Author: Nancy, PANews
In just one week, Hyperliquid earned approximately $11 million in transaction fees. The profit from this single protocol is approaching half of the combined transaction fees from public chains such as Ethereum and Solana.
This crypto startup, arguably the world's most efficient in terms of workforce, has once again proven that perpetual contracts (PERPs) have become a money-printing business. Various players are accelerating their deployments to grab a slice of this enormous market.
Just a few days ago, the official Solana account set up its Twitter account @Perps as a subsidiary account and began actively driving traffic and increasing exposure for perpetual contract platforms within its ecosystem, aiming to re-invest in the Perp narrative. Although the Solana ecosystem is not lacking in Perp players, it has yet to make a significant enough splash in the market.
The founder personally intervened, which has been interpreted as an attempt to piggyback on Hyperliquid's success.
The "Perps" account once again reveals Solana's ambitions. For Solana, which aims to create an "on-chain Nasdaq" narrative, a full-scale attack on the Perp DEX is not surprising. However, before the ecosystem has even taken off, controversy and tension have already begun to rise.
Recently, Solana co-founder Anatoly Yakovenko retweeted several posts in support of Phoenix. These posts emphasized Phoenix's stronger competitiveness over Hyperliquid in terms of cost and execution speed.
As Solana's native Perp DEX, Phoenix is still in the Beta stage, and its market awareness and user base are far behind Hyperliquid, which has long held the industry leadership. Therefore, Anatoly Yakovenko's personal involvement has been seen by many as a high-profile attempt to attract traffic, and even has sparked accusations of opportunistic exploitation.
Some community members stated that they had almost never seen such a coordinated and enthusiastic response. Various Hyperliquid Killer narratives constantly emerge in the market, but the reality is that liquidity is often difficult to divert quickly. Toly responded that even the most powerful "killer machine" has its limits. Like an auto-farming machine in a game, when the kill counter reaches its limit, the system crashes. With the emergence of numerous low-cost competitors, Hyperliquid will eventually face the predicament of continuously diverting liquidity.
Some have pointed out that one of the key reasons for Hyperliquid's success lies in its token distribution and community airdrops, an advantage Phoenix currently lacks. Anatoly Yakovenko bluntly stated that if tokens are Hyperliquid's differentiating advantage, it will never reach Binance's level. The product itself is 100% the most important thing.
Meanwhile, compared to some Perp DEXs' various incentive activities that inflate trading volume, Yakovenko believes that OI (On-Exchange Index) and transaction fees are more valuable indicators. This is because trading volume is easily amplified by high leverage and short-term incentive activities, making it difficult to reflect true market activity; while OI represents real capital locked up in the market to bear risk. Even cross-platform hedging requires real capital investment, thus better reflecting the project's true market trust level. Transaction fee revenue is another important indicator.
Chase, Head of Growth at the Solana Foundation, pointed out that the core of competition in the Perp market is deep liquidity, and the essence of liquidity comes from whether market makers are willing to provide quotes frequently and for a long period of time. Compared to the long-standing debate in the community about the market's microstructure, market makers are more concerned with whether order order ordering is consistent, whether canceled orders are prioritized for execution, and whether the overall execution environment is stable and predictable enough. He also acknowledged that Solana currently has shortcomings in these areas, forcing market makers to hedge risks by widening spreads and even reducing their willingness to make market-making decisions, thereby affecting overall liquidity depth.
"The Hyperliquid guys seem to be on edge," Chase further stated, adding that this, to some extent, indicates that the Solana ecosystem has finally produced a sufficiently good Perp product that is beginning to gain market attention. They should have remained silent. This current FUD (Fear, Uncertainty, and Doubt) is precisely what Solana needs, because this is the environment in which it excels at growth and explosive development.
The development difficulty is far greater than that of CEX, so reducing development obstacles is a top priority.
In fact, as early as October last year, when the Perp DEX track entered a stage of explosive growth, Solana had already begun to consciously plan and support perpetual contract projects within the ecosystem.
However, compared to the star projects that emerged in ecosystems like BNB Chain and Base, Solana has consistently failed to make a significant impact. In April of this year, Perp DEX Drift Protocol, the largest DEX on the Solana ecosystem, suffered a hacker attack, resulting in losses of up to $285 million. This attack not only raised user concerns about security but also further damaged market confidence in the Solana Perp ecosystem.
Currently, the overall competitiveness of Solana Perp DEX remains significantly insufficient. DeFillama data shows that, as of May 14, among the top ten, only GMTrade and Pacifica are from the Solana native ecosystem, and their market size is insignificant; their combined 24-hour trading volume is less than 15% of Hyperliquid's.
This also means that Solana's Perp track comeback will not be easy.
However, Chase believes that Perp is the core sector with the largest trading volume and highest liquidity in the crypto market, and it is also key to determining whether Solana can become a global financial layer. If this piece of the puzzle can be completed, Solana has the opportunity to support global synthetic financial markets for stocks, commodities, foreign exchange, and crypto assets.
He further stated that while dedicated chains/execution environments like Hyperliquid, Lighter, and Paradex offer a superior experience, they sacrifice the core characteristics of on-chain finance: composability, atomic interaction, and decentralization. Solana's opportunity lies in achieving optimal pricing and a complete ecosystem without sacrificing these features. More importantly, Solana currently has no shortage of retail users and transaction traffic; a large number of Meme, Spot, and DeFi users are already active on-chain. What it lacks is a sufficiently excellent Perp product.
In response to community questions, Anatoly Yakovenko recently stated that Solana's core task remains to reduce development obstacles from a technical perspective in order to better advance DEX development.
He admitted that building a DEX on permissionless L1 that can approach Binance's price competitiveness is far more difficult than building a centralized exchange, resulting in a longer development cycle and higher costs of failure. Solana's spot spreads are already close to Binance's level, and the next goal is to continue improving the spread performance of the Perp market. As for how much market size and product-market fit the team can ultimately achieve, that depends on market demand. The current main task for the ecosystem is to reduce obstacles for developers from a technical perspective.
To this end, Solana is also preparing its infrastructure for a full-scale entry into the Perp DEX arena. Recently, Solana's largest consensus mechanism upgrade, Alpenglow, has been officially launched on the community test cluster. This upgrade restructures the validator communication and block confirmation process, which will significantly shorten the final confirmation time of transactions and significantly improve network response efficiency, thereby providing solid support for the on-chain environment required by Perp DEX.
With Solana fully launching its Perp campaign, the competition in this sector is rapidly intensifying. This battle has moved beyond narratives and marketing, entering a phase of intense competition focused on core strengths such as liquidity, performance, and infrastructure.
