No matter whether it's on-chain derivatives, the DeFi track, or DEX decentralized exchanges, these fields are already overcrowded, with competition becoming suffocating. In just half a month since its launch, Hyperliquid has ignited the attention and hot topics of the entire industry with actual candlestick charts, skyrocketing from $2 to $29 in a short time, attracting countless followers.

What is the logic behind this? Is it a simple wave of technological innovation, or is there some deeper driving force hidden? Let’s set aside all arrogance and prejudice, and dig deep into why this platform can quickly become the focus, and whether it will become the next meme token manufacturing machine.

What is Hyperliquid? What makes it different?

Hyperliquid is a decentralized perpetual contract trading platform. Unlike the familiar GMX and dYdX, it is not just another "alternative." It brings technological and model disruptions, addressing the common pain points of DEX: slow trading speed, high fees, and poor transparency. Its advantages are particularly evident in derivatives trading.

Here are its core features:

1. Decentralized Order Book Perpetual Contracts

Hyperliquid abandons the traditional DEX AMM (Automated Market Maker) model and adopts an order book model—more akin to traditional market trading. This method not only improves trading efficiency but also ensures precise matching.

2. Self-developed High-performance L1 Chain

Unlike platforms like GMX and dYdX that rely on Ethereum and Arbitrum, Hyperliquid has its independently developed high-performance L1 public chain. It is designed for low latency and high-frequency trading, ensuring that each transaction can be completed instantly with almost no delay, truly achieving "fast and stable."

3. Zero Gas Fees

Hyperliquid has eliminated gas fees entirely. For DeFi users, this improvement is revolutionary. You can trade without limits, without worrying about "losing money" due to gas fees.

4. Full Chain Transparency

Every transaction is recorded on-chain, publicly transparent, and fully verifiable. This not only enhances trust but also eliminates black-box operations, providing users with a sense of security.

5. Innovative Vault Mechanism

Hyperliquid allows users to create personal "vaults" and permits other users to deposit funds into these vaults, copying the trading strategies of the vault owners. In simple terms, the vault mechanism is like "expert-led trading," and experts can earn a 10% share of the profits.

To summarize Hyperliquid's advantages:

• Fast speed, low fees: The self-developed L1 chain and zero gas fees make trading more convenient and provide an excellent experience.

• High transparency: All trading data is public, eliminating black-box operations.

• Innovative and flexible: In addition to supporting perpetual contracts, it also offers advanced features like take profit/stop loss (TP/SL) and time-weighted average price (TWAP), catering to the needs of advanced traders.

Dutch Auction: A New Way to Launch Memes

Hyperliquid's meme launch mechanism—Dutch Auction—provides a new path for the resurgence of memes.

What is a Dutch Auction? Simply put, a Dutch auction is a "reverse auction": starting at a high price, the price gradually decreases over time until someone bids. In Hyperliquid, a "listing slot" is auctioned every 31 hours, with the price determined by bidding, and the starting price is usually double that of the previous round.

Why is this attractive for memes? Because of scarcity! With only one slot available every 31 hours, this is an excellent opportunity for any small-cap project or active community to gain exposure and engage in competition. Even lesser-known small tokens can ignite market enthusiasm through Dutch auctions, as long as the community is passionate enough and the ticker name is catchy.

For example, in a recent auction, the slot price soared to 100 WU (approximately $100,000), and this is just the beginning. It is this scarcity and competitive mechanism that encourages more projects to invest money for a chance to "break out." Small-cap meme coins can attract attention through this method, quickly becoming the focus of the industry.

Super High-Speed Capital Inflow: A Star-Making Factory for Hot Money

From January to December, Hyperliquid's cumulative trading volume surged from $14 billion to $82 billion, an increase of over 50 times. The number of users also grew from 25,000 to 244,000, nearly a tenfold increase.

The speed and scale of this capital inflow have direct impacts:

1. Liquidity Explosion: A massive influx of funds has continuously improved trading depth and market enthusiasm, providing fertile ground for meme development.

2. Small-Cap Project Eruption: Small projects can quickly gain attention after obtaining listing slots through Dutch auctions, rapidly accumulating funds and expanding their communities.

Hyperliquid now resembles a meme token manufacturing machine, pushing "small but beautiful" projects onto a larger stage.

How to Participate in Hyperliquid?

Method 1: Directly Participate in Spot Projects (Meme Coins)

On Hyperliquid, many meme projects have already launched. Some projects typically have low market caps but an active community atmosphere. If you prefer lower risk, you can choose to participate in these spot projects, looking for potential projects driven by hot money.

Method 2: Participate in Dutch Auctions to Seize Internal Opportunities

If you have a higher risk tolerance, you can use your research strategy to bid on related memes through the Dutch auction mechanism, which occurs every 31 hours. After a successful auction, your tokens will receive trading support and community exposure from Hyperliquid.

Risks and Recommendations

1. Market Risk: Participating in Hyperliquid's auctions means you may encounter some "meme coins" with low market caps and average community activity, and some tokens may face issues like pump and dump, or even project failure risks. Especially when auction fees rise to 100 WU, many small projects may not have enough funds to cover listing fees, making the quality of the projects less reliable.

2. Liquidity Risk: Since the listing slots on the platform are limited and only available every 31 hours, small projects with low liquidity may experience significant price volatility.

3. Participation Logic: Some project teams may obtain slots through lower auction fees and then use "pump" tactics to increase prices, leading to higher fees and trading volumes. However, if the project lacks strong market support or substantial value, it may lead to collapse or "Rug Pull."

4. Recommendations: For beginners or users with smaller funds, it is advisable to participate cautiously in Dutch auctions. You can first focus on existing, active meme projects, observing their market performance and community dynamics. When deciding whether to participate in an auction, ensure you have sufficient understanding and judgment to avoid blindly following market trends.

Don't Follow the Crowd Blindly, Stay Calm

Hyperliquid is undoubtedly a shining new star in the DeFi track. With its unique Dutch auction mechanism, ultra-fast trading experience, zero gas fees, and decentralized transparency, it has quickly attracted a large amount of capital and users, becoming the focus of market attention. Regarding its identity as a "meme token manufacturing machine," it is not just a wave of new gameplay but also a market reaction stemming from a thorough understanding of the platform's functions and mechanisms.

However, the influx of hot money does not mean that all projects are worth following blindly. Especially in such a complex market environment, it is essential to maintain a clear mind. The market is always right, and you can only make rational decisions based on a thorough understanding of the platform, projects, and market risks. The so-called "listing fee" auctions, quality shells, and the explosion of low-cap projects may be tempting, but the hidden risks are far greater than we imagine.

Do not be deceived by the so-called "beautiful narrative," avoid blind FOMO (fear of missing out), and maintain clear judgment, understanding the underlying logic behind each operation.

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