Author: A Ray's New World

Recently, the listing mechanism publicly announced by Hyperliquid has sparked heated discussions. However, the reason this matter has attracted market attention is closely related to a tweet posted by Moonrock Capital CEO Simon on November 1st this year. He claimed that "Binance requires a certain potential project to provide 15% of its total token supply to ensure its listing on CEX, which accounts for 15% of the total token supply, valued at approximately 50 million to 100 million dollars."

At the same time, Andre Cronje, co-founder of Sonic Labs, also stated, "Binance does not charge listing fees, but Coinbase has repeatedly requested fees, quoting 300 million dollars, 50 million dollars, 30 million dollars, with the most recent quote being 60 million dollars."

Why is there always a dispute over listing fees?

In the crypto world, which is primarily based on the spirit of decentralization, centralized exchanges (CEX) have become the main participants. However, the opaque operations of CEX listings make it difficult for the market to accept them, and rumors about CEX listings circulate from time to time. Binance's founder He Yi once stated after the listings of PNUT and ACT that "no listing fees were charged." Even a strong player like Binance needs to navigate the public discourse surrounding "listing fees."

He Yi's response to the listing fee controversy

Despite this, it remains challenging to convince the market that CEXs do not charge listing fees. Even without "open and honest" charges, discussions about hidden token fees continue to arise. Some leading CEXs explicitly state that there are no listing fees in their announcements, but after the listing, project parties still need to pay corresponding deposits to ensure the stability of the token price. Additionally, matters such as CEX's investment shares and activity funds must be agreed upon with CEX at the time of listing. These indefensible hidden listing fees have become a reason for the market to conclude that CEX listings operate in a "black box."

On one hand, such a cumbersome and opaque listing mechanism is an additional burden for project parties. They need to incur extra costs to deal with CEX listing matters, leading to a reverse selection problem. Project parties may lose sight of long-term development and instead develop an expectation of "listing success," ultimately resulting in most projects listed simply cashing out and running away.

On the other hand, the unfair listing practices of CEXs have even given rise to a niche market. Researching listings has become a serious "business," and the study of listings has become a required course for many investors and KOLs. For instance, the recent news from Equation News made a profit of 3 million dollars through trading news related to the ACT listing.

Equation News engaged in front-running trading through listing announcements

It can be said that the crypto world has long suffered from centralization; the wealth effect of each listing is almost entirely captured by CEXs (listing fees) and scientists (front-running trading after listings). Project parties, burdened with substantial listing fees, sacrifice the quality of their projects, and ultimately, it is retail investors who bear the cost. The logic behind listing events and the current trend of retail investors embracing memecoins while rejecting VC tokens is fundamentally the same, revolving around fairness.

What is the market optimistic about as HYPE reaches new heights?

However, the emergence of Hyperliquid has broken the deadlock of "black box listings."

Hyperliquid's rise in the crypto space can be traced back to the HYPE token's journey. After its TGE, HYPE entered the top 50 by market capitalization in just two weeks, briefly surpassing both new and established projects like Fantom and Bittensor, even exceeding Arbitrum itself. Although the narrative of Perp DEX is no longer novel, Hyperliquid has successfully refocused the market's attention on DEXs.

The indispensable listing mechanism

Today, HYPE broke through 20 dollars, setting a new historical high. Behind this new high is Hyperliquid's precise "market aesthetics," keenly capturing the market pulse of this cycle's "VC to meme" transition. Hyperliquid, which appears to have a "VC gathering" quality, did not follow the old path of first securing VC funding and then inflating trading volume before listing. Its founder, Jeff, has publicly expressed dissatisfaction with this form and market logic multiple times.

On the other hand, Hyperliquid's team operations and project development are also top-notch. Hyperliquid's ambitions extend beyond Perp DEX; it is actively building a "trading" public chain characterized by low latency, high throughput, high-frequency trading, and order books. When the underlying logic shifts from Perp DEX to a public chain, it also opens up its valuation ceiling.

In addition to the reasons mentioned above, Hyperliquid's success can also be attributed to its open and transparent listing mechanism. So how does Hyperliquid conduct its listings?

Dutch Auction

Hyperliquid uses a Dutch auction to auction the token ticker, and its listing process is relatively open and transparent, with detailed introductions in the official documentation.

First, if a project party wants to launch a spot token, they need to apply for the deployment rights of the HIP-1 native token (HIP-1 is the token standard established by Hyperliquid). Subsequently, a Dutch auction mechanism will be used to determine which party will ultimately acquire the token ticker. A Dutch auction, also known as a descending price auction, starts at a price higher than market expectations and continuously decreases until the first party accepts the price, at which point the transaction is completed. From a game theory perspective, a Dutch auction reflects the true psychological expectations of bidders and can achieve a fair price for the auction.

Hyperliquid's spot deployment process

When a project party deploys a token on Hyperliquid, they need to pay a gas fee, but this gas auction fee will later be returned to the HLP Vault.

Additionally, Hyperliquid's auctions typically occur every 31 hours, with a maximum of 282 spots available for listing throughout the year. This passive "capping" method also indirectly improves the quality of the listed projects.

In summary, compared to the opaque operations of CEXs that leave the public confused, Hyperliquid's listing mechanism is open and transparent, and the gas auction price collected will later be returned to the community in the form of staking, creating a virtuous cycle.

Derivatives of the auction mechanism

By adopting this public auction mechanism, more interesting routes will emerge in the future. For example, this auction mechanism may lead to "ticker" disputes. Earlier this year, when zkSync was listing on various major exchanges, the Polyhedra Network, which initially used the ZK token ticker, ceded the prestigious ZK ticker to zkSync, subsequently changing its token to ZKJ.

It is foreseeable that more projects will exhibit similar "conflicts" after launching on Hyperliquid. Project parties will fiercely compete for a ticker that better suits their tokens, and stories similar to "Sina spent 8 million yuan to purchase weibo.com" and "Finance was acquired by Moniker for 3.6 million dollars in 2007" will soon play out on Hyperliquid.

The "big fool" who spent 180,000 dollars

After completing its "epic" airdrop at TGE, Hyperliquid's auction prices have continuously broken new highs. Back in June this year, its auction ceiling hovered around 35,000 dollars, failing to break the previous hard cap of 35,000 dollars. However, after TGE, Hyperliquid received unprecedented market attention, directly "pushing" the price to 128,000 dollars, breaking through previous constraints. On December 11, it achieved a historical high of 180,000 dollars in the FARM auction.

The previous record-breaking 128,000 dollar ticker dispute stemmed from "SOLV," and it is noteworthy that the Solv Protocol will have its TGE soon, so it is highly likely that this ticker was acquired by Solv Protocol. Previously, the token tickers auctioned by Hyperliquid were mostly meme-related, such as PIP, CATBALL, etc.

After this airdrop went viral, Hyperliquid's popularity began to soar. The record-breaking auction of SOLV marks a turning point for Hyperliquid, transitioning from a meme paradise to a legitimate player, and Solv Protocol will be the first top project to launch on Hyperliquid.

At the same time, Solv's listing brings a significant "catalyst effect" to Hyperliquid, not only setting a precedent for future ticker auctions but also promoting a healthier trading structure.

Hyperliquid auction history

On one hand, after Solv led the ticker auction market to significantly break through the previous price ceiling, the subsequent token tickers auctioned by Hyperliquid have also "improved." The market views SOLV's auction as a reference for post-TGE pricing; for example, tickers like BUZZ and SHEEP have reached bids exceeding 100,000 dollars, with the lowest, HYFI, also trading at 90,000 dollars. Subsequently, the FARM ticker on December 11 further refreshed the historical record at 180,000 dollars.

The final owner of the FARM token ticker is @thefarmdotfun, and The Farm is developing the world's first GenAI artificial intelligence agent game, where users can generate different types of pet-like AI agents through GenAI models. When these AI pets are minted or traded, the FARM token will be used for fees. Under the premise of a fixed total supply, 50% of the FARM used as fees will also be burned. The 180,000 dollars spent on FARM was not in vain, as it quickly achieved a market cap of 30 million dollars within hours of opening, approaching 50 million dollars. It also opened up the imaginative space for the Hyperliquid ecosystem.

FARM's market cap approached 50 million dollars on December 13

On the other hand, according to AXSN data, the daily trading volume of the HYPE token on Hyperliquid has monopolized the market, reaching a trading volume of 360 million dollars, far ahead of tokens like PURR, PIP, and JEFF. With the listing of SOLV, Hyperliquid's trading structure will further optimize. As the market attention and public discourse surrounding the Solv Protocol's listing ferment, more project parties will choose to debut on Hyperliquid, and trading volumes will become more diversified in the future.

Hyperliquid trading structure distribution

What has Hyperliquid changed?

As Hyperliquid founder Jeff stated, "ownership goes to the believers and doers, not rent-seeking insiders." The development of Hyperliquid aligns with this principle.

A mutual pursuit with project parties

For VC coins, listing on Hyperliquid is also a market behavior that complements and benefits both sides. The listing auction itself serves as a form of advertising. Without paying additional advertising fees, Solv became the center of market discussion by winning Hyperliquid's auction ticker.

For many altcoin project parties, even if some projects are listed on major exchanges, it is still challenging to maintain stability. If they cannot list on top-tier CEXs during a bull market, it is nearly impossible to maintain an attractive "K-line." Without liquidity, there is no traffic, and consequently, no subsequent stories; most obscure tokens become "high heels" or "Christmas trees" after being listed.

Many tokens find it hard to maintain stability even after being listed on major exchanges

Hyperliquid provides a more economical solution, meeting the needs of projects that cannot initially launch on major exchanges while allowing them to "secure a seat" on a decent trading platform at a low cost. After integrating HyperEVM, tokens purchased on Hyperliquid can be used in other EVMs, further highlighting the relative advantages of its listing cost-effectiveness. Although Hyperliquid currently does not have the powerful listing effects typical of CEXs, the recent SOLV auction event has garnered widespread market attention, further emphasizing its status in the eyes of crypto enthusiasts.

Hyperliquid's epic airdrop resembles a grand market education campaign, allowing more people to recognize Perp DEX, understand, engage with, and use it; the transparent listing scheme is the first shot fired in the fight against opaque operations, leading to resistance, struggle, and victory.

From an industry perspective, the emergence of Hyperliquid is both a historical progression and a choice of the times. In response to the voices of the masses, the market has repeatedly voted with its feet for fairness. Hyperliquid's open listing mechanism is a revolution against the black box operations of existing CEX listings, forcing the entire industry to become more open and transparent.

What kind of entrepreneurial spirit does Crypto need?

Often, the founders of a company determine the core spirit of that enterprise. This statement is vividly illustrated in Hyperliquid.

Founder Jeff no longer trusts CEXs after the bankruptcy of FTX and does not accept any VC investments. In Jeff's view, most projects first secure investments from top institutions, then use various so-called incentive programs to embellish their data, ultimately completing their exit by listing on large trading platforms. This industry model seems to have become the ultimate template for many project parties to achieve rapid success: write stories, attract investments, and list on major exchanges. Ultimately, retail investors bear all the costs, leading to chaos; this short-sighted industry phenomenon is ultimately unsustainable.

In the end, Hyperliquid witnessed the victory of Jeff's decentralized spirit. The transparent and open mechanism, along with a strong and cohesive community, has propelled Perp DEX to a climax of 2.0, and Jeff can proudly say: We did not allocate tokens to any private investors, centralized exchanges, or market makers. The bullet fired years ago has now hit the mark.

Isn't the history of crypto development also a history of the struggle for decentralization, from the birth of Bitcoin to the recent capitalization debate of Neiro? Regardless of how crypto evolves, victory and justice will always stand on the side of the masses, on the side of fairness, and on the side of decentralization.