/ Writing
/Hyperliquid (HYPE) Analysis & Valuation
Today, we publish our full analysis and valuation of Hyperliquid (HYPE). We’ve been tracking Hyperliquid since inception and have continued to be impressed by the team’s success and rate of growth. We initiated a large position early this year and have been accumulating since. HYPE today represents one of the largest positions in our liquid fund. We’ve long believed in Open Finance, the thesis that every unit of value should be interoperable, programmable, and composable on distributed ledgers.
Three years ago, we announced that Spencer Applebaum and Shayon Sengupta had been promoted to Investment Partner. At the time, we noted that both had already become core members of our investment team through their work sourcing and winning competitive deals, identifying new opportunities across the crypto ecosystem, and supporting our founders. 
For most of DeFi’s history, activity remained mostly self-referential and endogenous to the crypto ecosystem. People traded crypto for crypto, borrowed crypto using other crypto as collateral, and built derivatives based on crypto prices. Even the biggest onchain markets, like spot DEXs, lending platforms, and perpetuals, all focused on a small group of native tokens. This wasn’t a deliberate design, but rather a limitation because early DeFi could only use assets that were already onchain.
There are only two ways to onboard to crypto: you buy in or you earn in. A buyer explicitly swaps fiat/traditional assets into crypto assets or onto crypto rails. An earner gets paid for work, receiving cryptoassets. Over the past decade, people largely followed the first route. In the next decade, we believe that the majority will be through the second.
/Adverse Selection Rules Everything Around Me
Onchain liquidity has mostly evolved by focusing on one thing at a time. Early on, the main goal was simply to have a counterparty for takers without (a) having to post bids in a central limit order book (CLOB) on Ethereum (where that's not feasible), and (b) relying on an offchain matching engine (e.g., 0x). Uniswap’s big breakthrough in 2018 was making onchain liquidity open to everyone via automated market maker (AMM) liquidity pools.
/ACE Is The Place With The Helpful Value Capture
When Anatoly first pitched us Solana (originally called Loom), his deck was called “Blockchain at NASDAQ Speed.” Public blockchains have evolved a lot since then, but at their core, they’re still ledgers for the world’s financial assets. In traditional finance, trading is fragmented because assets are kept on separate systems. Stocks, options, futures, FX, commodities, payments, and credit each have their own ledgers and ways of clearing, holding, and settling.
/Multicoin Capital’s Investment Thesis
Multicoin Capital launched on October 1, 2017. We started the firm with the view that crypto would eventually reshape global markets. Our logo, a phoenix, represents a new financial system rising from the ashes of the old one. When we began, permissionless finance was hardly a known concept. Eight years later, it’s becoming a reality.
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When we look back in a not-so-distant future, I believe we’ll remember 2025 as one of the most consequential years in the history of crypto. The sheer number and magnitude of de-risking events this year have been truly unprecedented. From the passage of the historic GENIUS Act—arguably the most important piece of financial legislation since Dodd-Frank—to the definitive end of Chokepoint 2.0, this year has marked a decisive turning point.
Over the last two decades, fintech has changed how people access financial products, but not how money actually moves. Innovation focused on cleaner interfaces, smoother onboarding, and better distribution, while the core financial infrastructure remained largely unchanged. For most of this period, the stack was being resold, but not rebuilt.
/Ethena: Synthetic Dollars Challenge Stablecoin Duopoly
Today, we’re proud to announce that our liquid fund invested in ENA, the native token for Ethena Protocol, the issuer of USDe, the leading synthetic dollar. In our blogpost, The Endgame for Stablecoins, we stated how stablecoins are the largest addressable markets in crypto and how yield is the final frontier. While we were directionally right on yield-bearing stablecoins, we underestimated the market size for synthetic dollars.