Dear Hyperliquid holders, this is one to read all the way through, because I genuinely care about your success as a crypto investor. I want you to be wealthy and have an abundant life like I do. I've been in crypto at least 11 years, having bought my first Bitcoin in 2014, and I've researched thousands and thousands of altcoins. I'm a full-time YouTuber and Twitch streamer, and one of my viewers, Kung Fu Classics, asked me whether I'd reviewed Hyperliquid. I didn't have a Hyperliquid video up yet, so I took a look at it, and I have some serious concerns that are very obvious to me.
Before I go further: this is not financial advice. I'm not a financial advisor, and I'm not telling you to do anything. This is simply my research, presented for your benefit because I care about you. I also need to be upfront about my own bias. I hold at least 10,000 ICP, which is fifty-plus thousand dollars worth of Internet Computer Protocol at today's prices, and that is clearly going to color what I have to say. With that out of the way, let's dive into the things I see that, as a holder, I believe you should be aware of.
I want to be clear that I'm very aware of all the criticisms of Internet Computer Protocol too, every potential problem. I've even brought new concerns to the ICP community myself, and I made a video addressed to the founder to talk about some of the things that worry me. So I know the downsides of ICP intimately. Everything could go wrong; not everything is working perfectly. That's exactly the point: with every crypto you're holding, I think you should know the criticisms as well as the hype. If you only know one side, you can't get a real picture of what you actually own.
A brand-new project already worth billions
The first huge problem I see with Hyperliquid is that it's a new project, and it's a new project that's already worth billions of dollars. From what I've seen in 11 years in crypto, that is a nearly guaranteed formula to lose money. Again, not financial advice; anything can happen, and we're creating this reality together in real time. But brand-new projects are often unproven.
Look at Mantra. I called that one back when I was doing my "going to zero" videos. I try to make these more respectful now, but at the time I said Mantra was going to zero, and it went to zero within two months of my video about it. It was a multi-billion dollar market cap project, and it dropped something like 90% in a very short amount of time. I have the same concern for Hyperliquid, because right now it's around a $6 billion market cap, and that's just what's actually trading. There's $17 billion total fully diluted, which means massive token unlocks and massive dumpage ahead. In my experience, that's an absolute recipe for disaster. Will it play out that way? I don't know. But I certainly wouldn't want to invest in something like that.
That's a big part of why I'm in Internet Computer Protocol. ICP's fully diluted market cap is something like six or seven times smaller, the technology is, in my opinion, the best in crypto, and we've already been through almost all of the token unlocks and dumpage that started four years ago when it launched. What I've learned from being in Internet Computer is that you do not want to get into something until the token dumpage has already happened, and at that point you do want to verify that the team is actually still working on it.
Where are the people?
When I go look at the Hyper Foundation website, here's what concerns me. I'm not going to walk you through it screen by screen, because you should be doing your own research rather than just taking my word for anything. You should be looking all of this up yourself. That's exactly how I came to believe Internet Computer Protocol is the best tech in crypto. I found that a lot of YouTubers, including ones I trusted and had watched for a long time, were giving inaccurate information about it. When I double-checked what they said, I found they were wrong. So you should always double-check everyone you watch when it comes to crypto, and you do that by looking at the websites themselves. I'm giving you advice on how to do your own research.
So when I look at the Hyper Foundation website, what I don't see is a team of people working on this. Many of you investing in crypto don't expect to see a team, but ultimately, when you invest in crypto, the bottom line is that you are investing in something that real people are building. Think about companies: the real value of investing in a company is the people who know how to use the technology, the CEO who knows how to run things, and all the workers who know how to build with it. For me, trust gets built when I see people's faces, their names, their X profiles, their LinkedIn profiles, even though I don't personally use LinkedIn. When I see YouTube videos of people talking about and actually using the technology, that builds trust.
I don't see that on Hyperliquid. On hyperfoundation.org, at least, I don't see any of that. I don't see a YouTube channel. I don't see a single person's name on the website. To me, that is not trustworthy. And I'm saying this to the team as well: if you can add these things, please do. Some teams have made changes after I've raised these points. This is constructive feedback. I would love to see the team put their faces, their names, and their profiles out there, and bring as many of you as possible into the open, because that would tell me they believe in their product, they're using it, and they're developing it.
The reason people don't want to put their names on products is that when those products go to zero, they don't want you to sue them, be upset with them, track them down, or send them nasty messages, which you should not do. Lawsuits are a whole other area I know nothing about, but you don't gain anything from harassing people. Still, that's why people keep themselves secret. I don't operate like that. I put my name and my face out because I believe in what I'm saying, and I'm out here making six YouTube videos a day because I believe in what I'm saying and I care about you as my viewer first and foremost. When I look at Hyperliquid, I'm not seeing that same kind of energy. I'm seeing them try to convince you through numbers and stats, and what I'm not seeing is clear proof that this is special.
Claims that don't match what I know
What they say on their website does not match what I know from things like Internet Computer Protocol. If you scroll to the top, it says, "for the first time, build projects, create value, and exchange assets on the same hyper-performance chain." To me, that's inaccurate. Internet Computer has been doing exactly that for four years; it came out in May, so just under four years now. ICP has been giving you a place to build projects, create value, and exchange assets all on the same chain for years.
The site also says it's "the blockchain to house all finance," and that second sentence seems blatantly inaccurate to me, because Internet Computer Protocol is the only technology on earth where you can build the website, the coins, a truly decentralized exchange, tokens, and DAOs all on-chain, directly accessible through a browser, eliminating the need for middlemen. Hyperliquid is making that same kind of claim on its front page as if it's new. It's not new; it's been done for years. So either they don't know about Internet Computer Protocol, in which case I don't have much trust in a project that isn't aware of it, or they do know about it and they're betting that you don't.
Then it says the flagship application is "the premier decentralized exchange." From what I can see, I don't believe it's actually decentralized, because the website itself isn't on-chain. If you're interacting with a website that is not on-chain, that's not decentralized; it's moderating, sitting between you and the blockchain. In that case there can't be any real decentralization in the user interface, and the user interface is, I'd argue, the most important part of the whole equation. The Hyperliquid tech stack, from what I can see, doesn't impress me, especially compared to ICP.
What the research turns up
I use Grok to research cryptos. If you want to look up the criticisms of any coin you're holding, just go to Grok and ask it for the criticisms; it does a good job laying them out. On some coins it has limited data, but Grok absolutely tore into Hyperliquid on a level I haven't seen before. Maybe I should run ICP through it too. Grok tears Hyperliquid apart from just about every angle.
Grok flags centralization concerns. It says there's a very limited validator set, only 16 validators, and that the Hyperliquid team holds a super-majority of the stake, so they could basically do anything to the chain. That would be logical for a project this early, but combined with what I said about the website, it's a real concern. To be clear, this next part is what Grok gave me as part of its research, on top of my own observations: Grok says the code is closed source, that there's a centralized API and poor documentation, that the validator rewards are insufficient to cover bonding requirements, and that there's a super-majority controlled by the foundation. That doesn't seem very decentralized, does it?
There are also posts indicating that whistleblowers are saying Hyperliquid engages in pay-to-play practices, favoring well-connected insiders who can corner the supply of HYPE tokens used to validate transactions. That reportedly lets wealthy investors gain disproportionate influence over the network, and the token supply appears to be very centralized, which again makes sense for an early project but isn't reassuring.
Then there's a whole big section on security and vulnerability risks. The most obvious one is a lack of battle testing, and that's exactly why I don't invest in new projects: the project simply hasn't been battle tested. Hyperliquid hasn't proven its resilience, at least from what we can see, against huge market crashes, cyberattacks, or exploits that could take it to zero. We saw how easily that happened with Mantra. Grok also talks about past exploits, people pointing out validator software risk, potential North Korean hacker concerns, and insufficient developer activity.
Getting developers to build is very difficult, especially once developers find Internet Computer Protocol, which I believe is the best technology anywhere to build with in crypto. ICP is onboarding more new developers per market cap than anything else from what I can see. I didn't even find Hyperliquid listed in Electric Capital's developer report, because it wasn't around for all of 2024, and I don't see any evidence of fantastic developer activity happening here, according to Grok or otherwise.
People are saying that the underlying activity is insufficient to justify its market capitalization, especially when there's an apparent scarcity of developers and the project is closed source, so there's only so much you can even do with it anyway. According to Grok, which you can ask yourself, the hype was distributed in a massive airdrop in November 2024, and the promises of governance and rewards have not been fulfilled. That could set up a prisoner's dilemma where the wealthy holders dump and take it to zero, which is exactly what appears to have happened with Mantra, a project that had a lot in common with Hyperliquid. From what I can tell, this airdrop was a big key to its growth, and it looks like the price action is mostly speculation rather than organic adoption. That's true of almost everything in crypto.
I want to be upfront about my approach here. I'm not screenshotting and showing all of this material anymore. If you want to read it for yourself, I'd encourage you to ask Grok directly after you finish this post. I'm sharing what I found, but you should verify all of it on your own.
The Fees, the Tech, and Why I Keep Comparing It to ICP
Grok also points to the fully diluted valuation problem, and it notes there are relatively high trading fees on Hyperliquid. In my experience, that's not good. For comparison, you can swap with hardly any fees, instantaneously and fully on chain, on ICP. All of that technology was set up years ago, and it's working better than ever today. When I look at the two side by side, the contrast in fees and on-chain capability is one of the things that stands out most to me.
Regulatory Exposure and KYC
There are more problems beyond the fees. Right now, Hyperliquid has a lack of KYC, which is great for certain people who'd like to avoid it. But that's the kind of thing that's likely to get attacked. Hyperliquid has set itself up as a big target with this billion-plus-dollar market cap, the sort of target that draws attention from OFAC, the Office of Foreign Assets Control in the US, and from the Securities and Exchange Commission. From what I see, this is something that could easily come under attack, or it could start requiring KYC and then go to zero from there.
User Retention and Team Conduct
Then there are the user retention challenges. The data suggests that only a minority of users, somewhere around 20% of the top users, actually remain active after six months. This is a broader issue across the whole crypto space, but that's why you have to ask yourself why this project is going to be any different than the rest.
There continue to be more and more concerns the deeper I look. Grok says there has been unprofessional conduct from the team, and to me that's a bad sign. When someone posts a video or an analysis like this, and the response is unprofessional, with name calling and labeling people in the most severe terms, that's a problem. We'll see whether the team responds to this. To be fair, the team has responded to some of these criticisms, saying that no single entity can dominate decision making and that they'll make the code public.
Where I Land as an Investor
Based on everything I've seen here, there's no way I would want to buy this or hold it as an investor. I want to be clear that this isn't financial advice. This is simply the research I've done, because so many of you asked me to look into it, and this is what I've come to believe based on what I found. You can look all of it up yourself, and I'd encourage you to do exactly that before making any decision.
I appreciate you reading this all the way through. I filmed this live, and I genuinely care about you as a crypto investor, which is why I try to keep a more respectful tone in everything I share. I cover all kinds of subjects, from gaming to music to crypto reviews to meditations, and if this kind of breakdown is helpful to you, you can find much more of it in my Money playlist. My hope is always that this work entertains you and makes your life a little better.