Hyperliquid founder blocks market makers to keep the DEX ‘credibly neutral’

The perpetual DEX wars aren’t slowing down anytime soon. 

Following the ongoing Lighter DEX FUD for allegedly partnering with perceived ‘extractive’ market makers such as Jump Trading and Hayden Davis, the architect behind the Libra memecoin scandal, Hyperliquid, has jumped on the chaos. 

In a statement, Hyperliquid founder Jeff Yan positioned the DEX as a better and “credibly neutral” option, noting that, 

“Integrity has always been one of Hyperliquid’s core values. The house of all finance must be credibly neutral. This means no private investors, no market maker deals, and no protocol fees to any company.”

Source: X

He took a swipe at those uncomfortable with Hyperliquid’s strict stance and added, 

“This principle of fairness frustrates a few users and builders who are used to special treatment.”

Unpacking the Lighter DEX FUD

The latest Lighter FUD emerged after an analyst uncovered that five undisclosed wallets received $26 million worth of Lighter [LIT] after providing liquidity worth $5 million. The analyst noted that Jump Trading received an LIT airdrop as well as part of a market-making deal. 

Kelsier Labs, the venture firm led by Hayden Davis, also received $11.52 million LIT. 

Additionally, Tron founder Justin Sun was rewarded for being an early liquidity provider. However, some of these details were not disclosed early enough to the community, according to the on-chain researcher. 

Following the revelations, Web3 researcher ZachXBT sarcastically blasted Lighter, stating that “crime pays.”

One of the community users criticized the opaque aidrop and said, 

“This is quite bad and very blatant. Who knows how many more rogue airdrop addresses there are.”

Amid the scrutiny, the Lighter team issued a statement and disclosed that they had an early arrangement with liquid providers and market makers. Even so, some users doubted this assurance as one quipped, 

“It’s funny that Vlad (Lighter founder) seems to think it’s normal to make side deals and use Lighter airdrop allocation as a settlement tool with third parties, outside the public points program.”

Source: X

Hyperliquid’s dominance falls

Meanwhile, Hyperliquid’s market share has dropped below 19% as rivals such as Lighter gained ground.

Hyperliquid’s dominance peaked in May at 75%. However, it has been in decline over the past few months, stabilizing between 19% and 20%. 

Source: Dune

On the price charts, HYPE was up about 2% and valued at $24.8 at press time, following Jeff Yan’s remarks. However, it was still stuck in the short-term price range of $23-$26. 

Clearing the overhead resistance levels at $26 and $27 could allow further recovery if the broader market sentiment improves. 

Source: HYPE/USDT, TradingView

Final Thoughts

• Hyperliquid’s founder defended his position to block market makers from the platform. 
• However, its market share has declined from 75% to 19% amid rising competition from Lighter and others.