Hyperliquid Addresses Validator Concerns

Hyper Foundation, the organization behind the Layer-1 derivatives DEX Hyperliquid, has responded to growing community concerns regarding validators on its network.

Key Issues Raised

1. Validator Slots Allegedly Sold:
   Allegations surfaced that Hyperliquid was selling validator slots, raising questions about centralization, especially since the network operates with only 16 active validators.
2. Transparency and Node Code Concerns:
   Community members, led by accounts like @KamBenbrik on platform X, criticized the lack of transparency in validator selection and questioned the closed-source nature of Hyperliquid’s node software.
3. Single-Binary System Dependency:
   Critics also pointed out potential risks associated with Hyperliquid’s reliance on a single-binary system for validator operations.

Hyper Foundation’s Response

1. Selection Based on Testnet Performance:
   Hyper Foundation clarified that validators were chosen based on their performance during the testnet phase and categorically denied any sale of validator slots.

   “Such accusations undermine the contributions of validators who have worked tirelessly to build this network,” the foundation stated.

2. Decentralization Commitment:
   Hyper Foundation reiterated its goal to decentralize the network further, with plans to increase the number of validators as the ecosystem expands. The foundation also highlighted its staking program, designed to incentivize high-performing validators and promote decentralization.
3. Code Transparency Plans:
   Addressing the closed-source criticism, the foundation explained that the node code is currently closed to ensure security but emphasized that open-sourcing remains a critical objective once the system is robust and secure.
4. Defense of Single-Binary Approach:
   Hyper Foundation defended its reliance on a single-binary system, pointing out that even mature networks like Solana predominantly operate with a single client. The foundation emphasized its current scalability and speed advantages, which it believes set Hyperliquid apart from competitors.

Token HYPE Update

Hyperliquid launched its token, HYPE, in November 2024 through a Token Generation Event (TGE) and a widely praised airdrop. Key highlights include:

• 31% of the total supply (310 million HYPE tokens) allocated to eligible community members with no vesting restrictions.
• Token price surged post-airdrop, peaking at an all-time high of $35.73 on December 21, 2024.
• HYPE is currently trading at approximately $21.50, marking a 40% decline from its peak.

Hyper Foundation’s response reflects its commitment to addressing community concerns while maintaining transparency and fostering long-term network growth.