Looking Back: From Prediction Markets to Hyperliquid
Jeff Yan, the founder of the decentralized perpetual exchange Hyperliquid, openly reflected on his early entrepreneurial struggles during a recent interview on When Shift Happens. While Hyperliquid is now a major player in DeFi derivatives, Yan admitted his path was not smooth — his 2018 prediction market project ultimately failed.
Yan recalled launching alongside competitors like Kalshi, aiming to build a blockchain-based prediction market. The project adopted an infrastructure approach of “off-chain matching, on-chain settlement,” which in hindsight was sound. However, the core challenge was achieving product-market fit.
Bear Market Blues: Waning User Interest
As the crypto market transitioned from a bull to a bear phase in 2018-2019, user interest in on-chain products dropped sharply. “We had a solid infrastructure, but no one wanted to play,” Yan said. He emphasized that the primary difficulty for prediction markets is sustaining user engagement, and once market sentiment turns pessimistic, nearly all on-chain applications struggle to retain users.
Despite the project’s failure, Yan described the experience as invaluable. “Those years taught me more than any success.” He noted that the ability to persist in building during a bear market and to truly understand user needs laid the foundation for creating Hyperliquid later.
Learning from Failure
In the interview, Yan expressed admiration for peers from that era. He mentioned that some of those early prediction market entrepreneurs persevered and are now pushing blockchain toward broader adoption. “Seeing their progress today makes me very happy. It proves that regardless of market cycles, truly valuable technology eventually surfaces.”
While not revealing specific plans for Hyperliquid, Yan hinted that the “user-first” philosophy gained from his earlier failure will guide upcoming product development. The Hyperliquid team has focused on optimizing the decentralized derivatives trading experience — reducing slippage and improving capital efficiency — insights directly derived from the lesson that technology must serve real demand.
Jeff Yan’s story serves as a reminder that in crypto, failure is often not the end but a deeper starting point. As he put it, “If that 2018 prediction market had succeeded, I might not have felt the urge to create Hyperliquid. Some detours are necessary.”