Hyperliquid Founder Takes Stand Against Market Makers to Ensure DEX Neutrality

The ongoing competition among decentralized exchanges (DEXs) shows no signs of slowing down.

Key Takeaways

Hyperliquid's founder, Jeff Yan, affirmed the platform's commitment to being a credibly neutral DEX by blocking market maker partnerships.
Recent controversies around the Lighter DEX have raised questions about transparency and fairness in airdrops and market-making arrangements.
Hyperliquid's market share has fallen to below 19% from a peak of 75%, facing competition from platforms like Lighter.
HYPE token has shown slight price gains but remains within a narrow range, with potential for recovery if market conditions improve.

Hyperliquid founder blocks market makers to keep the DEX ‘credibly neutral’

Recently, amid controversy surrounding the Lighter DEX and its alleged ties to controversial market makers like Jump Trading and Hayden Davis, who has been linked to the Libra memecoin turmoil, Hyperliquid has made a decisive move.

In a statement, Hyperliquid founder Jeff Yan emphasized the platform as a more trustworthy and “credibly neutral” alternative, asserting that, “Integrity has always been a core value for Hyperliquid. The foundation of all finance must be credibly neutral, meaning no private investors, no market maker agreements, and no protocol fees to any company.”

Hyperliquid HYPE Source: X

He also addressed critics of Hyperliquid's firm policies, stating, “This principle of fairness frustrates some users and developers accustomed to preferential treatment.”

Understanding the Lighter DEX Controversy

The most recent controversy surrounding Lighter DEX surfaced when an analyst revealed that five undisclosed wallets received a total of $26 million worth of Lighter [LIT] tokens for providing just $5 million in liquidity. The report indicated that Jump Trading was one of the recipients of an LIT airdrop linked to a market-making deal.

Also notable was Kelsier Labs, led by Hayden Davis, which received $11.52 million in LIT. Furthermore, Tron founder Justin Sun was recognized for being an early liquidity supporter. However, many of these details were not communicated to the community in a timely manner, according to on-chain researchers.

Following these disclosures, Web3 researcher ZachXBT criticized Lighter provocatively, suggesting that “crime pays.” Meanwhile, one community user condemned the lack of transparency in the airdrop, saying, “This is quite bad and very blatant. Who knows how many more dubious airdrop addresses there are?”

In light of the backlash, the Lighter team released a statement indicating that they had previously established arrangements with liquidity providers and market makers. Despite this, skepticism lingered, with one user sarcastically remarking, “It’s amusing that Vlad (the Lighter founder) seems to believe it’s standard to create side agreements and use Lighter airdrop allocations as a bargaining tool with third parties, outside of the public points program.”

Lighter Source: X

Hyperliquid’s Market Share Decline

In the midst of these developments, Hyperliquid's market share has decreased to below 19% as competing platforms like Lighter are gaining traction.

Hyperliquid previously reached a peak market share of 75% in May, but has faced a decline in recent months, now stabilizing between 19% and 20%.

Hyperliquid Source: Dune

As for HYPE's pricing, it saw a slight increase of about 2% and was valued at $24.8 at the time of this report, but remains within a short-term price range of $23 to $26. Overcoming resistance levels at $26 and $27 could support further recovery if general market sentiment improves.

HYPE Source: HYPE/USDT, TradingView

Final Thoughts

This ongoing scenario highlights the importance of transparency and trust in the rapidly evolving DEX space, and how different platforms are positioning themselves in response to market pressures.