Hyperliquid is killing it. Make no mistake, watching a relative newcomer regularly out-earn Ethereum in daily fees is a punch in the crypto gut. $1 million versus $300,000? Ouch. We cannot write this off as a misfire, or an air drop turbo mode temporary deflation. But clearly, Hyperliquid’s success isn’t simply due to smart marketing or a hyped token. It’s a symptom of a far larger issue plaguing the Ethereum ecosystem. It's a wake-up call.

Is DeFi Becoming Too Exclusive?

Let’s be honest, DeFi on Ethereum is a bit of a gated community. High gas fees are the bouncer, sending packing anyone without a hefty supply of ETH to spend on whatever they want. We're talking about a space that was supposed to democratize finance, yet it's becoming increasingly inaccessible to the average person. Whether it’s hyperliquid’s swiftness and efficacy or the creativity we’ve been lucky enough to experience, sometimes it doesn’t have to be like this.

We know it’s tempting to get caught up in the tech specs. HyperBFT consensus, sub-second latency and the ability to handle 100,000 orders per second are some notable features! What should truly count is the effect on real human beings. How many prospected users are being priced out of DeFi opportunities due to Ethereum’s limitations? How many other smart, innovative projects are we stifling because they don’t know that they can afford to operate on our network?

Think about it: Ethereum boasts over $46 billion in TVL, while Hyperliquid sits at a comparatively modest $627.27 million. Yet, Hyperliquid is pulling in more fees. So, where is all that value on Ethereum going? Primarily to those who are already wealthy enough to stake large quantities of ETH. The little guy? Instead, they are usually the ones getting left holding the bag, forced to spend a fortune in gas fees for a simple transaction. This isn’t the peer-to-peer decentralized revolution we were all promised.

Airdrops or Actual User Growth?

Hyperliquid’s airdrop of 310 million HYPE tokens (worth $7.6 billion) certainly raised eyebrows. It's a proven way to get people using your platform, and the numbers don't lie: 94,000 new users. Is this sustainable? Is this really organic user growth, or more an airdrop hunter mass migration?

Here's the thing: airdrops are a band-aid, not a cure. That’s because they can generate buzz and market themselves with lightning speed. These are all worthwhile efforts, but they do not address the core barriers that are preventing widespread adoption. Compromise has to give way to creating a truly sustainable and inclusive Ethereum ecosystem! It can win users by being innovative, not by begging with an open palm.

  • Scalability Solutions: Ethereum needs to get serious about scaling. Layer-2 solutions are a step in the right direction, but they're not a silver bullet. We need to explore more innovative approaches to increase transaction throughput and reduce gas fees.
  • Simplified User Experience: DeFi can be intimidating, even for experienced crypto users. Ethereum needs to simplify the user experience, making it easier for newcomers to navigate the ecosystem and participate in DeFi activities.
  • Community-Driven Development: Ethereum has a massive and passionate community. Let's leverage that community to drive innovation and build a more inclusive ecosystem.

Ethereum: Time to Redefine DeFi Values

Hyperliquid’s success isn’t a threat to Ethereum – it’s an opportunity. An opportunity to reflect on what DeFi is supposed to be about: empowering individuals, promoting financial literacy, and driving economic growth. It’s time to stop working to increase the profits of a privileged few. Together, we can build a more inclusive, resilient and sustainable transportation ecosystem for all.

Ethereum has the culture, the infrastructure, and the resources to do it. It must be the flexible, pioneering and socially-minded civic space that it sometimes talks about being. Indeed, as forward-looking as the Dencun upgrade was, it was insufficient alone. We need bold action, not incremental improvements.

Let’s use Hyperliquid’s success to jumpstart the next, more connected DeFi ecosystem. This ecosystem will expand the pie to benefit all, creating opportunities for all rather than the few winners. Ethereum has to defend its turf as the established home of decentralized finance. What it needs is an obsession with accessibility and inclusivity, rather than total value locked (TVL). The future of DeFi depends on it. Whatever the answer, I, for one, am looking forward to seeing how Ethereum answers this call.