This clip dives into HyperCore's expansion strategy, focusing on innovative user acquisition channels and the pivotal role of its builder code ecosystem in its ambition to become a dominant, foundational liquidity layer.
Onboarding the Solana Wave to HyperCore
- "Axiom does both Solana and HyperCore. And I feel like that's actually quite a good way to get this new user base of people who are primarily in the Solana trenches to get into perps because it's relatively seamless."
- "If you guys ever go on Twitter and you see these people who are in the Solana Trenches... It's like 19-year-olds with .5 SOL and a dream. It's legitimately dumb flow."
- Axiom acts as a key gateway, funneling Solana's vibrant, if sometimes speculative, "dumb flow"—characterized by young traders with small capital—towards HyperCore's perpetuals market.
- While Axiom currently derives the lion's share of its revenue (~95%) from Solana, its HyperCore integration (contributing sub 5% of revenue, potentially as low as 50 basis points via builder codes) represents a nascent but high-potential growth avenue for HyperCore.
- Tapping into this highly active Solana retail base, even if comprised of smaller individual accounts, is a strategic maneuver for broadening HyperCore's user demographic and trading volume.
Builder Codes: The Shopify for Liquidity
- "With the builder code mechanism...we're basically getting to a point where you can have unlimited organizations putting the work in for user acquisition and user retention."
- "My hope is that within a year's time, the builder code ecosystem looks like a proto Shopify...spin up a billboard, attract 10,000 users, and cover their rent that way."
- HyperCore’s ingenious builder codes empower any entity to construct front-ends or integrate its liquidity, earning fees for onboarding users and effectively decentralizing the often costly efforts of growth and retention.
- The grand vision is an expansive "proto Shopify" model, where a diverse ecosystem of integrators, from solo entrepreneurs to established platforms, organically drives user acquisition for HyperCore.
- Pioneering examples like Axiom and PVP Trade are already demonstrating this model's efficacy, with a pipeline of new integrations leveraging builder codes expected to hit the market in the coming months.
HyperCore: The Unseen Liquidity Engine
- "Continued growth is coming from entities like Axiom that integrate HyperCore as a liquidity backend."
- "The true bull case for HyperCore is that it just becomes this liquidity layer for so much and in so many different niches."
- HyperCore's core strategy isn't about being just another exchange; it’s about positioning itself as a fundamental, behind-the-scenes liquidity layer that powers a multitude of applications.
- The platform’s trajectory favors growth through external platforms like Axiom embedding HyperCore, rather than direct, head-to-head competition with existing standalone exchanges.
- The ultimate bull case rests on HyperCore becoming an indispensable and ubiquitous source of liquidity across a wide array of crypto niches and use cases.
Enticing Centralized Exchanges with Efficiency
- "I'm personally interested to see at which point longtail centralized exchanges even just kind of throw in the towel...delegating our backend basically to HyperCore...that can be pure profit and cut out you know 50, 60, 70% of the cost structure."
- HyperCore dangles a compelling carrot for centralized exchanges (CEXs): the opportunity to radically streamline operations by outsourcing their backend infrastructure.
- By integrating HyperCore, CEXs could potentially slash their operational cost structures by a staggering 50-70%, all while maintaining their existing user-facing fee models, effectively transforming operational overhead into "pure profit."
- The forecast is that the sheer economic logic will eventually persuade smaller, "longtail" CEXs to adopt HyperCore, expanding its reach beyond Telegram bots to more established trading venues.
Key Takeaways:
- HyperCore is strategically cultivating growth by empowering an ecosystem through its builder codes, aiming to become an essential liquidity utility rather than just another direct-to-consumer exchange. The platform's ultimate success hinges on its ability to attract a diverse range of integrators who will, in turn, onboard varied user segments—from the retail hordes on Solana to, potentially, established centralized exchanges.
- Builder Codes are HyperCore's Flywheel: Anticipate a burgeoning ecosystem of third-party applications and front-ends driving user acquisition, creating a "Shopify for liquidity" effect.
- Solana's Retail Floodgates Opening: Axiom is the tip of the spear for onboarding a significant, new, and highly active (if unsophisticated "dumb flow") user segment from Solana into the HyperCore ecosystem.
- CEXs Eyeing HyperCore Backend: The potent cost-saving proposition could catalyze a trend where centralized exchanges opt to delegate their backend operations to HyperCore, fundamentally reshaping their P&Ls.
For further insights and detailed discussions, watch the full podcast: Link
This episode explores Hyperliquid's strategic expansion, focusing on its potential to become a foundational liquidity layer by onboarding new user segments and empowering third-party builders.
Onboarding New User Demographics via Integrations
- The discussion highlights Axiom's role in bridging Solana users to Hyperliquid, tapping into a fresh, albeit less sophisticated, investor base.
- Axiom, a platform supporting both Solana and Hyperliquid, is presented as a key gateway for onboarding users primarily active within the Solana ecosystem. These users are characterized as a younger demographic, often with small capital, representing what the speaker terms "dumb flow."
- The speaker notes a significant revenue disparity for Axiom: "Axium makes I think like 95% of its money off of Solana and like sub 5% from Hyper[liquid]." This was further refined, suggesting that an even smaller fraction, perhaps "only 50 bits" (basis points), of Axiom's revenue from Hyperliquid might stem from builder codes due to fee caps.
- This strategy of integrating with platforms like Axiom is seen as a crucial growth avenue for Hyperliquid, expanding its reach beyond typical crypto trading circles.
- For Crypto AI investors, this signals the importance of user acquisition funnels that tap into diverse, and sometimes unconventional, market segments. AI-driven analytics could potentially identify and target such emerging user bases more effectively.
Hyperliquid as a Backend Liquidity Layer: The Power of Builder Codes
- The conversation shifts to Hyperliquid's core value proposition: evolving into a decentralized liquidity backend, primarily through its innovative builder code mechanism.
- The speaker emphasizes that Hyperliquid's continued growth is increasingly reliant on entities like Axiom that integrate it as a liquidity backend—a foundational service providing trading liquidity that other applications can plug into.
- A key innovation discussed is the builder code mechanism. This system allows third-party developers or entities to submit transactions on behalf of users and earn a portion of the trading fees, up to a certain threshold, which differs for spot and perpetuals trading.
- The speaker articulates a vision where this ecosystem flourishes: "My hope is that within a year's time, right, like the builder code ecosystem looks like a proto Shopify... where two beady schmucks from some far-flung part of the world... could... spin up a billboard, attract 10,000 users and... cover their rent that way."
- This model allows for permissionless innovation in user acquisition and interface development, positioning Hyperliquid not just as an exchange alternative but as a fundamental liquidity layer for numerous niche applications.
- Crypto AI researchers might explore how AI agents could leverage builder codes to create automated, optimized trading front-ends or arbitrage bots, contributing to this ecosystem.
Strategic Implications: Disrupting Centralized Exchanges and Future Growth
- The discussion projects a future where Hyperliquid's model could significantly disrupt traditional centralized exchanges (CEXs) and foster a broad ecosystem of integrated services.
- The success of platforms like Axiom and PVP trade using builder codes is seen as a proof-of-concept, with expectations of more entities adopting this model in the coming months.
- A compelling strategic implication is the potential for "longtail centralized exchanges" to eventually integrate Hyperliquid as their backend. This would allow them to "cut out you know 50 60 70% of the cost structure" by offloading backend operations while retaining user-facing fee structures, thereby achieving "pure profit."
- The speaker believes the economic rationale for such a move by CEXs will become undeniable at a certain point, expanding the use of builder codes beyond Telegram bots to established exchanges.
- For investors, this points to a potential shift in the CEX landscape, where value might accrue to foundational liquidity layers like Hyperliquid rather than solely to user-facing exchange brands. AI-driven risk management and liquidity provisioning tools could become crucial for entities building on such layers.
This episode underscores Hyperliquid's strategy to become an indispensable liquidity infrastructure through open integration and incentivized third-party development. Crypto AI investors and researchers should monitor the growth of such decentralized liquidity layers and builder ecosystems, as they may offer new avenues for AI-driven financial applications and novel investment theses.
