B (3:38)

You outlined your thesis there for me. What do you think it is about hype that's making it outperform its competitors right now and giving it that, that oomph and that staying power people are actually trading.

A (3:51)

So the problem with a new perp Dex is how do you get activity on your platform? There's two ways. One, you lie about your volume. So you create the appearance of having lots of activity on the platform by having multiple wallets engage in wash trading. The second way, we used to call it the volumizer. You'd see like an exchange turn on the volumizer. Oh, look at all that fake volume they're putting through to make it look like there's shiny things happening on their platform. And the second thing you do is you do points programs, liquidity mining, token emissions and essentially traders will engage in activity on the platform trading because they think they're going to get some points or tokens on the back end and so they liquidity farm on the exchange. But none of this is real liquidity because obviously volumizing doesn't actually mean that there's somebody standing there willing to take your trade when you want to trade. It's just, it's fake volume. And then the liquidity mining ends as soon as your incentives end. And so what we wanted to see was okay, well how did hyper liquid do when these other platforms are saying we're going to offer keeper trading supposedly and all these incentives. And the metric that we look at is the average D trailing volume divided by the open interest rate, because open interest requires actual capital to stay on the exchange. That is what I would consider real volume. And so the lower the ratio of the reported trading volume to the open interest, the more genuine the volume is on the platform. We can never know with certainty how much wash trading is going on on a Pentagra platform or how much trading is due purely due to points. So you can only look at this metric as a guiding post. And Hyper Liquid has the lowest ratio of any top per deck. So it is the realest place to trade. And furthermore, when you want to trade big size, you actually want real traders on the other side. And so looking at the slippage to trade $100,000 orders, $10 million orders, and I think we looked at $1 million orders on the Bitcoin US dollar per which is obviously the most rated perp on any of these perp Dex. Hyper Liquid is the most liquid platform so it is the cheapest place to trade objectively. It's the most liquid place to trade objectively and it has the realest volume objectively of any per deck. And that's why we're super excited about it.

B (5:58)

You mentioned traders using Hyper Liquid to trade things like oil for example. Over the week, over a weekend when President Trump announced that there was war in the Middle east, we saw a lot of traders take to the platform to, to trade oil. Was that something that was surprising to you?

A (6:16)

No, it's a validation of the let's have everything have a per, whether it's a crypto thing or it's a non crypto thing. And this has been a dream for Perex is, you know, for many, many years. Hyperlink was just the first platform to actually execute on it and get volume and traction. And now tutors are like, well why try to open an interactive broker's account and go through all that nonsense of account opening, assuming I can even get one. Let me just get my, you know, EVM wallet or MetaMask, connect to Hyper Liquid and I can trade whatever I want whenever I want as long as I have stables or by coin or whatever it is. The, the funding currency is of these pairs. And so now traders are like, well this is super easy and it's liquid. Now these things are trading hundreds of millions of dollars, sometimes billions of dollars a day of average daily trading volume. It's more than enough for retail trader who needs 20x leverage on something highly volatile like oil over a particular weekend.

B (7:08)

You're obviously invested in, in hype. We, we've heard your thesis. We've heard of why you're bullish about it. What, what are you watching out for? What are, what are some of those watch outs that you might see happen and say I want to exit this position.

A (7:24)

I want to see the price equity ratio, price earnings ratio rise a lot and I want to see a lot of sort of hype around hype, if you want to call it that. Right now people are still like oh it was down 50%. Oh, it's a bear market. There's a lot of reasons why you don't want to be involved in the hyper liquid trade and it's silly. It's outperforming bitcoin in these really choppy times. I want to see everyone super bullish on hype. We're not there yet, so I don't think this is a well held opinion. And then we're going to see how the competition does. Right? Because obviously it's a very lucrative field. I think I saw some metric that hype has something like 70% of all revenue from, from Perp Dex goes to hype. Let's see if they can continue that, that, that dominance.

B (8:13)

In your post that we talked about just a few minutes ago, you compared hyperliquid to GMX in 2023. Talk to me about the comparison. What can we learn about hyperliquid when we compare it to how GMX performed back in 23?

A (8:29)

So GMX was the largest trading perp Dex back then. Again the thing that we look for real revenue spent by real users and that revenue goes back to the token holders. That was what GMX did and people like oh, Perp Dex is we've got a new winner. This is a thing that we're structurally long because we believe in trading and we know it actually makes money versus a lot of other protocols which are purely just narrative and a future promise of some sort of revenue. These exchanges always make revenue and especially when we go back to fundamentals during bear markets we're looking for quality shitcoins. The exchange tokens always outperform and that's what I was showing with gmx because back in sort of the doldrums of the post FTX bear market, what outperformed GMX did very, very well.

B (9:18)

All right, so $150 per token by August 2026 is your prediction. What needs to happen for us to get there?

A (9:28)

I think we need to return to an annualized revenue run rate of about 1.4 billion. That's where hyperliquid was back in August of 2020. 6. And they need to continue to emit, you know, very, very little of their team allocation. And so right now they're doing about 1% of what they're allowed to claim is what they're actually sort of vesting to themselves. If they continue that policy, I think people are going to start believing that Hyperliquid has overcome the low to no fee trading platforms and the team has taken a very pro holder stance of hype by not dumping all their tokens on everybody. And that will let people say, oh, the future is going to be very bright for HYP and instead of trading at a 12 PE ratio, it gets up near 30.

B (10:12)

What other tokens are you watching right now?

A (10:15)

Zcash. So I think the privacy narrative is only starting to heat up, especially as we start to see how easy it is for people to de anonymize bitcoin and other crypto transactions when you have AI agents compared with big data sets, big tech and big government. And so the privacy narrative is only going to pick up in people's minds about how, how do I protect my privacy on chain. I think that's zcash.

B (10:39)

Why zcash over some of the other privacy protocols, Some new, some old, like Monero Midnight. Why are you still bullish on zcash?

A (10:49)

I'm bullish on zcash because it's the bitcoin code base made private. I'm also bullish on Zcash because some of the cryptographic enhancements they've made since 2016 when this launched. We know that there is no more than trusted setup. It's actually cryptographically proven that it is anonymous. And as sort of the amount of shielded zcash grows, the community is invested in making sure that this is private. And so it becomes even a stronger protocol. And that's why I'm super bullish on zcash.

B (11:19)

All right, you're bullish on hype and zcash. You know, I'm not going to let you leave without giving me a bitcoin prediction. I always just got to throw that one in at the end. Does your bitcoin. I don't think that we actually achieved the last bitcoin prediction you gave me. What was it? It was 200,000 by $200,000 by the end of 50,000.

A (11:40)

Yeah, 250.

B (11:41)

I always confuse it. I'm like, it's 250, it's 200. But either way, we didn't get there. What's your, what's your prediction for this year?

A (11:48)

For this year, I'M going to just go the same number. $250,000 Bitcoin.

B (11:52)

250,000 by the end of the year. Love a bitcoin prediction. You know, you could just throw out any number with, with optimism, and we just got to see what happen. All right, Arthur, thank you so much for joining the show. As always, it was a pleasure, and I look forward to seeing you at Consensus.

A (12:09)

Thank you for having me.

B (12:10)

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