Blog

Hyperliquid Responds to Decentralization Criticism

cryptobizinvest.com January 9, 2025

0 0 4 minutes read

Welcome to The ProtocolCoinDesk’s weekly wrap-up of the most important stories in the development of cryptocurrency technology. I’m Ben Schiller, CoinDesk’s Features and Opinion Editor.

In this issue:

HyperLiquid responds to criticism of decentralization
StarkWare launches appchains on Starknet
Arbitrum deepens ties with South Korea’s Lotte Group
Do Kwon’s criminal trial is set for 2026
Pyth Network partners with Revolut on DeFi data deal
Ripple aims to boost stablecoin utility with Chainlink deal
AI coins failed to match the performance of 2024, despite the bullish outlook

This article was featured in the latest issue of The Protocolour weekly newsletter exploring the technology behind crypto, one block at a time. Sign up here to get it in your inbox every Wednesday.

Network news

HYPERLIQUID CRITICISM: HyperLiquid, a major up-and-comer in the world of decentralized finance, came under fire this week over claims that the network was too centralized and difficult to use. HyperLiquid is best known for its flagship decentralized exchange and it recently launched a layer-1 blockchain — all bids through the startup to, according to its flashy web copy, eventually “house all finances.” Despite earning praise for its fast and easy-to-use exchange interface, HyperLiquid has been criticized for, among other things, running a closed-source codebase. According to a widely shared X thread from Kam Benbrik, an employee at validator firm Chorus One, the validators running HyperLiquid are largely blind to how the chain works under the hood, making it difficult for them to run the hardware to run on. the chain. Benbrik also raised concerns that HyperLiquid’s highly concentrated token supply — and its process for accepting validators on its L1 chain — makes the chain centralized and vulnerable to failures. “Hyperliquid should improve transparency, decentralize staking, implement a fair validator selection process, and engage more with external validators,” Benbrik wrote. The complaints come on the heels of a sudden positive media attention for HyperLiquid following November’s hugely successful HYPE airdrop. All has not been smooth sailing for the startup, however, with an investigation emerging in December following reports of potential North Korean activity on the network — which some interpreted as a sign that the regime known for its efforts crypto-hack may have HyperLiquid in its crosshairs. HyperLiquid has brushed off North Korea’s security concerns, and it recently addressed centralization and closed-source criticisms in an X thread, stating that the criticisms largely stem from “misconceptions” about its technology. Read more. –Sam Kessler

SOLANA’S FIREDANCER GOES: Solana is leading the charge with its next-generation blockchain client “Firedancer,” which forces validators running the chain to adopt a stripped-down version of the upgrade ahead of a broader, yet-to-be-scheduled one. which is the official launch. “Firedancer’s backers believe that the software – developed by the crypto arm of trading giant Jump – will give Solana an unparalleled advantage in the crypto race to court global financial markets on blockchains,” writes CoinDesk’s Danny Nelson. “They point to its theoretical speed: a million transactions per second, orders of magnitude faster than any blockchain-based system today.” –Sam Kessler

STARKWARE APPCHAINS: Starknet, the layer-2 blockchain on Ethereum known for its embrace of zero-knowledge (ZK) cryptography, is adding appchains. StarkWare, the main developer of Starknet, told CoinDesk that its “SN Stack” will let developers easily build blockchains tailored to specific crypto use cases. Read more

ARBITRATOR-A-LOTTE: Arbitrum, the largest layer-2 network on Ethereum, plans to deepen ties with Lotte Group, the multibillion-dollar South Korean conglomerate known for its extensive portfolio of shopping malls, media companies and entertainment properties. Offchain Labs, the developer behind Arbitrum, and the Arbitrum Foundation, the non-profit overseeing the project’s development, said a financial deal is in the works that will cement Arbitrum as the primary infrastructure provider. of blockchain for “Caliverse,” Lotte’s metaverse gaming platform. Read more

AVALANCHE UPGRADES: Avalanche, now the tenth largest L1 by total value locked (TVL), has activated its much-anticipated Avalanche9000 upgrade, marking its biggest technical change since launching in 2020. The network is preparing these changes for months, with new features that will cut costs for sending transactions, running validators and building network applications. Leaders at Avalanche said the upgrade is intended to attract developers, encouraging them to create customized blockchains using its technology, known as subnets, or “L1s.” Read more.

DO KWONG TRIAL: Terraform Labs co-founder and former CEO Do Kwon’s fraud trial in the US is tentatively scheduled for January 2026, allowing prosecutors and Kwon’s defense attorneys time to review ” massive” six terabyte trove of data expected to be produced during the discovery process. At a preliminary hearing in Manhattan this week, lead prosecutor Jared Lenow told the court that the government expects to face further delays because of challenges in accessing encrypted information and unlocking the four cell phone provided by Montenegrin authorities when they extradited Kwon to the US on December 31. . Lenow added that the government should also translate the obtained materials from Kwon’s native Korean. Read more.

PYTH PARTNERS: Blockchain oracle firm Pyth Network has partnered with neobank Revolut to port digital banking data to decentralized finance. Revolut will provide data for more than 500 markets including foreign exchange, equities and commodities. Revolut also operates a crypto exchange although the amount of data is not published. Pyth competes with ChainLink and aims to provide accurate price feeds for DeFi protocols. It is airdropping its native token (PYTH) in 2023 and has $7.5 billion in value secured on its oracle, according to DefiLlama. Pyth also receives data from crypto exchanges Bitstamp, Bybit and Binance as well as several trading firms such as Jane Street and Cumberland DRW. Read more.

YOU HAVE COINS: AI-crypto tokens fail to fulfill their lofty 2024 goal despite Nvidia’s (NVDA) recent conference sparking strong sentiment in AI stocks in traditional markets. Last March, the NEAR The token doubled in the lead-up to Nvidia’s annual conference, gains that were mirrored in the broader crypto AI market. Fetch.AI (FET), the graph (GRT) and singularityNET (AGIX) all posted significant rallies to the upside in conjunction with the conference. Why are AI tokens losing momentum? One reason: the emergence of AI agent tokens. Read more.