A Bet on HYPE, Not on Decentralization

Kyle Samani, co-founder of Multicoin Capital - an investment firm known for bold bets (like an early investment in Solana) and deep analysis - published a critique of the Hyperliquid exchange today. He called out a wide range of issues, from frankly odd ones (such as the founder's relationship with his home country) to very serious concerns like closed-source code and a centralized organizational model.

None of this is particularly surprising. Hyperliquid's rise to mass adoption has genuinely caused cognitive dissonance for many observers. From the start, the exchange has raised well-founded questions and attracted equally well-founded criticism. Hyperliquid presents itself as operating in the DeFi space, yet the exchange itself was fully centralized at launch. Only many months later did the team begin moving toward decentralization - and even then, mostly not at the operational level of the exchange, but in the design of the blockchain built around it.

I largely agree with Samani's criticism. I have written two detailed articles on this topic myself (one, two), trying to unpack the finer points of how Hyperliquid actually works.

But what interests me most today is something else. The most unusual part of this story is the bet proposed to Samani by Arthur Hayes, the founder of BitMEX. Hayes is betting that between February 10 and July 31, 2026, the $HYPE token will outperform any "shitcoin" with a market capitalization above $1 billion.

Samani is talking about fundamental flaws in Hyperliquid that could seriously affect how the broader public perceives the DeFi industry. Hayes, meanwhile, shifts the entire discussion into the realm of token price performance.

I thought the days were over when no one in crypto cared about what a project actually was under the hood, and everyone focused only on tokens and their multiples. I am genuinely surprised that some influential figures in the crypto market still view it through that lens.

The price growth of an exchange token is not proof that the exchange's underlying problems have been fixed.