock Capital, on November 1 this year. He claimed that "Binance requires a potential project to provide 15% of its total token supply to ensure its listing on the CEX, which accounts for 15% of the total token supply, worth about $50 million to $100 million".

At the same time, Andre Cronje, the co-founder of Sonic Labs, also wrote that "Binance does not charge a listing fee, but Coinbase has repeatedly demanded fees, quoting $300 million, $50 million, $30 million, and the latest quote is $60 million."

Why is there always a dispute over listing fees?

In the Crypto world, which is mainly based on the spirit of decentralization, the centralized CEX has become the main participant. However, the black-box operation of CEX listing is difficult for the market to accept, and there are "rumors" about CEX listing circulating from time to time. Binance founder He Yi once stated "no listing fees were charged" after listing PNUT and ACT, and even Binance needs to get rid of the public opinion vortex of "listing fees" through the listing itself.

He Yi's response to the controversy over listing fees

Nevertheless, it is still difficult for the market to be fully convinced by the CEX's claim of no listing fees. Even if there is no "open and aboveboard" charging, there are still constant rumors about hidden token fees. Some top CEXs may clearly list no listing fees in their announcements, but after listing, the project party still needs to pay a corresponding deposit to ensure the stability of the token price, and the CEX's investment share and activity expenses, etc. need to be agreed with the CEX at the time of listing. These hard-to-explain hidden listing fees have also become the reason for the market to determine the "black-box" operation of CEX listing.

On the one hand, this cumbersome and opaque listing mechanism is an additional burden for the project party. The project party needs to spend extra costs to deal with the CEX's listing affairs, which will lead to the problem of adverse selection. The project party is not focused on long-term development, but instead will have the expectation of "successful listing", which will ultimately lead to most of the listed projects running away after cashing out.

On the other hand, the unfair listing of CEX has even evolved into a niche track. Researching listing has become a legitimate "business", and listing study has become a must-take course for many investors and KOLs. For example, the recent Equation News made a profit of $3 million by trading on the news of ACT's listing.

Equation News made a profit by trading on the listing announcement

It can be said that the crypto industry has long been plagued by centralization, and the wealth effect of each listing is almost taken away by the CEX (listing fees), scientists (front-running after listing), and the retail investors end up footing the bill. The listing event and the current logic of retail investors embracing memecoins and rejecting VC coins are of the same nature, the core of which is still inseparable from fairness.

HYPE hits new highs, what is the market optimistic about?

However, the emergence of Hyperliquid has broken the deadlock of "black-box listing".

Hyperliquid's rise to prominence started from the surge of HYPE. HYPE has entered the top 50 market cap in just two weeks after its TGE, surpassing projects like Fantom, Bittensor, and even Arbitrum itself. Although the narrative of Perp DEX is no longer new, Hyperliquid has successfully refocused the market's attention on DEX.

The indispensable listing mechanism

Today, HYPE has broken through $20, setting a new historical high. Behind the new high, on the one hand, it is inseparable from Hyperliquid's accurate "market aesthetics", which has keenly captured the market pulse of this cycle's "VC to meme" transition. As a project that looks like a "VC-backed" one, Hyperliquid did not take the old path of VC financing, inflating volume, and then cashing out after listing. Its founder Jeff has also publicly expressed his dissatisfaction with this form and market logic many times.

On the other hand, Hyperliquid's team operations and project development are also top-notch. Hyperliquid's ambition is not limited to PerpDEX, but is also actively building a "trading" public chain characterized by low latency, high throughput, high-frequency trading, and order book. When the underlying logic shifts from PerpDEX to public chain, it also opens up its valuation ceiling.

In addition to the above reasons, Hyperliquid's successful public and transparent listing mechanism is also an indispensable factor. So how does Hyperliquid list specifically?

Dutch Auction

Hyperliquid uses a Dutch auction to auction the token ticker, and its listing process is also relatively public and transparent, with detailed introduction in the official documentation.

First, if a project wants to list on the spot market, it needs to apply for the deployment permission of the HIP-1 native token (HIP-1 is the token standard formulated by Hyperliquid), and then the final token ticker will be determined through a Dutch auction mechanism. Dutch auction, also known as a descending price auction, starts the auction at a price higher than the market expectation, and then gradually lowers the price until the first bidder accepts the price. From the perspective of game theory, the Dutch auction reflects the true psychological expectation of the bidder, and can realize the auction at a fair price.

Hyperliquid's spot deployment process

When the project party deploys tokens on Hyperliquid, they need to pay a gas fee, but this gas auction fee will be refunded to the HLP Vault in the future.

At the same time, Hyperliquid's auctions are usually held every 31 hours, with a maximum of 282 spot listings per year. This passive "quota" approach also indirectly improves the quality of the listed projects.

In summary, compared to the opaque black-box operations that confuse the public in CEX, Hyperliquid's listing mechanism is publicly transparent, and the collected gas auction price will be returned to the community in the form of staking, forming a virtuous cycle.

Derivative Gameplay of the Auction Mechanism

With this open auction mechanism, more interesting paths will emerge in the future. For example, this auction mechanism will also lead to "ticker" disputes. At the beginning of this year, when zkSync was listed on various major exchanges, Polyhedra Network, which initially used the ZK token ticker, gave the premium ZK ticker to zkSync, and then changed its token to ZKJ.

It can be foreseen that in the future, more projects will launch on Hyperliquid and there will be similar "fights" to compete for the most suitable token ticker. Project parties will go all out to fight for a ticker that better suits their own, and stories similar to "Sina invested $8 million to buy weibo.com" and "Finance was auctioned off by Moniker for $3.6 million in 2007" in Web2 will also be staged on Hyperliquid soon.

The "Big Loser" who spent $180,000

After Hyperliquid's TGE and the completion of the "epic" airdrop, the auction price has been constantly breaking new highs. As early as around June this year, its auction ceiling was hovering around $35,000 and was unable to break through this previous hard ceiling. However, after the TGE, Hyperliquid has received unprecedented market attention, and this time it directly "pushed" to $128,000, breaking through the previous shackles. On December 11, it reached a new high of $180,000 in the FARM auction.

The previous record-breaking $128,000 ticker battle was for "SOLV", and it is noted that Solv Protocol will have a TGE in the near future, so it is highly likely that this ticker was won by Solv Protocol. Previously, the token tickers auctioned on Hyperliquid were mostly memes, such as PIP and CATBALL.

After this airdrop, the popularity of Hyperliquid has also started to soar. The record-breaking auction of SOLV was a turning point for Hyperliquid to transition from the meme paradise to the mainstream onboard, and Solv Protocol will be the first top-tier project to be launched on Hyperliquid.

At the same time, Solv's login has brought a significant "catfish effect" to Hyperliquid, not only setting an example for the subsequent ticker auctions of Hyperliquid, but also pushing the trading structure to a more positive direction.

Hyperliquid Auction History

On the one hand, after the price ceiling was broken by the Solv auction, the token tickers auctioned by Hyperliquid afterwards also "got better". The market took the SOLV auction as a reference for post-TGE pricing, and tickers like BUZZ and SHEEP reached over $100,000 in bids, with the lowest HYFI also transacting at $90,000. Subsequently, the FARM ticker on December 11th even refreshed the historical record at $180,000.

The final owner of the FARM token ticker is @thefarmdotfun, who is building the world's first GenAI agent game, where users can generate different types of pet AI agents through the GenAI model. When these AI pets are minted or traded, FARM tokens will be used for charging. With a fixed total supply, 50% of the FARM used as fees will be burned. The $180,000 for FARM was not in vain, as it reached a market cap of $30 million within a few hours of opening, approaching $50 million. This has also opened up the imagination space of the Hyperliquid ecosystem once again.

FARM reached a market cap of nearly $50 million on December 13th

On the other hand, according to AXSN's data, the daily trading volume of the HYPE token has already monopolized the Hyperliquid trading volume, reaching $360 million, far ahead of tokens like PURR, PIP, and JEFF. With the login of SOLV, the trading structure of Hyperliquid will be further optimized. With the market attention and discussion brought by the Solv Protocol login, more project parties will choose to launch on Hyperliquid, and the trading volume will be more dispersed in the future.

Hyperliquid Trading Structure Distribution

What has Hyperliquid changed?

As Hyperlqiuid founder Jeff said, "ownership goes to the believers and doers, not rent-seeking insiders". The development of Hyperliquid is also in line with this.

Mutual Pursuit with Project Parties

For VC coins, listing on Hyperlqiuid is also a mutually beneficial and symbiotic market behavior. The auction itself is also a form of advertising. Without paying additional advertising fees, Solv has become the traffic center of market discussion by winning the Hyperliquid auction ticker.

For many shitcoin projects, even if they have been listed on major exchanges, it is still difficult to maintain a stable price, and if they cannot be listed on top-tier CEXes during the bull market, they will basically be unable to maintain a good-looking "K-line", without liquidity and traffic, let alone any subsequent stories. Most obscure tokens listed on exchanges end up as "high heels" or "Christmas trees".

Many tokens are difficult to maintain a stable price even after being listed on major exchanges

Hyperlqiuid provides a more economical solution, which can temporarily meet the demand of those who cannot launch on major exchanges, and can also "grab a seat" on a decent trading platform at low cost. After the subsequent integration of HyperEVM, the tokens purchased on Hyperliquid can be used in other EVMs, further highlighting its relative advantage in cost-effectiveness. Although currently Hyperliquid does not have the same strong listing effect as CEXes, the widespread market attention on the SOLV auction event has further highlighted its status in the eyes of the crypto community.

Hyperliquid's epic airdrop is more like a resounding market education, allowing more people to recognize Perp DEX, understand, contact and use it; the transparent listing plan is also the first shot fired against the black box operation, rebellion, struggle and victory.

From the industry's perspective, the emergence of Hyperliquid is both a historical process and a choice of the times. Under the clamor of the masses, the market has voted with its feet again and again, choosing fairness. Hyperliquid's open listing mechanism is a revolution against the black box operation of the existing CEX listing, forcing the entire industry to become more open and transparent.

What kind of entrepreneurial spirit does Crypto need?

Often, the founder of a company determines the spiritual core of that company. This statement is vividly illustrated in Hyperliquid.

Founder Jeff no longer trusts CEX after the FTX collapse and does not accept any VC investment. In Jeff's eyes, most projects will first obtain the endorsement of top-tier institutions, then polish the data through various so-called point plans, and finally complete the exit through the listing on large exchanges. This industry model seems to have become the ultimate template for most projects to achieve success: write stories, raise investments, and list on major exchanges. Ultimately, the retail investors bear all the consequences, leading to a mess, and this kind of short-sighted industry chaos is ultimately unsustainable.

Ultimately, Hyperliquid witnessed the victory of Jeff's decentralization spirit, and the transparent and open mechanism and the strong cohesive force of the community have pushed PerpDEX to the climax of 2.0. Jeff can proudly say: We have not distributed tokens to any private investors, centralized exchanges, or market makers. The bullet shot out years ago is now hitting the bull's-eye.

The history of Crypto's development has also been a history of the struggle for decentralization, from the birth of Bitcoin to the uppercase and lowercase disputes of Neiro. No matter how Crypto evolves, victory and justice will always be on the side of the masses, on the side of fairness, and on the side of decentralization.