Hyperliquid DEX Maintains Neutrality Amid Market Maker Controversy

Hyperliquid DEX Upholds Neutrality

The competition in the perpetual decentralized exchange (DEX) space remains intense. Hyperliquid, a prominent DEX, recently made headlines as its founder, Jeff Yan, announced a commitment to maintaining the platform's neutrality by excluding market makers. This move comes amid controversy surrounding Lighter DEX, which faced backlash for allegedly engaging with 'extractive' market makers, including Jump Trading and Hayden Davis.

In a public statement, Yan emphasized, "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." He further addressed criticism from users accustomed to preferential treatment, asserting that their principle of fairness might frustrate some stakeholders.

Understanding the Lighter DEX Controversy

The recent controversy around Lighter DEX arose after an analyst revealed that five undisclosed wallets received $26 million worth of Lighter (LIT) tokens in exchange for a $5 million liquidity provision. Additionally, Jump Trading and Kelsier Labs, led by Hayden Davis, were reported to have received substantial airdrops, sparking concerns over transparency. Tron founder Justin Sun also received rewards for early liquidity contributions, but these details were not promptly disclosed to the community.

Following these revelations, Web3 researcher ZachXBT criticized Lighter, stating sarcastically, "crime pays." Community members echoed these concerns, questioning the transparency of the airdrop process. In response, Lighter's team acknowledged prior arrangements with liquidity providers and market makers, yet skepticism persists.

Hyperliquid's Market Position

Despite Hyperliquid's emphasis on neutrality, its market share has declined significantly, dropping below 19% as competitors like Lighter gain traction. Hyperliquid's dominance peaked at 75% in May but has since stabilized between 19% and 20%.

On the price front, Hyperliquid's native token HYPE saw a 2% increase, trading at $24.8 following Yan's remarks. However, the token remains within a short-term price range of $23-$26, with potential for recovery if broader market sentiment improves.

Conclusion

• Hyperliquid stands firm on blocking market makers to maintain neutrality.
• Despite this stance, its market share has decreased from 75% to 19% amid rising competition.