Hyperliquid founder Jeff Yan has publicly addressed criticism and FUD (fear, uncertainty, doubt) suggesting the decentralized exchange prioritizes protocol revenue over trader interests. Yan defended the platform's auto-deleveraging (ADL) system, particularly during the October 10, 2025 market crash, where ADL actions saved traders hundreds of millions of dollars by closing profitable short positions at favorable prices.
Yan stated that if more positions had been backstop liquidated, Hyperliquid's liquidity pool (HLP) could have earned hundreds of millions more in profit but would have faced irresponsible risk exposure. Instead, the platform passed on potential profits to users, calling the ADL approach a "win-win" that decreased platform risk. He emphasized that the ADL queue follows a formula similar to centralized exchanges, prioritizing simplicity and user understanding over complex mechanisms.
Contrasting DeFi on-chain transparency with centralized exchange (CEX) practices, Yan cited Binance documentation as an example of underreporting liquidations, where only one order is reported even when thousands occur in the same second. He expressed hope for industry-wide adoption of verifiable on-chain operations.
Amid growing competition, Yan noted that Hyperliquid's ecosystem continues to expand, with its native stablecoin USDH launching in late September and processing nearly $2 million in trades initially. The platform also cut spot fees by 80% to attract liquidity, and its token HYPE is supported by initiatives like reserve income for buybacks. Cathie Wood of ARK Invest compared Hyperliquid's trajectory to Solana's early rise, highlighting its potential in decentralized derivatives.
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