Hyperliquid News Today: VC Cash Threatens Crypto's Core Principles

Hyperliquid's founder, Jeff, has sounded an alarm over the growing influence of venture capital (VC) in the cryptocurrency sector, warning that such funding models risk altering the foundational principles of protocols like Bitcoin, according to a Phemex report. Speaking at a recent industry event, Jeff argued that if Bitcoin's creator, Satoshi Nakamoto, had accepted VC backing, the network's neutrality and decentralization—cornerstones of its original design—might have been compromised. "The integrity of a protocol is defined by its genesis," he stated, emphasizing that early-stage token concentration among institutional investors can erode trust and skew governance, as noted in an AltcoinBuzz article.

This critique comes as Hyperliquid itself navigates rapid expansion, having filed an S-1 registration with the U.S. SEC to raise $1 billion through a public offering, according to a Coinrise report. The capital raise, coupled with a merger with Sonnet BioTherapeutics and Rorschach I LLC, aims to fuel corporate growth and bolster the firm's treasury of HYPE tokens. The platform currently holds 12.6 million HYPE and $305 million in cash, reflecting a strong balance sheet. Hyperliquid's leadership, including former Barclays CEO Bob Diamond and CEO David Schamis, has positioned the firm as a serious contender in institutional-grade crypto trading.

The founder's concerns about VC influence are not abstract. Data from Messari shows that over 50% of early-stage token supplies are often held by founders and investors, raising questions about fairness and long-term adoption, as reported by AltcoinBuzz. Jeff highlighted Solana's early fundraising rounds as a case study, where large venture investors secured millions of tokens before public sale, sparking debates over centralization. He advocated for "untainted" protocols—projects that prioritize equitable token distribution, transparent governance, and community participation from inception.

Hyperliquid's recent moves underscore its commitment to scalability and innovation. The platform recently integrated HyperEVM, its Ethereum-compatible smart-contract layer, into Bitget Wallet, connecting millions of users to its $5 billion onchain ecosystem, according to a GlobeNewswire release. This integration enables cross-chain transfers, DeFi applications, and HYPE token utilities, streamlining access to Hyperliquid's high-performance decentralized exchange (DEX). Bitget Wallet's CMO, Jamie Elkaleh, called the update a "gateway to the next wave of onchain finance," emphasizing reduced onboarding friction and institutional-grade infrastructure in a CoinEdition piece.

Meanwhile, Hyperliquid's user base and liquidity continue to grow. Notably, prominent crypto trader Machi Big Brother deposited 220,000 USDC into the platform, subsequently increasing his long positions in ETH and HYPE, according to a CryptoBriefing report. The platform's total value locked (TVL) has surpassed $5 billion, reflecting expanding confidence in its deep liquidity and onchain order-book model.

The founder's warnings resonate in a broader market context where projects like BlockDAG and World Liberty (WLFI) are also vying for dominance. BlockDAG's $430 million presale and 3.5 million X1 app users highlight real-world adoption, while WLFI's recent price surge, fueled by political catalysts and whale inflows, underscores the role of speculative and institutional sentiment, as covered by Coinrise. Together, these developments signal a shift toward projects combining traction, credibility, and scalability.

As crypto matures, Jeff's emphasis on protocol neutrality and fair distribution may become a key differentiator. For Hyperliquid, balancing growth ambitions with ideological purity will be critical to maintaining trust in an increasingly competitive landscape.