Ryan Watkin, co-founder of Syncracy Capital, said Hyperliquid’s recent momentum should be viewed as part of a much larger shift rather than a standalone price event, arguing that the platform is moving from an onchain perpetuals venue toward what he described as a market for trading almost anything on a permissionless financial rail.
Speaking on The Rollup, Watkin revisited Syncracy’s long-running position in HYPE and the way his investment thesis has changed as Hyperliquid added new pieces such as Stars, HIP-3, spot markets, portfolio margin and a developing compliance framework. The discussion also touched on Bitcoin, Zcash, creator incentives and the rise of social trading as a core onchain use case.
A Trump mention, a fast move in HYPE, and a regulatory overhang starting to lift
The host opened by recalling an early HYPE purchase and admitted he and Robbie did not fully capture the upside, even though they had followed the asset for more than two years and kept it as a core position through a period that included two 80% drawdowns. He said the position still generated significant alpha for the portfolio during the bear market.
The host then brought up Jeff’s HIP-3 Star proposal, describing it as a new primitive that could help bring Hyperliquid into the U.S. market, and asked Watkin where he was when Donald Trump publicly mentioned Hyperliquid.
Watkin said he was sitting in the same spot, on a call with co-founder Dan, when messages from the team started flooding in. They told him HYPE had surged to around $70. Just minutes earlier, he had seen it trading at roughly $59. The move looked almost vertical, and at first they did not know what had caused it. Soon after, they learned that Trump had referred to Hyperliquid during a televised press conference. Watkin called it a crazy moment.
He added that Hyperliquid had already deployed Stars-related features to public testnet back in July and August. In his view, the team only pushes core functionality to public testnet when it wants users to start experimenting and preparing for launch. Based on the firm’s data work, Watkin said Hyperliquid typically takes about three months to move a feature from public testnet to mainnet, with six months as the outer bound. That led them to expect the rollout was already taking shape.
What they did not anticipate, he said, was a public mention from a senior U.S. political figure. Still, he argued that the strategic groundwork had already been laid. For a long time, the central objection from many investors was straightforward: Hyperliquid’s data and growth looked strong, but what would happen if U.S. regulators limited access? Watkin said that question is now starting to lose force. Because U.S. capital markets remain the largest and most important liquidity center in global finance, any path through that gate materially expands Hyperliquid’s ceiling.
The original thesis: a simple valuation case with very little float
Watkin said the early thesis was unusually clean. At launch, Hyperliquid was valued at about $3 billion while already producing roughly $200 million in annualized revenue, and the business was still growing quickly.
He pointed to the token distribution setup as a major part of the appeal. Outside of airdrop recipients, there was almost no circulating supply in the market. The only way to obtain the token was to bridge assets onto Hyperliquid itself. In his telling, that forced any fund or individual that wanted exposure to use the product directly, which helped the platform accumulate real users instead of purely speculative holders. He also noted that no institutions were sitting on pre-arranged, ultra-cheap allocations.
Against the broader crypto backdrop at the time, Watkin said Hyperliquid already ranked among the top four applications and chains by revenue. Several assets ahead of it did not appear to have durable fundamentals, in his view. That left room for substantial re-rating, to the point where he believed the asset could rise three to five times and still remain undervalued.
From onchain perpetuals to a permissionless venue for global asset trading
Watkin said Syncracy had long been working through a bigger macro idea: a permissionless public blockchain can become the place where any asset is traded globally, with derivatives serving as the most important long-duration category.
By early 2025, after deeper conversations with the core trading team and market-making firms, he said he reached a generational conviction in the position. The market, in his view, had been making a category error by treating onchain perpetuals as a contest limited to Web3-native venues. The real target was much larger.
He framed the first stage as taking share from major centralized exchanges such as Coinbase, Bybit and BN. The endgame, he said, is to compete with incumbents like CME. That is why Syncracy’s key tracking metric has not been share against other onchain venues, but share relative to BN and Bybit. As that figure kept climbing and setting new highs, the growth thesis became more compelling.
Watkin said the platform’s broader architecture is now starting to come into view. With cross-margin portfolio systems, spot markets, HIP-3 and a compliance framework that includes regulated HIP-3 and HIP-4, Hyperliquid is moving toward a model in which users can post nearly any major asset as full collateral and trade nearly any financial instrument from anywhere in the world.
That, he argued, is a structural advantage unique to blockchain rails: global assets can be cleared on one shared, permissionless ledger. He stressed that this vision is still in its early stages. Even in perpetuals alone, onchain penetration relative to the full size of global CFDs or retail options remains below 1%, he said, yet the cash flow and protocol revenue already generated are substantial.
For that reason, Watkin said investors should not become fixated on one month of fees or short-term market swings if the protocol keeps compounding internally. He contrasted the current setup with an earlier phase of crypto, when much of the industry was dominated by cyclical speculation and capital churn that could evaporate as soon as broader macro assets sold off. Now, he said, the number of real traders settling onchain and the scale of onchain activity are both compounding year after year, and protocols are capturing more actual business income. He described that as one of the clearest long-term trends in finance.
The metrics he watches most closely
The host noted that before some of the latest developments, HYPE had traded around $40 and drew criticism from those focused on short-term fee pullbacks, while missing the fact that HIP-3’s share of total volume was steadily increasing. He asked Watkin what metric now best captures the system’s ability to compound over time.
Watkin rejected the idea that one number can explain the business. Instead, he laid out a broader operating dashboard:
- changes in market share against top institutions such as BN, Coinbase and Bybit;
- the platform’s penetration into total global CFD, futures and options volume;
- absolute growth in platform trading volume and compounded growth in net protocol income;
- net deposit flows and the growth curve of average onchain account equity.
As long as those underlying business indicators keep compounding, he said, short-term price volatility in the secondary market matters far less because the protocol’s intrinsic floor value keeps rising.
A barbell approach: cash-flow businesses on one side, stores of value on the other
The conversation then shifted to portfolio construction. The host described a barbell strategy that places high-conviction positions in cash-flow-producing onchain businesses with large total addressable markets and sustainable token economics on one side, and pure stores of value on the other. He said their core longs include Bitcoin, gold and HYPE, while they have largely excluded infrastructure projects without meaningful business moats and what he described as an oversupplied L1 and L2 middle layer.
Watkin said the strongest onchain businesses are reshaping the industry narrative because they function as profit engines. In traditional finance, he said, the point of deploying capital is to create actual profit, yet crypto spent years drifting away from that basic standard and leaning on hollow liquidity metrics and attention games to support valuations. With macro conditions changing, crypto assets are no longer the only outlet for excess global liquidity, which means every protocol has to justify why it should be owned.
He also made a distinction between revenue generation and immediate tokenholder distribution. Real revenue is one sign of healthy fundamentals, he said, but not the only valid one. Some businesses may retain cash flow and reinvest all of it into expansion rather than turning on tokenholder fees right away. He used Morpho as an example, saying its loan balances and real demand have shown steep, hockey-stick growth, while the founder has chosen to direct the created value back into expansion instead of enabling a fee switch.
Hyperliquid, by contrast, uses a fully transparent onchain smart-contract system to carry out programmatic buybacks and burns, a mechanism Watkin compared to Ethereum-style deflationary settlement. The common test, he said, is whether the system keeps creating positive economic value. As fundamentals diverge more sharply, capital selection becomes clearer, and the market should narrow around a smaller set of businesses that are actually working.
Bitcoin, Zcash and the brutal economics of store-of-value markets
Asked how he thinks about the store-of-value side of the barbell, Watkin said those markets tend to be brutally concentrated. In his view, the pattern is either winner-take-all or something very close to it.
He pointed to the long history of money and precious metals, where gold captured the overwhelming majority of value across a market measured in the tens of trillions of dollars, leaving silver and other secondary metals far behind. In a fully global, permissionless blockchain market, he said, that power-law dynamic is likely to be even stronger. Over time, only one or two assets usually emerge as true beacons that can survive across cycles.
For Watkin, Bitcoin has already secured the central role through its first-mover advantage, its fixed hard cap of 21 million coins and its global liquidity network. If another asset were ever to compete in a meaningful adjacent role, he said, it would be less likely to come from a single-purpose fork that imitates old monetary traits and more likely to come from the native asset of a top smart-contract network that supports large-scale economic activity, deep liquidity and heavy collateral demand.
He said a viable store of value needs a massive holder base, deep liquidation liquidity and broad collateral acceptability. Those traits usually emerge only in the largest smart-contract ecosystems.
On Zcash specifically, Watkin said the cypherpunk roots of the project were strongly idealistic, but that idealism has been pushed to the margins over multiple market cycles. Some market participants are now trying to reframe Zcash as an institutional-grade “private Bitcoin,” he said, but onchain behavior does not show much capital using it as a high-frequency privacy currency or a day-to-day unit of value.
Privacy, in his view, is better understood as a functional module that can be added through upgrades in a general-purpose smart-contract stack. Without overwhelming liquidity depth, the market has little need for a second Bitcoin with overlapping functionality. Once monetary network effects settle at the top, he said, they reinforce themselves in a nonlinear way.
Why social trading may be a native blockchain product, not a passing phase
The host brought up Watkin’s recent essay on social trading, where he described the current onchain market as something like the world’s largest MMORPG. Traders are becoming public figures, and some individuals now display unrealized profit and loss on public interfaces at a scale that can rival or exceed elite traditional athletes. The question was whether this is a temporary speculative burst or a genuine product shift.
Watkin argued it is closer to the latter. Whether the venue is Hyperliquid, Pump or Solana, he said, the same basic principle is at work: 24/7, globally liquid and low-friction trading is still blockchain’s clearest killer application. Once anyone can issue and trade assets with relatively little friction, large-scale financial competition follows almost automatically. Speculation is not an anomaly in financial history, he said. It is part of the system.
What has changed is the product architecture. In earlier cycles, social trading was fragmented. Users discussed setups on conventional social platforms, posted screenshots as proof of performance and then tried to mirror trades through cumbersome cross-platform steps. Now the experience is collapsing into a native onchain loop. Because the ledger is transparent and tamper-resistant, a trader’s historical P&L, position changes and entry points can all be verified cryptographically. Smart contracts can then allow copy-trading instructions to execute atomically at the same moment. Watkin said that combination of verifiability and real-time settlement is something centralized systems cannot replicate.
He added that previous cycles also produced spectacular wealth stories, but they often remained attached to isolated anonymous addresses rather than persistent public identities. With transparent ledgers now linked to durable onchain identities, individuals who show publicly verifiable gains in the tens of millions of dollars can become financial celebrities in their own right. That draws more capital and attention into the ecosystem, helping liquidity formation and strategy following.
Watkin did acknowledge that speculation built purely around low-liquidity meme assets is cyclical and often zero-sum. But he said social trading as a product category has much broader commercial potential. Meme assets may serve as the wedge that brings mass attention onchain, yet the same model can expand into mature perpetual markets, tokenized equity-like assets and even traditional financial derivatives. Under a shared transparent ledger, user groups naturally sort themselves by risk appetite, and he said that vertical is still at a very early stage.
Creator incentives, onchain identity and finance as content
The host said the new model is also overhauling older forms of onchain speculation. In the past, paid groups and copy-trading scams were common, while today publicly verifiable onchain P&L can replace empty marketing and act as a real record of trader credibility. He asked Watkin how creator incentives fit into this system, especially given that many users may overlook the slippage gap between eye-catching unrealized gains and the true depth of the underlying liquidity pool.
Watkin said creator rewards are essentially a compliant, modernized version of the old paid-community business model. The old setup lacked any serious performance audit and often turned into a system where people without real trading skill sold fear and hope to less informed users. Onchain transparency changes that because trader income and reputation become tied much more directly to actual strategy performance and user conversion.
In the past, he said, top traders often hesitated to disclose strategy because they feared losing alpha. Now protocols can route trading fees and creator rewards back to them at scale, creating a stream of income that may be more predictable than returns from their own positions. Watkin said some leading platforms are already paying millions of dollars each week to high-quality strategy creators, with annualized capital accumulation above $100 million. In practical terms, that means some top strategy providers can make several million dollars a year from creator revenue share alone.
He said the model is already spilling outward. Alongside standard revenue share for token deployers, leading traders are now attracting business partnerships, dedicated market-making support and invitations to major in-person events, all of which push them closer to super-brand status. More important, Watkin said, the same structure can extend well beyond leveraged trading. Future onchain experts could include fixed-income protocol analysts, prediction-market operators and specialists focused on allocation across tokenized real-world assets.
Watkin closed by saying that in an intensely connected digital world, “finance as content” is becoming increasingly visible. Many users may never trade high-frequency leverage themselves, but they still return to these terminals every day because live price moves, publicly verifiable wealth shifts and constant long-short competition are compelling forms of entertainment. As more asset classes move into onchain settlement systems, he said, that growth curve is only starting to appear.
The host ended the interview by saying that the tightening link between onchain performance and personal brand is changing how attention and credibility are distributed across crypto. With HYPE and other core assets building stronger bases in the secondary market while pressing to new highs, he said the direction of the sector is becoming easier to read. Watkin thanked the show for the invitation and said he was glad to discuss the deeper structural changes taking shape.