Binance's Aster attack on Hyperliquid's open interest and trading volume, along with the subsequent attacks on HLP by $JELLYJELLY and $POPCAT, are merely minor ailments. Amidst the booming HIP-3 growth mode, the rumored BLP (lending protocol), and the positive news of $USDH actively staking 1 million $HYPE tokens to become aligned quote assets, Hyperliquid has revealed its own cracks—the HyperEVM ecosystem and $HYPE are not yet aligned. Alignment is not complicated. Under normal circumstances, the HyperEVM ecosystem consumes $HYPE, and $HYPE will also support the development of the HyperEVM ecosystem. This is an abnormal situation. The Hyperliquid Foundation's focus remains on the use of $HYPE in the spot, contract, and HIP-3 markets of HyperCore, while the development of the HyperEVM ecosystem remains a second-class citizen. Earlier, a third party proposed the HIP-5 proposal, hoping to allocate some funds from the $HYPE buyback fund to support ecosystem project tokens. However, this proposal was met with overall rejection and skepticism from the community. This points to a harsh reality: the current price of $HYPE is entirely supported by HyperCore market buybacks and has no spare capacity to support the HyperEVM ecosystem. Lessons from Others: Ethereum's Successes and Failures in Scaling L2 switching to Rollup does not satisfy ETH, and third-party sorters are almost absurd. The development of a blockchain involves three main entities: the main token (BTC/ETH/HYPE), the foundation (DAO, spiritual leader, company), and ecosystem project teams. The future of the blockchain hinges on the interaction model between the main token and ecosystem projects. Main token ⇔ Ecosystem: Two-way interaction is the healthiest approach. Ecosystem development requires the main token, and the main token empowers ecosystem projects. SOL is currently doing the best in this regard. Main token -> ecosystem; the main token empowers the ecosystem in one direction; after the main token TGE, everyone disperses, as is typical of Monad or Story. Ecosystem -> Main Token, the main token drains ecosystem projects, and the ecosystem is in a state of competition and cooperation with the main token. The evolution of the relationship between Ethereum, its DeFi projects, and L2 is the most direct and can reflect the current state of HyperEVM and its potential for future breakthroughs. According to 1kx research, the top 20 DeFi protocols account for about 70% of on-chain revenue, but their valuations are far lower than those of underlying public chains. The theory of fat protocols still holds sway, and people trust Uniswap and stablecoins on Ethereum more than Hyperliquid and USDe alone. Not to mention that Vitalik has long "hated" DeFi but can't live without it, and eventually awkwardly came up with the theory of low-risk DeFi. Many DeFi protocols have tried to build their own portals, from dYdX V4 to MakerDAO's EndGame plan in 2023, with technology choices spanning AltVM systems such as Cosmos and Solana. Then came Vitalik's public sale of $MKR. Beyond the interaction between the main token and the ecosystem, people have long underestimated the "official" legitimacy of public chains, especially the role of spiritual leaders. Vitalik's Ethereum Foundation (EF) has long been laissez-faire towards DeFi, focusing instead on metaphysical philosophical concepts. This approach, where the two sides fight like the snipe and the clam, allows the fisherman to profit, and the rise of the Solana DeFi ecosystem is not unrelated to this. Ultimately, Hyperliquid, with its exchange + public chain model, has entered a new phase of competition among public chains. Solana's impact on Ethereum has drawn criticism of Vitalik and EF, but beyond DeFi, the gains and losses of L2 Scaling are more intriguing. The L2/Rollup route has not failed technically, but the diversion of L1 revenue has put ETH into a downward cycle. Image caption: ETH Dream: L2 Scaling -> L1 Scaling Image source: @zuoyeweb3 When Ethereum L1 encountered scaling demands following the DeFi boom, Vitalik Buterin designated a scaling route centered on Rollups and went all in on the long-term application value of ZK, guiding the industry, capital, and talent toward ZK Rollups with FOMO, creating countless wealth effects or tragedies from 2020 to 2024. However, one thing is certain: DeFi is a real product aimed at end consumers. The continuous launch of L2 is essentially consuming Ethereum's L1 infrastructure resources, which means dividing ETH's value capture ability. 2024 will mark the end of L2/Rollup, and 2025 will see a return to the L1 Scaling route. After a four-year absence, he has returned, still primarily focusing on L1. Image caption: Speeding up and reducing fees hurts its own revenue. Image source: @1kxnetwork On the technical level, ZK and L2/Rollup have indeed significantly reduced the burden of L1, and the speed increase and fee reduction have indeed benefited participants, including ordinary users. However, in addition to the competitive and cooperative relationship between public chains and DeFi (applications), on the economic level, a complex triangular relationship between public chains and L2 applications has been added out of thin air, ultimately creating a lose-lose-lose situation. Ethereum's revenue is declining due to L2 caches, the wealth effect is being dispersed due to excessive L2 caches, and L2 caches are being diverted as applications continue to expand. Ultimately, Hyperliquid ended the dispute with a unified stance of "public chain as application, application as transaction," and Vitalik also lowered his arrogant head, reorganized EF (Ethereum Foundation), and embraced user experience again. During the transition from L2 to L1, the technological choices made at certain points in time, such as Scroll's emphasis on four ZK EVMs and Espresso's bet on decentralized L2 sorters, were ultimately proven false. Brevis's recent attention stems from Vitalik's renewed emphasis on the importance of ZK for privacy, and has little to do with Rollup. The fate of a project depends on both its own efforts and the course of history. Amidst a dazzling array of victories, Hyperliquid, having achieved one triumph after another, is once again facing Ethereum's dilemma: how should it manage the relationship between its main token and its ecosystem? To spark discussion: Alignment selection in HyperEVM BSC is an affiliate of Binance, and the HyperEVM team hasn't figured out exactly what Hyperliquid is. In the article "Building HyperEVM", I introduced Hyperliquid's unique development path: first, we created the controllable HyperCore, and then the open HyperEVM, connecting the two with $HYPE. In recent developments, the Hyperliquid Foundation has adhered to a token economics centered on empowering $HYPE, with HyperCore as the core and multiple HyperEVM ecosystems developing together. This leads to the core concern of this article: How should HyperEVM forge a distinctive development path? The BSC ecosystem is an appendage of Binance's main site and $BNB. PancakeSwap and ListaDAO on it also fluctuate with Binance's will, so there is no competitive relationship between BNB and BNB Chain. Even a powerful platform like Ethereum cannot maintain a long-term balance between ETH and the free and prosperous ecosystem. In comparison, Hyperliquid's existing problems can be broken down as follows: Without establishing a collaborative relationship between HyperEVM and HyperCore, HyperEVM's position is awkward. $HYPE itself is the only concern of the Hyperliquid Foundation, leaving HyperEVM ecosystem projects somewhat at a loss. Before answering the question, let's look at the current state of HyperEVM. It's very clear that the HyperEVM ecosystem projects are not keeping up with the Hyperliquid team's thinking. Image caption: HyperEVM stablecoin market share Image source: @AIC_Hugo The USDH team election triggered FOMO among many stablecoin teams, but HyperEVM does not have a significant advantage over existing stablecoin projects. BLP also has potential conflicts of interest with existing lending protocols, and the most obvious issue is the HIP-5 proposal incident, which has resulted in virtually no support for HYPE tokens to empower ecosystem projects. $ATOM represents the Cosmos team's bitter pill to swallow, while $HYPE is a mirage for ecosystem projects—no matter how much they do, it's all just consumables. A classic question arises for HyperEVM ecosystem projects: what if Hyperliquid does the same thing? Image caption: Hyperliquid flywheel Image source: @zuoyeweb3 Looking at the Hyperliquid team's consistent approach, they are very good at making moves during industry crises, thereby building their own antifragility. During industry downturns, not only is the cost of recruiting new members low, but they also use this to promote their own robustness. Over time, this has fostered a strong community consensus within Hyperliquid. The initial anti-VC narrative emphasized self-funded market making and entrepreneurship. Although it still allied with MM and had VCs purchase tokens, it had excellent public appeal and attracted early seed users. The marketing strategy during the development stage is not to recruit business development (BD) agents to attract KOLs and offer commissions, but to program them (Builder Code/HIP-3 Growth Mode), allowing users to fully customize them. Maximizing transparent data during the stable phase is Hyperliquid's latest contribution to blockchain beyond decentralization (few nodes and centralized governance by corporate will), allowing transparent data to represent the future of the blockchain; In the long term, HyperEVM should be open, not building an on-chain ecosystem based on human trust, but rather driving ecosystem development through permissionless access. The problem lies in the long-term strategy. The interests of the Hyperliquid Foundation and $HYPE are completely aligned, but to some extent, HyperEVM has the ulterior motive of prioritizing the development of its own token and ecosystem. This is understandable, as on-chain ecosystems are inherently a game of exchanging liquidity for growth. Governance mechanisms have failed to keep pace with the real-world demands of technological innovation. From Satoshi Nakamoto's departure to Vitalik's advocacy and rejection of DAOs, and then to the foundation model, public blockchain governance is still in the process of continuous experimentation. In a sense, the Vault Curator is also a manifestation of the contradiction between technology and mechanism, constantly absorbing the real governance system to move onto the chain. Lawyers + executives + business development, the problems of large companies on the chain are more abstract than those in Silicon Valley and Zhongguancun. The Hyperliquid team is at least closer to the technical characteristics of blockchain in terms of "everything is programmable". On-chain trustlessness is natural and there is no need to work hard to build a trust model. However, this approach still requires additional impetus on HyperCore, such as the management of HLP, which may have to be manually operated in times of crisis. At least at this stage, HyperEVM has not truly achieved "no access" in terms of governance mechanisms and liquidity. This does not mean that Hyperliquid still imposes technical restrictions on it, but rather that its legitimacy has not yet been fully opened to the community. We will witness the co-evolution of HyperEVM and $HYPE in the impending bear market, or the degeneration of Hyperliquid into Perp DEX. Conclusion Our ETH, Hyperliquid issue. Ethereum has an incredibly strong foundation. Despite the transitions from PoW to PoS, from L2 scaling to L1 scaling, and the impact of Solana in the DeFi field and Hyperliquid in the DEX field, it still maintains an unshakeable market position. Moreover, $ETH has already emerged from the bull-bear cycle, but $HYPE has not yet experienced a true bear market test. Sentiment is a very valuable consensus, and there is not much time left for $HYPE and HyperEVM to align.Binance's Aster attack on Hyperliquid's open interest and trading volume, along with the subsequent attacks on HLP by $JELLYJELLY and $POPCAT, are merely minor ailments. Amidst the booming HIP-3 growth mode, the rumored BLP (lending protocol), and the positive news of $USDH actively staking 1 million $HYPE tokens to become aligned quote assets, Hyperliquid has revealed its own cracks—the HyperEVM ecosystem and $HYPE are not yet aligned. Alignment is not complicated. Under normal circumstances, the HyperEVM ecosystem consumes $HYPE, and $HYPE will also support the development of the HyperEVM ecosystem. This is an abnormal situation. The Hyperliquid Foundation's focus remains on the use of $HYPE in the spot, contract, and HIP-3 markets of HyperCore, while the development of the HyperEVM ecosystem remains a second-class citizen. Earlier, a third party proposed the HIP-5 proposal, hoping to allocate some funds from the $HYPE buyback fund to support ecosystem project tokens. However, this proposal was met with overall rejection and skepticism from the community. This points to a harsh reality: the current price of $HYPE is entirely supported by HyperCore market buybacks and has no spare capacity to support the HyperEVM ecosystem. Lessons from Others: Ethereum's Successes and Failures in Scaling L2 switching to Rollup does not satisfy ETH, and third-party sorters are almost absurd. The development of a blockchain involves three main entities: the main token (BTC/ETH/HYPE), the foundation (DAO, spiritual leader, company), and ecosystem project teams. The future of the blockchain hinges on the interaction model between the main token and ecosystem projects. Main token ⇔ Ecosystem: Two-way interaction is the healthiest approach. Ecosystem development requires the main token, and the main token empowers ecosystem projects. SOL is currently doing the best in this regard. Main token -> ecosystem; the main token empowers the ecosystem in one direction; after the main token TGE, everyone disperses, as is typical of Monad or Story. Ecosystem -> Main Token, the main token drains ecosystem projects, and the ecosystem is in a state of competition and cooperation with the main token. The evolution of the relationship between Ethereum, its DeFi projects, and L2 is the most direct and can reflect the current state of HyperEVM and its potential for future breakthroughs. According to 1kx research, the top 20 DeFi protocols account for about 70% of on-chain revenue, but their valuations are far lower than those of underlying public chains. The theory of fat protocols still holds sway, and people trust Uniswap and stablecoins on Ethereum more than Hyperliquid and USDe alone. Not to mention that Vitalik has long "hated" DeFi but can't live without it, and eventually awkwardly came up with the theory of low-risk DeFi. Many DeFi protocols have tried to build their own portals, from dYdX V4 to MakerDAO's EndGame plan in 2023, with technology choices spanning AltVM systems such as Cosmos and Solana. Then came Vitalik's public sale of $MKR. Beyond the interaction between the main token and the ecosystem, people have long underestimated the "official" legitimacy of public chains, especially the role of spiritual leaders. Vitalik's Ethereum Foundation (EF) has long been laissez-faire towards DeFi, focusing instead on metaphysical philosophical concepts. This approach, where the two sides fight like the snipe and the clam, allows the fisherman to profit, and the rise of the Solana DeFi ecosystem is not unrelated to this. Ultimately, Hyperliquid, with its exchange + public chain model, has entered a new phase of competition among public chains. Solana's impact on Ethereum has drawn criticism of Vitalik and EF, but beyond DeFi, the gains and losses of L2 Scaling are more intriguing. The L2/Rollup route has not failed technically, but the diversion of L1 revenue has put ETH into a downward cycle. Image caption: ETH Dream: L2 Scaling -> L1 Scaling Image source: @zuoyeweb3 When Ethereum L1 encountered scaling demands following the DeFi boom, Vitalik Buterin designated a scaling route centered on Rollups and went all in on the long-term application value of ZK, guiding the industry, capital, and talent toward ZK Rollups with FOMO, creating countless wealth effects or tragedies from 2020 to 2024. However, one thing is certain: DeFi is a real product aimed at end consumers. The continuous launch of L2 is essentially consuming Ethereum's L1 infrastructure resources, which means dividing ETH's value capture ability. 2024 will mark the end of L2/Rollup, and 2025 will see a return to the L1 Scaling route. After a four-year absence, he has returned, still primarily focusing on L1. Image caption: Speeding up and reducing fees hurts its own revenue. Image source: @1kxnetwork On the technical level, ZK and L2/Rollup have indeed significantly reduced the burden of L1, and the speed increase and fee reduction have indeed benefited participants, including ordinary users. However, in addition to the competitive and cooperative relationship between public chains and DeFi (applications), on the economic level, a complex triangular relationship between public chains and L2 applications has been added out of thin air, ultimately creating a lose-lose-lose situation. Ethereum's revenue is declining due to L2 caches, the wealth effect is being dispersed due to excessive L2 caches, and L2 caches are being diverted as applications continue to expand. Ultimately, Hyperliquid ended the dispute with a unified stance of "public chain as application, application as transaction," and Vitalik also lowered his arrogant head, reorganized EF (Ethereum Foundation), and embraced user experience again. During the transition from L2 to L1, the technological choices made at certain points in time, such as Scroll's emphasis on four ZK EVMs and Espresso's bet on decentralized L2 sorters, were ultimately proven false. Brevis's recent attention stems from Vitalik's renewed emphasis on the importance of ZK for privacy, and has little to do with Rollup. The fate of a project depends on both its own efforts and the course of history. Amidst a dazzling array of victories, Hyperliquid, having achieved one triumph after another, is once again facing Ethereum's dilemma: how should it manage the relationship between its main token and its ecosystem? To spark discussion: Alignment selection in HyperEVM BSC is an affiliate of Binance, and the HyperEVM team hasn't figured out exactly what Hyperliquid is. In the article "Building HyperEVM", I introduced Hyperliquid's unique development path: first, we created the controllable HyperCore, and then the open HyperEVM, connecting the two with $HYPE. In recent developments, the Hyperliquid Foundation has adhered to a token economics centered on empowering $HYPE, with HyperCore as the core and multiple HyperEVM ecosystems developing together. This leads to the core concern of this article: How should HyperEVM forge a distinctive development path? The BSC ecosystem is an appendage of Binance's main site and $BNB. PancakeSwap and ListaDAO on it also fluctuate with Binance's will, so there is no competitive relationship between BNB and BNB Chain. Even a powerful platform like Ethereum cannot maintain a long-term balance between ETH and the free and prosperous ecosystem. In comparison, Hyperliquid's existing problems can be broken down as follows: Without establishing a collaborative relationship between HyperEVM and HyperCore, HyperEVM's position is awkward. $HYPE itself is the only concern of the Hyperliquid Foundation, leaving HyperEVM ecosystem projects somewhat at a loss. Before answering the question, let's look at the current state of HyperEVM. It's very clear that the HyperEVM ecosystem projects are not keeping up with the Hyperliquid team's thinking. Image caption: HyperEVM stablecoin market share Image source: @AIC_Hugo The USDH team election triggered FOMO among many stablecoin teams, but HyperEVM does not have a significant advantage over existing stablecoin projects. BLP also has potential conflicts of interest with existing lending protocols, and the most obvious issue is the HIP-5 proposal incident, which has resulted in virtually no support for HYPE tokens to empower ecosystem projects. $ATOM represents the Cosmos team's bitter pill to swallow, while $HYPE is a mirage for ecosystem projects—no matter how much they do, it's all just consumables. A classic question arises for HyperEVM ecosystem projects: what if Hyperliquid does the same thing? Image caption: Hyperliquid flywheel Image source: @zuoyeweb3 Looking at the Hyperliquid team's consistent approach, they are very good at making moves during industry crises, thereby building their own antifragility. During industry downturns, not only is the cost of recruiting new members low, but they also use this to promote their own robustness. Over time, this has fostered a strong community consensus within Hyperliquid. The initial anti-VC narrative emphasized self-funded market making and entrepreneurship. Although it still allied with MM and had VCs purchase tokens, it had excellent public appeal and attracted early seed users. The marketing strategy during the development stage is not to recruit business development (BD) agents to attract KOLs and offer commissions, but to program them (Builder Code/HIP-3 Growth Mode), allowing users to fully customize them. Maximizing transparent data during the stable phase is Hyperliquid's latest contribution to blockchain beyond decentralization (few nodes and centralized governance by corporate will), allowing transparent data to represent the future of the blockchain; In the long term, HyperEVM should be open, not building an on-chain ecosystem based on human trust, but rather driving ecosystem development through permissionless access. The problem lies in the long-term strategy. The interests of the Hyperliquid Foundation and $HYPE are completely aligned, but to some extent, HyperEVM has the ulterior motive of prioritizing the development of its own token and ecosystem. This is understandable, as on-chain ecosystems are inherently a game of exchanging liquidity for growth. Governance mechanisms have failed to keep pace with the real-world demands of technological innovation. From Satoshi Nakamoto's departure to Vitalik's advocacy and rejection of DAOs, and then to the foundation model, public blockchain governance is still in the process of continuous experimentation. In a sense, the Vault Curator is also a manifestation of the contradiction between technology and mechanism, constantly absorbing the real governance system to move onto the chain. Lawyers + executives + business development, the problems of large companies on the chain are more abstract than those in Silicon Valley and Zhongguancun. The Hyperliquid team is at least closer to the technical characteristics of blockchain in terms of "everything is programmable". On-chain trustlessness is natural and there is no need to work hard to build a trust model. However, this approach still requires additional impetus on HyperCore, such as the management of HLP, which may have to be manually operated in times of crisis. At least at this stage, HyperEVM has not truly achieved "no access" in terms of governance mechanisms and liquidity. This does not mean that Hyperliquid still imposes technical restrictions on it, but rather that its legitimacy has not yet been fully opened to the community. We will witness the co-evolution of HyperEVM and $HYPE in the impending bear market, or the degeneration of Hyperliquid into Perp DEX. Conclusion Our ETH, Hyperliquid issue. Ethereum has an incredibly strong foundation. Despite the transitions from PoW to PoS, from L2 scaling to L1 scaling, and the impact of Solana in the DeFi field and Hyperliquid in the DEX field, it still maintains an unshakeable market position. Moreover, $ETH has already emerged from the bull-bear cycle, but $HYPE has not yet experienced a true bear market test. Sentiment is a very valuable consensus, and there is not much time left for $HYPE and HyperEVM to align.