The recently disclosed listing mechanism of Hyperliquid has sparked heated discussions. However, the reason why this issue has attracted 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 primarily based on the spirit of decentralization, centralized CEXes have become the main participants. However, the opaque operations of CEX listings are difficult for the market to accept, and "rumors" about CEX listings circulate from time to time. Binance's founder He Yi once stated "no listing fees were charged" after listing PNUT and ACT, and even Binance needs to get out of the "listing fee" public opinion vortex through the listing itself.
Nevertheless, it is still difficult for the market to fully believe the CEXes' claim of no listing fees. Even if there is no "open and aboveboard" charging, rumors about hidden token fees are still rampant. Some top CEXes may clearly list no listing fees in their announcements, but project parties still need to pay corresponding deposits to ensure the stability of the token price, and CEXes' investment shares and activity budgets, etc. need to be agreed upon during the listing. These hard-to-refute hidden listing fees have also become the reason for the market to determine the "black box" operation of CEX listings.
On the one hand, this cumbersome and opaque listing mechanism is an additional burden for project parties. Project parties need to spend extra costs to deal with CEX listing affairs, which will lead to the problem of adverse selection. Project parties are not focused on long-term development, but instead will have the expectation of "listing is a blessing", ultimately leading to most of the listed projects rushing to cash out.
On the other hand, the unfair CEX listing has even evolved into a niche track. Researching listings has become a legitimate "business", and listing studies have become a must-take course for many investors and KOLs. For example, the recent Formula News made a profit of $3 million by trading the news of ACT's listing.
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 CEXes (listing fees) and scientists (front-running after listing). Project parties have to bear a considerable listing fee, which will sacrifice the quality of the project, and ultimately it is the retail investors who foot 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 price 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 DEXes.
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 seems to have a "VC conspiracy" vibe, Hyperliquid did not take the old path of first VC financing, then volume-boosting and listing for cash-out. 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 specifically list projects?
Dutch Auction
Hyperliquid uses a Dutch auction to auction the token ticker, and its listing process is also relatively public and transparent, with detailed introductions 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 person accepts the price. From the perspective of game theory, the Dutch auction reflects the true psychological expectation of the bidders, and can realize the auction at a fair price.
When a project deploys tokens on Hyperliquid, it needs 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 limit" approach also indirectly improves the quality of the listed projects.
In summary, compared to the opaque black box operations that confuse the public in CEXes, 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 "ZK" gold 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 similar "fighting" behaviors will occur. Project parties will fight hard to grab the token ticker that best 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 in the near future.
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 $35,000 hard ceiling. However, after the TGE, Hyperliquid 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 historical high of $180,000 in the FARM auction.
The previous record-breaking $128,000 ticker battle came from "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 mainly memes, such as PIP and CATBALL.
After this airdrop, the heat of Hyperliquid has also started to soar. The record-breaking auction of SOLV is a turning point for Hyperliquid to move from the meme paradise to the regular army onboard, and Solv Protocol will also be the top 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.
On the one hand, before the price ceiling was broken by the Solv-led ticker auction market, 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 trading at over $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, The Farm is building the world's first GenAI artificial intelligence 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 over $30 million within a few hours of opening, approaching $50 million, and also opened up the imagination space of the Hyperliquid ecosystem.
On the other hand, according to AXSN's data, the daily trading volume of the HYPE token has already monopolized the daily trading volume on Hyperliquid, 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 launch of Solv Protocol, more project parties will choose to debut on Hyperliquid, and the trading volume will be more dispersed in the future.
What has Hyperliquid changed?
As Hyperlqiuid founder Jeff said, "ownership goes to the believers and doers, not rent-seeking insiders". The development of Hyperliquid also conforms to this.
Mutual Pursuit with Project Parties
For VC coins, listing on Hyperliquid is also a mutually reinforcing and symbiotic market behavior. The auction listing itself is also a form of advertising. Without having to pay additional advertising fees, Solv became the traffic center of market discussion by winning the Hyperliquid auction ticker.
For many copycat projects, even if some projects have been listed on major exchanges, it is still difficult to maintain a good "K-line" if they cannot be listed on first-tier CEXs during the bull market. Without liquidity, there is no traffic, and even less of a follow-up story, and most obscure tokens listed on exchanges become "high heels" or "Christmas trees".
Hyperliquid provides a more economical solution, which can meet the temporary demand for those unable to debut on major exchanges, and also allow them to "grab a seat" by listing on a good trading platform at low cost. After subsequent access to HyperEVM, tokens purchased from Hyperliquid can be used in other EVMs, further highlighting its relative advantages in terms of cost-effectiveness of listing. Although currently Hyperliquid does not have the same strong listing effect as CEXs, 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 the historical process and the 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.
After the FTX collapse, founder Jeff no longer trusts CEXs and does not accept any VC investment. In Jeff's eyes, most projects will first obtain the endorsement of top-tier institutions, and then through various so-called point plans to dress up the data, 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, pull in investments, and list on major exchanges. Ultimately, it is the retail investors who bear all the consequences, leading to a mess, and this kind of short-sighted and opportunistic 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 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 bullets shot out years ago are now hitting the bull's-eye.
The history of Crypto's development is also 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.
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