Dialogue with Ryan Watkins: Why This Round of the Digital Asset Bull Market Will Be the Largest in History

Unpacking the trillion-dollar ambition of the Everything Exchange.

Written by: The Rollup
Compiled by: Baihua Blockchain

Host: Ryan, hello. Can we do a quick audio test?

Ryan: Sure, the sound is completely normal now.

Host: Great, the equipment is set up. Before we start, I reflected on my experience with Robbie when we first bought HYPE, realizing that we didn’t fully capitalize on that market wave. Experiencing two 80% pullbacks on an asset facing regulatory resistance was indeed panic-inducing. However, we have been tracking this asset for over two years, and it has always been a core pillar of our portfolio. Fortunately, the portfolio achieved significant excess returns during the bear market, and we retained complete proof of our positions. You turned the situation around, and as a friend of Chris Berniski and a staunch HYPE bull, we are eager to hear your thoughts. Recently, Jeff released a proposal regarding HIP-3 Star, a new initiative to push Hyperliquid into the U.S. market. Where were you when Trump mentioned Hyperliquid publicly? What was your reaction?

Ryan: I was sitting in the same spot, on a call with co-founder Dan. During the call, I received a lot of messages from the team telling me that HYPE's price had skyrocketed to around $70. Just a few minutes before, it was still around $59, and then the price surged vertically. We initially had no idea why, and then learned that Trump mentioned Hyperliquid directly during a televised press conference. It was indeed a crazy moment.

In fact, as early as July and August, Hyperliquid had deployed features related to Stars on the public testnet for the first time. The team only pushes core features to the public testnet when they hope the public will start experimenting and preparing. Data analysis shows that it takes about three months on average for Hyperliquid to move from the public testnet to the mainnet, and no more than six months at most. Therefore, we anticipated that this progress was brewing and about to land. Although we did not expect high-level politicians to publicly mention the project, the team had already made ample strategic preparations. Many past investors' core doubts about Hyperliquid were: "The data and growth are indeed excellent, but how will we respond if U.S. regulators take restrictive measures?" Now, this biggest obstacle is gradually being removed. The U.S. capital market is the largest and most important financial liquidity center in the world, and breaking through this barrier opens up a very high growth ceiling for Hyperliquid.

From On-chain Dominance to "Everything Exchange": Reshaping Core Investment Arguments and Indicator Iteration

Host: Excellent investors dynamically adjust their hypotheses based on the latest information. Can you review the core logic behind your initial position building, and how your investment argument and future outlook have evolved in light of the latest developments?

Ryan: In the early stages of the project, the investment argument was relatively pure and intuitive. At that time, its valuation was about $3 billion, with annual revenue reaching about $200 million, and the business maintained a very high growth slope. At that time, there was almost no liquidity in the market except for airdrop recipients; the only way to obtain tokens was to bridge assets to Hyperliquid itself. This mechanism was strategically clever; any fund or individual wishing to build a position had to use the trading platform personally, directly solidifying real users for the platform, and no institution held pre-set cheap shares. In the industry landscape at that time, it was already one of the top four applications and public chains in terms of revenue, while many of the leading projects did not have long-term fundamental support. At that stage, the asset had a very high revaluation space, and even a three to five times increase would still be in the undervalued range.

At the same time, we have been macro-level deducing the core hypothesis of the "Everything Exchange," which is to achieve free trading of any global asset on a permissionless public chain network, with derivatives as the core focus of the long-term track. By early 2025, through in-depth communication with core trading teams and market-making units, I established a deep belief in intergenerational holding. There has long been an inertia misconception in the market: limiting on-chain perpetual contracts to stock competition within the Web3 native ecosystem. However, the real strategic goal is to penetrate the global mainstream financial system, with the primary stage being to capture market share from leading centralized exchanges like Coinbase, Bybit, and BN, and the ultimate goal being to benchmark against traditional financial giants like CME. The core data we monitor long-term is not the share relative to on-chain competitors, but its share relative to BN and Bybit. This indicator has been steadily rising and continuously setting historical highs, establishing a strong growth narrative.

Looking ahead, with the full-margin investment portfolio margin system, spot market, HIP-3, and compliance framework (regulated HIP-3 and HIP-4) being put in place, Hyperliquid's underlying vision is gradually taking shape: the platform will evolve into an ultimate venue that allows users to trade any financial asset in the world using almost any mainstream asset as full collateral. This is a unique institutional advantage of blockchain architecture, unifying global assets for clearing and operating on the same underlying permissionless ledger. Currently, we are still in the very early stages of realizing this grand vision. Even looking at perpetual contracts alone, their trading scale in the global CFD or retail options market penetration is less than 1%, while the cash flow and protocol revenue generated are already quite impressive.

When a protocol has strong endogenous compounding capabilities, investors should not be troubled by short-term monthly data fluctuations but should focus on long-term structural patterns. The industry has previously been filled with high liquidity capital churn and cyclical speculation, which quickly return to zero once macro assets adjust. Now, the industry is gradually entering an irreversible structural track: the number of real traders and trading volume settled on-chain is growing at a compound rate, and the actual commercial revenue captured by the underlying protocol is continuously amplifying, making this one of the most certain long-term main lines in today's financial market.

Host: We completely agree with the view of breaking free from cyclical anxiety and excessive focus on monthly income fluctuations. Before the earlier key news landed, when HYPE was oscillating around $40, some market voices expressed doubts due to short-term fee pullbacks, neglecting the deeper fact that HIP-3's proportion in overall trading volume was steadily rising. You initially focused on its market share relative to centralized exchanges, later shifting to its penetration rate in the traditional derivatives market. Based on the current situation, what core indicators do you value most that can represent the system's continuous compounding?

Ryan: Evaluating this system cannot rely on a single indicator but requires constructing a comprehensive indicator matrix: first, the market share changes relative to top institutions like BN, Coinbase, and Bybit; second, the penetration ratio of the platform in total global CFD, futures, and options trading; third, the absolute growth rate of total platform trading volume and the compound growth rate of net revenue captured by the protocol; fourth, the net inflow of funds and the growth curve of average net assets on-chain. As long as these underlying operational indicators continue to achieve compounding growth, short-term secondary market price fluctuations are not to be feared, as the intrinsic value bottom of the system is being irreversibly raised.

The Barbell Strategy Choice: The Winner-Takes-All of Real Income Cash Flow and Value-Storing Assets

Host: We also adopted a barbell structure in building our asset allocation: one end heavily invests in on-chain businesses with strong self-sustaining capabilities, broad long-term potential market space (TAM), and sustainable token economics; the other end allocates purely value-storing assets. We have core positions in Bitcoin, gold, and HYPE, gradually expanding towards applications that generate actual cash flow while excluding basic infrastructures and excessive L1/L2 intermediaries that lack business barriers from the portfolio. How do you view this cash flow-based allocation framework, similar to traditional equity investment perspectives? Additionally, what are your insights on the return of privacy assets like Zcash to the value-storing discussion?

Ryan: High-quality on-chain businesses that essentially belong to "profit machines" are reshaping the industry narrative. In the traditional physical financial system, the core purpose of business organizations is to use capital to create real profits. The crypto industry has long deviated from this common sense, relying on false liquidity indicators and attention games to drive valuation reconstruction. With changes in the macro environment, crypto assets are no longer the only speculative outlet for global excess liquidity; any protocol must prove its holding value and fundamental support.

It is important to clarify that generating real income is just one manifestation of a healthy fundamental. Some businesses choose to retain the generated cash flow and invest it fully into ecological expansion rather than immediately distributing it to token holders, which is also a reasonable capital allocation method. For example, Morpho's borrowing balance and real demand continue to show a hockey stick-style steep growth, and its founder chooses to invest the generated value entirely into protocol expansion rather than opening the fee switch, which is highly rational during a high-speed development period. Meanwhile, mechanisms like Hyperliquid execute buybacks and burns through fully transparent on-chain smart contracts, similar to Ethereum's deflationary settlement. Regardless of the method, the core lies in whether the system continues to create positive economic total value. This fundamental differentiation greatly enhances the clarity of asset identification; as market capital gradually converges on at least a few truly well-operating businesses, the entire investment logic will become very clear.

Host: As the market matures, the entrepreneurial environment is harsher than before. In the past, founders could rely on narratives to raise capital even without underlying business support, but now institutions and secondary markets will conduct extremely stringent horizontal comparisons: facing efficient business paradigms like Hyperliquid, Lighter, Pump, or Morpho, mediocre competitors find it hard to gain attention and capital allocation. This makes asset selection clearer to some extent, but also forces startup teams to engage in direct confrontations on extremely hardcore fundamental dimensions.

So on the other side of the barbell strategy, regarding assets like Bitcoin and Zcash that have value-storing properties, due to their lack of operational income and cash flow models, relying more on reflexivity and consensus mechanisms, how do you assess the evolution path of this sector?

Ryan: In the pure value storage market, the underlying competitive dynamics are extremely brutal, characterized by a "winner-takes-all" or "absolute monopoly at the top". Throughout the thousands of years of human evolution of currency and precious metals, gold has captured the vast majority of market value, amounting to hundreds of trillions of dollars, while secondary metals like silver have been left far behind, and the subsequent tiers have almost completely lost their monetary premium. As a fully globalized, permissionless open competitive market, blockchain will reflect this power law even more thoroughly, with typically only one or two beacons of value storage assets that can transcend cycles.

Bitcoin, with its impeccable first-mover advantage, the definitive cap of 21 million coins, and a global liquidity network, has indisputably solidified its core position. If we were to nominate potential synergistic competitors, the most qualified would not be single-function fork coins that replicate traditional currency attributes, but rather the core native assets of public chains that carry the largest scale of real economic activity, the highest liquidity depth, and collateral demand. As a value storage asset, its core prerequisite is to have an extremely large holding community, abundant clearing depth, and global collateral universality, which can often only be nurtured by top-tier smart contract networks.

The early construction of Zcash by cypherpunks was highly idealistic, but over several rounds of industry cycles, the pure geek vision has been somewhat marginalized. Currently, some market forces are attempting to repackage it as an institutional-level "privacy Bitcoin" narrative, but from on-chain actual behaviors, very few capital entities have truly treated it as a high-frequency privacy currency or a daily measure of value. Privacy, in its technical essence, is a functional module that can be realized through upgrades in the tech stack of general-purpose smart contract public chains; without absolute liquidity depth, the market does not need a second Bitcoin with overlapping functional positioning. The monetary system itself possesses strong network externalities, and once network effects settle at the top, they will continue to self-reinforce in a nonlinear manner.

Transparent Ledgers and Social Trading: Reshaping Global On-Chain Finance in an MMORPG

Host: In your recent lengthy article on the evolution of social trading, you compared the current on-chain trading ecosystem to the "largest MMORPG game on a global scale." There has been a phenomenon where many traders have become top public figures, with some individuals showcasing extremely exaggerated unrealized gains and losses on public interfaces, attracting attention and generating returns that even surpass traditional top professional athletes. Is the explosion of social trading a short-term speculative frenzy, or a paradigm shift in the native experience of on-chain finance?

Ryan: From a fundamental logic perspective, whether it’s Hyperliquid, Pump, or Solana, they all point to the same fundamental proposition: free trading that operates around the clock, has no barriers to entry, and possesses global liquidity is currently the most irreplaceable killer application of blockchain technology. Once tools are provided for anyone globally to issue and trade assets with low friction, along with the evolution of speculative cycles, it will inevitably give rise to large-scale financial gaming scenarios. Speculation is the endogenous spirit of the times in the history of financial development and will not disappear with the end of cycles.

In the past, social trading was often fragmented: users discussed market trends and trading strategies on traditional social platforms, relying on third-party screenshots to prove performance, and then executed copy trading through complex cross-platform operations. The core paradigm innovation today lies in the fact that the entire experience has been highly integrated into a unified native closed loop on-chain. Based on an immutable and fully transparent distributed ledger, the historical gains and losses, position changes, and entry points of any account are cryptographically verified; at the same time, smart contracts can support copy trading instructions to be executed precisely in atomic transactions at the same moment. This transparency and verifiability, along with real-time clearing capabilities, are institutional advantages that traditional centralized platforms cannot replicate.

Although there have been myths of enormous wealth in past cycles, due to the lack of a unified identity aggregation protocol, on-chain excess returns often only manifest as a string of isolated anonymous hash addresses, failing to establish lasting social credibility. Now, the transparent on-chain ledger and the binding of persistent on-chain identities allow individuals who publicly display millions of dollars in gains and losses to become financial celebrities with strong dissemination attributes. This mechanism has attracted massive amounts of capital and attention into the ecosystem for liquidity matching and strategy following. Although speculation driven solely by low liquidity meme assets has cyclical and zero-sum characteristics, the product form of social trading has shown strong commercial extensibility.

Meme assets are an efficient wedge to attract public attention into the on-chain system. As infrastructure improves, the application scenarios of social trading are rapidly expanding from high-risk memes to mature perpetual contracts, tokenized equity assets, and even traditional financial derivatives. Under a unified transparent ledger framework, user groups are naturally differentiating and forming investment communities with different risk preferences, and the explosion of this vertical track is currently only in its initial stage.

On-Chain Creator Economy and Financial Entertainment: The Next Generation of Super Brands and Paradigm Shift

Host: This new form has systematically reconstructed the traditional on-chain speculative model. The past industry was filled with high-threshold paid communities and copy trading fraud, while now, real-time gains and losses verified on-chain directly replace hollow marketing rhetoric, becoming an objective proof of traders' credit ratings. Meanwhile, the introduction of creator incentive mechanisms and dynamic leaderboards has directly stimulated the entry desire of retail investors and market-making capital. Many users, after witnessing the publicly displayed capital inflation and transparent accumulation on-chain, have their emotions rapidly mobilized. However, ordinary investors often overlook the actual depth of the underlying liquidity pool and the slippage gap between high unrealized gains and losses. How do you assess the strategic role of creator incentives in reconstructing this ecological mechanism?

Ryan: The creator reward mechanism is essentially a compliance and modernization upgrade of the traditional paid community business model. In the traditional model, due to the lack of performance auditing mechanisms, it often devolves into fraudsters without real trading profitability selling anxiety to information-disadvantaged groups; whereas under the on-chain transparency mechanism, traders' earnings and reputations directly depend on the real effectiveness of their strategies and user conversion rates. Top traders used to worry that publicly sharing strategies would lead to a decline in alpha returns, but now on-chain protocols provide certainty of returns that even surpass their own position fluctuations by scaling back transaction fees and creator incentives to traders. For some leading platforms, the rewards distributed weekly to high-quality strategy creators amount to millions of dollars, with annual capital accumulation exceeding 100 million USD, allowing top strategy providers to achieve millions of dollars in income solely from creator shares.

This ecosystem is vigorously spilling over: in addition to the regular shares of token deployers, business collaborations inside and outside the platform, exclusive market-making support, and invitations to offline top-tier summits are pushing on-chain top traders to high positions of super personal brands. More importantly, this underlying logic can be reused across more diverse financial asset categories. Future on-chain experts will not be limited to leveraged traders but can also include senior credit analysts focused on fixed income protocols, strategy traders in prediction markets, or allocation experts focused on tokenized physical assets, with the product boundaries of on-chain finance infinitely extending.

In a highly interconnected digital world, "finance is content" has become an explicit trend. Even if many users do not engage in high-frequency leveraged speculation, they will still maintain daily login behaviors related to relevant terminals, as the real-time fluctuations of on-chain assets, publicly verified wealth reshuffling, and high-intensity long-short battles themselves constitute highly engaging entertainment content. This network form, which integrates transparent financial settlement with high-frequency interaction, possesses extremely high entertainment attributes and attention stickiness, and as more diverse asset categories are incorporated into the on-chain clearing system, the growth curve of this industry narrative has just begun to emerge.

Host: Indeed, the deep binding of on-chain performance and personal IP is reshaping the entire industry's employment forms and attention distribution rules. As core targets like HYPE continue to build a more solid bottom and challenge new highs in the secondary market, the development path of the entire track is becoming increasingly clear. Thank you, Ryan, for bringing us this in-depth analysis and wonderful insights today. We look forward to witnessing your explorations and breakthroughs in the upcoming cycle evolution.

Ryan: Thank you for the invitation. It’s a great honor to discuss these profound changes with everyone. See you next time.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.