Hyperliquid CEO Defends Transparent Crypto Markets for Fairer Trading

Jeff Yan, CEO of Hyperliquid Network, recently addressed concerns about transparent markets in a June 3 post. He responded to feedback from his previous post on May 31, where he outlined his transparency thesis. Yan argued that transparent crypto markets could enhance execution and liquidity for major participants. He highlighted that Hyperliquid’s model is one of the first to utilize a fully visible order book, although he acknowledged that the system is not yet fully efficient. Yan welcomed further discussion, noting that misunderstandings often lead to skepticism.

Yan challenged the notion that privacy leads to better trading execution, arguing that many benefits of privacy come from selecting counterparties. He explained that Hyperliquid’s model applies this screening while keeping order information public. By removing hidden deals, the system helps prevent insider advantages. Yan also emphasized the role of competition in enhancing execution quality for all traders. He believes that repeated trading interactions build trust and allow strategies to adapt over time, suggesting that open systems can match or exceed traditional finance venues.

Critics expressed concerns that visible order data could expose large traders to front-running and liquidation hunting by opportunistic traders. Some traders claimed that public order books worsen execution for large trades, preferring dark pools and OTC desks for hiding big orders. Critics argued that these private venues reduce market impact and protect large participants, while transparent systems might erode price quality for big trades. According to this view, open order books benefit small players but harm large traders.

On June 3, Yan compared the platform to public ETF rebalances in traditional finance, arguing that visible rebalancing does not prevent efficient execution or fair pricing. He explained that market makers can offer liquidity when big orders appear on the book, and multiple firms compete to fill those orders, improving price quality. Yan claimed that transparent crypto markets allow fair competition and lower slippage, fostering a competitive environment where whales receive better execution compared to private venues.

Yan compared private venues like dark pools to more open systems, noting that dark pools rely on limited counterparties and create exclusive access. In contrast, the Hyperliquid Network distributes order data across many market makers, mimicking a public OTC market by allowing any firm to compete for flow. This design democratizes access and avoids invitation-only trading desks. Yan suggested that traders get better pricing when many firms bid on orders, emphasizing that transparency and competition are key to fair execution.

Critics also feared that public liquidation data would invite predatory trading. Yan disagreed, stating that equal access significantly reduces this risk. He explained that insiders on centralized exchanges already exploit liquidation information, while on the Hyperliquid Network, everyone sees the same data, balancing the playing field. Yan described how anti-hunters counteract those trying to manipulate prices, leading to more stable and equitable markets. He noted that broad data access discourages predatory strategies and supports fair trading, offering data showing fewer attacks after applying these principles to the market.

Yan acknowledged that some high-frequency firms gain short-term advantages through latency, but most traders fall outside this small group and benefit from visibility. The system design uses features like cancel prioritization to curb toxic trading, lowering information asymmetry and promoting equal access. Yan stated that the system is still evolving, and full efficiency remains a future goal. He urged traders to engage with the platform and help refine its structure, ultimately seeing open markets as a way to foster fairer trading ecosystems.