My first thought, 'HL vs TradeXYZ reminds me of @RaydiumProtocol vs @pumpdotfun' Lets recap... 👇 In 2024, PumpFun became Solana's top memecoin launchpad: • 2M+ tokens created • 13M users • $600M+ revenue generated Raydium benefited from being PumpFun's partner: • 41% of Raydium's fees via PumpFun • $80M in fees via PumpFun traders This partnership worked and both sides won. 👇 PumpFun owned the user funnel: → creators launching tokens → retail trading memecoins Raydium owned PumpFun's trading layer: → AMM liquidity → swaps → trading fees But PumpFun had the upper hand... they captured Raydium's market by launching their own AMM: 1 PumpFUN launched PumpSwap 2 Raydium launched LaunchLab (a memecoin launchpad, a 'F**ck you' to PumpSwap) Fast forward: PumpSwap became the dominant DEX for PumpFun trades with ~$300,000 in daily revenue, while LaunchLab struggled to gain PMF (>$1000 in daily rev). Now compare this to @HyperliquidX vs @TradeXYZ... 👇 Hyperliquid today: • HIP-3 grew from 2% > 50% of perp volume • HIP-3 generated $440B+ cumulative volume • RWA perps is the fastest growth category for Hyperliquid (more than HyperEVM) TradeXYZ is the main attributor to HL's RWA growth: • 92.7% of all-time RWA volume attributed to TradeXYZ (vs other deployers HyENA/ Kinetiq/Felix/DreamCash/ Ventuals...) • 99.7% OI vs other deployers • splits fees 50-50 with HL 'look at the Hip3 metrics, isn't HL dependent on XYZ, and what if XYZ left HL to start their own DEX?' My take: TradeXYZ vs. HL is not the next PumpFun vs. Raydium story. PumpSwap was able to render Raydium obsolete, since launching an average AMM is relatively easy. ... But for TradeXYZ to build a perp DEX rivaling HL requires: → Billions in volume → MM's → deep liquidity → execution quality → decentralization → EVM ? it's a lot harder to pull off than building an average AMM and in my opinion, XYZ faces a bigger risk by directly competing with HL, as Ethos-aligned deployers running point programs could come back, and HL would incentivize new teams to finally capture TradeXYZ’s market share. If I were CEO of XYZ, I’d be content with $62M in annual fees from a symbiotic partnership and not risk it all
As a HYPE bull during the Cambrian explosion of RWA perps, you should ask yourself the following questions: 1) if TradeXYZ left Hyperliquid tomorrow and launched their own exchange, where would you go to trade RWA perps? 2) if TradeXYZ launched a stock/token, how would you value HYPE differently? 3) what is the likelihood of #1 and #2? I don’t intend to be a bear, but I’m pretty confident in my answers to #1 and #2 and I’m not naive enough to say I (or seemingly any major allocator) knows the answer to #3. And before the .hl’s whine in my comments, this is not meant to slight either protocol, it’s to state a fact: TradeXYZ holds a large and growing amount of leverage over Hyperliquid.
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