“To the Elysian plain… where life is easiest for men. No snow is there, nor heavy storm, nor ever rain..”
— Homer, Odyssey
Outline
- Introducing Elysium
- HYPE as Gas
- Supercharging Hyperliquid Spot Trading
- A Call to PropAMM’s
- The First, And Only Value Accretive L2 in History
- Redefining Precompiles: Hyperliquid As The Native Oracle
- ██████ Transactions
- Native Token Generation Platform for Hyperliquid
- Elysium’s Sequencer, Builders, KNTQ
- Ok, But Wen
Introducing Elysium
Kinetiq is ushering in a new era for Hyperliquid, with Elysium.
It has become common knowledge that HyperEVM is less than ideal for:
- Traders
- Builders
Kinetiq has dominated the vast majority of economic activity on HyperEVM and currently makes up not only the majority of network TVL, but the majority of subsequent protocol TVL further down the application stack; from money markets to options protocols.
When we came across Hyperliquid in May of 2023, building a specialized app chain was already uncommon, let alone for perps, and it’s clear that Hyperliquid has met that demand and beyond. In April of 2024, when HyperEVM was announced, this is what excited us about building on Hyperliquid and creating not only a mere application, but the cornerstone of Hyperliquid DeFi, and looking back, we've succeeded in doing that.
But along the way, it has become painfully obvious that the network has been unable to sustain the demand that the users it was built to serve arrived with. HyperEVM, in effort to compose with HyperCore, has introduced complexities that perplex even the most talented builders and sophisticated traders; such as a dual-block architecture, and minimal performance and throughput, leaving much to be desired.
Kinetiq was built by hand for the ecosystem, with no bias or preferential support by Hyperliquid Labs or the Hyper Foundation, no kingmaking, or preferential treatment of any kind. We arrived as, and still are humble, eager builders, and have served the needs of every ecosystem participant, from retail to institution.
We believe there is much, much more to be done here.
HYPE as Gas
Elysium is making HYPE the gas token for the network, further ensuring seamless composability with HyperEVM and HyperCore, with zero net-new asset friction.
Supercharging Hyperliquid Spot Trading
HFT optimizations such as heavily increased performance and throughput, and eventual HyperCore block time parity allow for a whole new era of spot trading to occur on Hyperliquid.
Elysium is designed with HyperCore connectivity as its foundational offering, as the network is effectively co-located with the Hyperliquid blockchain. Builders and traders can expect Day 1 production block times to be orders of magnitude more performant than HyperEVM, enabling a whole new suite of applications not possible anywhere else onchain.
Hyperliquid remains underutilized for spot trading. Bootstrapping an orderbook is exceptionally difficult, but the Hyperliquid traders are asking for highly liquid, easily tradable markets that are competitive to Hyperliquid’s both centralized and decentralized counterparts. The data below corroborates our thesis:
Hyperliquid’s weekly share of spot volumes against Binance has sits at a 15-month low, and among the lowest weeks on record, since the launch of spot majors in late 2024. Source: https://dune.com/uwusanauwu/perps
Hyperliquid is currently printing its 2nd lowest month of spot volumes since launch. Source: https://hyperscreener.asxn.xyz/spot-markets/overview?chart=spot-markets-table
Hyperliquid’s native orderbook bootstrapping mechanism, HIP-2, is at its lowest point since Q4 2024. Source: https://hyperscreener.asxn.xyz/spot-markets/overview?chart=spot-markets-table
It is time that the spot offering on Hyperliquid becomes compelling enough to properly challenge centralized venues, and eat into other decentralized venues for onchain price discovery on long tail (and eventually short tail) assets.
A Call to PropAMM’s
Solana, where PropAMM’s dominate irrespective of risk on/off, constantly sees spot volumes in excess of at least 30x larger than HyperCore (long tail + majors on PropAMM’s), and Robinhood Chain at ~10x larger than HyperCore already.
Elysium’s design makes PropAMM’s even more interesting to deploy, and allow for a completely unique hedging environment given the proximity to HyperCore. Our customization of the L1Read precompile essentially provides a free oracle for PropAMM’s to tap with top-of-block freshness and quote tighter than ever before.
The First, And Only Value Accretive L2 in History
L2’s have quickly diminished in the value that they offer the net new marginal trader/developer. After their introduction nearly 5+ years ago, it is hard to argue that any other pivotal moments in the sector exist. L2’s quickly gained a notorious reputation for damaging the soundness of Ethereum, and generally any L1 they were built on top of because they inherently erode the monetary properties of the network, since activity has generally moved in the direction of much faster, much cheaper chains – this has become table stakes.
On Hyperliquid, this is completely different.
The overwhelming majority of Hyperliquid’s value is driven by what generates the network ~$1m-$6m in daily revenue, which is the perps exchange, via HyperCore. On a normal day, HyperEVM usually only contributes about ~$1m annually to the network value, and if you ask any token holder on the spectrum of sophistication from retail to institutional, no one prices the HYPE token anywhere near the current valuation based on HyperEVM activity. The integration is additive to a very little extent, crowned by Circle issuing USDC natively on HyperEVM – and even then, the value attributed to this is not even a fraction of Hyperliquid’s current valuation.
The extent of transaction activity on HyperEVM even with the current interest at only a few thousand daily users, has pushed the network to its limits, seeing transaction costs for a simple swap cost as much as $20 - this is completely unsustainable, as new entrants have learned every time they've come to HyperEVM.
Therefore, we can safely say that the general purpose environment on Hyperliquid is ripe for disruption, and Kinetiq is poised to usher in this new era with Elysium.
Elysium’s success is Hyperliquid’s success.
Redefining Precompiles: Hyperliquid As The Native Oracle
Elysium leverages and adapts the L1Read precompile to provide the native oracle for the entire ecosystem in an extremely performant environment, meaning that Hyperliquid pricing and liquidity can be utilized by builders and traders on Elysium to build apps / execute trades with this data.
Further, the current implementation of the L1Read precompile currently only shows BBO (Best Bid and Offer) on HyperEVM, Elysium customizes L1Read to display even further vital information for traders and builders. This alone creates a multitude of new use cases for applications, never before possible onchain.
█████ Transactions
Elysium will feature ████ transactions, further enhancing UX, liquidity, and growth for Hyperliquid as a both an exchange and a general purpose DeFi ecosystem.
Native Token Generation Platform for Hyperliquid
Elysium creates a one-of-a-kind environment not only for builders, but for new tokens as well.
The Hyperliquid ecosystem has gained infamy for being notoriously difficult to launch tokens on, whether on HyperCore or on HyperEVM. Elysium changes this entirely. Elysium supports the full lifecycle of tokens given its:
- Co-location with HyperCore
- High performance EVM environment
- Access to HIP-3 permissionless perpetual deployments
A token can be generated and bootstrapped on a long tail AMM on Elysium -> become deeply integrated on Elysium PropAMM’s -> have the optionality to bootstrap a HyperCore spot orderbook -> secure a perpetual listing via HIP-3 - all within a single ecosystem.
This is an Elysium-specific offering, this composability does not, and will not exist anywhere else.
Elysium’s Sequencer, Builders, KNTQ
Elysium introduces a new model that aligns every single participant in its ecosystem. Sequencer fees will be allocated accordingly:
- 25%: Builders
Directed to applications that consume the Elysium blockspace, which can be used as part of user incentive programs, rebates, and more.
- 25%: Treasury
Directed to the Kinetiq treasury for operations.
- 50%: KNTQ
Directed to programmatic purchases of KNTQ on the open market. 100% of the purchased KNTQ will be burned, by being sent to the Hyperliquid Assistance Fund.
This model assures that builders are incentivized to come build atop of Elysium, users/traders are incentivized to take part in the growth of applications, and KNTQ token holders remain the sole beneficiary of economic activity on the Elysium network.
Ok, But Wen
Elysium’s launch is imminent, and tech specs will be shared soon for both builders and traders to digest. At launch, Elysium will boast throughput and performance that is orders of magnitude greater than HyperEVM.
Critical partners that are foundational to Elysium will be announced in further communications, stay tuned.
See you there.
