Syncracy Capital Co-Founder: HYPE Surge Is Just the Start, the Era of On-Chain 'Everything Trading' Has Arrived

From on-chain hegemon to everything trading platform, Trump's public mention drove the price surge, and social trading and compounding growth are reshaping the on-chain financial landscape.

Podcast: The Rollup

Compiled by: Plain Blockchain

Guest: Ryan Watkin, Co-Founder of Syncracy Capital

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

Ryan: Sure, the sound is completely normal now.

Host: Okay, the equipment is set. Before we begin, I looked back at when Robbie and I first bought HYPE, and reflected that we didn't fully maximize that move. At the time, experiencing two 80% drawdowns on an asset facing regulatory headwinds was indeed frightening. But we've tracked this asset for over two years, and it has always been a core pillar of our portfolio. Fortunately, the portfolio achieved significant outperformance during the bear market, and we kept complete records of our position building. You turned the whole situation around. As a close friend of Chris Berniske and a steadfast HYPE super bull, we're very eager to hear your views. Recently, Jeff released the HIP-3 Star proposal, a new primitive to push Hyperliquid into the US market. Where were you when Trump publicly mentioned Hyperliquid? 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 flood of messages from the team telling me that HYPE's price had surged to around $70. A few minutes earlier, I had seen it around $59, and then the price shot up vertically. We initially had no idea why, and then learned that Trump directly mentioned Hyperliquid at a live televised press conference. It was truly a crazy moment.

In fact, as early as July and August, Hyperliquid first deployed Stars-related features on the public testnet. The team only pushes core features to the public testnet when they want the public to start experimenting and preparing. Data analysis shows that Hyperliquid takes about three months on average from public testnet to mainnet, and no more than six months at most, so we anticipated this progress was brewing and about to land. Although we never expected senior political figures to publicly mention the project, the team was strategically well-prepared. In the past, many investors' core doubt about Hyperliquid was: "The data and growth are indeed excellent, but what if US regulation takes restrictive measures?" Now this biggest obstacle is being gradually removed. The US capital market is the world's largest and most important financial liquidity center, and breaking through this barrier opens an extremely high growth ceiling for Hyperliquid.

From On-Chain Hegemon to 'Everything Trading Platform': Reshaping the Core Investment Thesis and Iterating Metrics

Host: Excellent investors dynamically revise assumptions based on the latest information. Can you review the core logic when you first established your position, and how your investment thesis and future outlook have evolved given the latest developments?

Ryan: In the early days of the project, the investment thesis was relatively pure and intuitive. At that time, its valuation was about $3 billion, annualized revenue had reached about $200 million, and the business maintained an extremely high growth slope. Apart from airdrop recipients, there was almost no circulating supply in the market; the only way to obtain tokens was to bridge assets to Hyperliquid itself. This mechanism was strategically brilliant: any fund or individual wanting to build a position had to personally use the trading platform, directly creating real users for the platform, and no institution held pre-set cheap allocations. In the industry landscape at that time, it was already among the top four applications and public chains by revenue, and many of those ranked ahead lacked long-term fundamental support. At that stage, the asset had extremely high revaluation potential; even a three- to five-fold increase would still leave it undervalued.

At the same time, at the macro level, we had been reasoning about the core assumption of an "everything trading platform": enabling free trading of any global asset on a permissionless public chain network, with derivatives as the core long-term focus. In early 2025, through in-depth exchanges with the core trading team and market makers, I established a deep conviction for generational holding. The market has long had an inertial misconception: confining 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, first by seizing market share from top centralized exchanges like Coinbase, Bybit, and BN, and ultimately benchmarking against traditional financial giants like CME. The core data we monitor long-term is not its share relative to on-chain competitors, but its share relative to BN and Bybit. This metric has steadily climbed and repeatedly hit historical highs, establishing a powerful growth narrative.

Looking ahead, with the cross margin system, spot market, HIP-3, and compliance framework (regulated HIP-3 and HIP-4) successively in place, Hyperliquid's underlying vision is gradually materializing: the platform will evolve into the ultimate venue where users can use almost any mainstream asset as full collateral and trade any financial asset anywhere in the world. This is an institutional advantage unique to blockchain architecture, unifying global asset settlement on the same underlying permissionless ledger. We are still in the very early stages of realizing this grand vision. Even looking at perpetual contracts alone, their trading volume penetration in global contracts for difference (CFDs) or retail options is less than 1%, yet the cash flow and protocol revenue already generated are astonishing.

When a protocol has strong endogenous compounding ability, investors need not be troubled by short-term monthly data fluctuations, but should focus on the long-term structural landscape. In the past, the industry was filled with high-liquidity capital idling and cyclical speculation, quickly going to zero once macro assets pulled back. Now the industry is gradually entering an irreversible structural trajectory: the number of real traders and trading volume settled on-chain grows compoundly each year, and the actual business revenue captured by underlying protocols continues to expand. This is one of the most certain long-term main lines in today's financial markets.

Host: We fully agree with the view of shedding cyclical anxiety and excessive focus on monthly revenue fluctuations. Before the key news landed, when HYPE was oscillating around $40, some market voices doubted due to short-term fee pullbacks, but ignored the deep fact that HIP-3's share of overall trading volume was steadily climbing. You initially focused on its market share relative to centralized exchanges, and later shifted to penetration into traditional derivatives markets. Standing at the present, what is the core metric you value most and that best represents the system's sustained compounding?

Ryan: Evaluating this system cannot rely on a single metric; it requires building a comprehensive matrix of indicators: first, market share changes relative to top institutions like BN, Coinbase, and Bybit; second, the platform's penetration ratio of global CFD, futures, and options trading volume; third, the absolute growth rate of platform trading volume and the compound growth rate of net protocol revenue; fourth, net funding flows and the growth curve of average on-chain account net assets. As long as these underlying operating metrics continue to compound, short-term secondary market price fluctuations are nothing to fear, because the intrinsic value floor of the system is being irreversibly raised.

The Barbell Strategy Choice: Winner-Take-All for Real Revenue Cash Flow and Store-of-Value Assets

Host: We also adopted a barbell approach when building our asset allocation: one end heavily weighted in on-chain businesses with strong commercial self-sustaining ability, vast long-term total addressable market (TAM), and sustainable token economics; the other end allocated purely to store-of-value assets. Our core positions include Bitcoin, gold, and HYPE long positions, gradually expanding toward applications generating real cash flow, while excluding infrastructure lacking commercial moats and excess L1/L2 middle layers from the portfolio. How do you view this cash-flow-based allocation framework, similar to a traditional equity investment perspective? Additionally, what are your thoughts on privacy assets like Zcash returning to the store-of-value discussion?

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

It should be clear that generating real revenue is only one manifestation of healthy fundamentals. Some businesses choose to retain generated cash flow and fully invest it in ecosystem expansion rather than immediately distributing it to token holders, which is also a reasonable capital allocation approach. For example, Morpho's lending balance and real demand continue to show hockey-stick-like steep growth, and its founder chose to fully invest the generated value into protocol expansion rather than turning on the fee switch, which is highly rational during high-speed development. Mechanisms like Hyperliquid, on the other hand, programmatically 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 is continuously creating positive total economic value. This fundamental differentiation greatly enhances the clarity of asset screening. When market capital gradually converges on a few truly well-functioning businesses, the entire investment logic becomes very clear.

Host: As the market matures, the entrepreneurial environment is more brutal than before. In the past, founders could raise capital based on narrative even without underlying business support, but now institutions and the secondary market conduct horizontal comparisons with extremely stringent benchmarks: facing efficient business paradigms like Hyperliquid, Lighter, Pump, or Morpho, mediocre competitors find it hard to gain attention and capital allocation. This makes asset screening somewhat clearer, but also forces startup teams to compete head-on in extremely hardcore fundamental dimensions.

So on the other side of the barbell strategy, for store-of-value assets like Bitcoin and Zcash, which lack operating revenue and cash flow models and rely more on reflexivity and consensus mechanisms, how do you assess the evolution path of this sector?

Ryan: In the pure store-of-value market, the underlying competitive law is extremely brutal "winner-take-all" or "absolute monopoly by the leader." Looking at thousands of years of human monetary and precious metal evolution, gold occupies the vast majority of the tens of trillions of dollars in market value, while secondary metals like silver are left far behind, and subsequent tiers almost completely lose monetary premium. As a fully globalized, permissionless open competitive market, blockchain will only manifest this power law more thoroughly. Ultimately, there are usually only one or two beacons of store-of-value assets that can cross cycles.

Bitcoin, with its impeccable first-mover advantage, deterministic 21 million hard cap, and global liquidity network, has indisputably established its core position. If we were to nominate potential synergistic competitors, the most qualified are not single-function fork coins replicating traditional monetary attributes, but the native assets of core underlying public chains that carry the largest scale of real economic activity, highest liquidity depth, and collateral demand. As a store-of-value asset, its core necessary condition is to have an extremely large holder base, extremely abundant settlement depth, and global collateral universality, which can often only be nurtured by top-tier smart contract networks.

The cypherpunks who initially built Zcash were highly idealistic, but through several industry cycles, the pure geek vision has been somewhat marginalized. Currently, some market forces are trying to repackage it as an institutional-grade "privacy Bitcoin" narrative, but from actual on-chain behavior, very little capital truly settles it as a high-frequency privacy currency or daily unit of account. Privacy is technically a functional module that can be fully implemented through upgrades in the tech stack of general-purpose smart contract public chains; and without absolute liquidity depth, the market does not need a second Bitcoin with overlapping functional positioning. The monetary system itself has strong network effects; once network effects settle at the top, they self-reinforce in a nonlinear manner.

Transparent Ledger and Social Trading: Reshaping the Global On-Chain Financial MMORPG

Host: In your recent long article on the evolution of social trading, you compared the current on-chain trading ecosystem to "the world's largest MMORPG game." Currently, many traders have become top public figures, with some individuals displaying extremely exaggerated unrealized profits and losses on public interfaces, attracting more attention and generating more revenue than traditional top professional athletes. Is the explosion of social trading a short-term speculative frenzy, or a paradigm shift in the native on-chain financial experience?

Ryan: From the underlying logic, whether it's Hyperliquid, Pump, or Solana, the core points to the same fundamental proposition: 24/7, barrier-free, globally liquid free trading is the most irreplaceable killer application of blockchain technology to date. Once you give anyone in the world tools to issue and trade assets with low friction, as speculative cycles evolve, large-scale financial gaming scenarios will inevitably emerge. Speculation is an endogenous zeitgeist in financial history and will not disappear with the end of cycles.

Past social trading was often fragmented: users discussed market conditions and trading strategies on traditional social platforms, relied on third-party screenshots to prove performance, and then executed copy trading through complex cross-platform operations. The current core paradigm innovation is that the entire experience is highly integrated on-chain into a unified native closed loop. Based on an immutable and fully transparent distributed ledger, any account's historical profits and losses, position changes, and entry points are cryptographically verified; at the same time, smart contracts can support copy trading instructions executed precisely as atomic transactions at the same moment. This transparent verifiability and real-time settlement capability is an institutional advantage that traditional centralized platforms cannot replicate.

In previous cycles, although there were huge wealth myths, due to the lack of a unified identity aggregation protocol, on-chain excess returns usually only appeared as a string of isolated anonymous hash addresses, unable to establish long-term social reputation. Now, the transparent on-chain ledger and persistent on-chain identity binding enable individuals publicly displaying tens of millions of dollars in profits and losses to become financial celebrities with strong viral attributes. This mechanism attracts massive capital and attention into the ecosystem for liquidity matching and strategy following. Although speculation driven purely by low-liquidity meme assets is cyclical and zero-sum, the product form of social trading demonstrates extremely 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 equities, and even traditional financial derivatives. Under the unified transparent ledger architecture, user groups are naturally differentiating and forming investment communities with different risk preferences. The explosion of this vertical track is only in its initial stage.

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

Host: This new form has systematically restructured the traditional on-chain speculation model. In the past, the industry was filled with high-barrier paid communities and copy trading fraud, but now on-chain verified real-time profits and losses directly replace empty marketing rhetoric, becoming objective credentials for trader credit ratings. At the same time, the introduction of creator incentives and dynamic leaderboards directly stimulates the entry desire of retail investors and market-making capital. Many users, after witnessing the capital expansion and transparent settlement publicly displayed on-chain, have their emotions quickly mobilized. But ordinary investors often overlook the actual depth of underlying liquidity pools and the slippage gap between high unrealized profits and losses. How do you assess the strategic role of creator incentives in restructuring this ecosystem mechanism?

Ryan: Creator reward mechanisms are essentially a compliant and modernized upgrade of the traditional paid community business model. In the traditional model, due to the lack of performance audit mechanisms, it often evolved into fraudsters without real trading profitability selling anxiety to information-disadvantaged groups; while under the on-chain transparent mechanism, a trader's income and reputation directly depend on their real strategy effectiveness and user conversion rate. Top traders in the past often worried that publicizing strategies would lead to alpha decay, but now on-chain protocols provide traders with deterministic income that even exceeds their own position fluctuations by feeding back trading fees and creator incentives at scale. Taking some leading platforms as an example, they distribute millions of dollars in weekly rewards to high-quality strategy creators, with annualized capital locked exceeding $100 million, enabling top strategy providers to earn millions of dollars annually from creator shares alone.

This ecosystem is spilling outward violently: in addition to regular dividends for token deployers, business collaborations inside and outside the platform, exclusive market-making support, and invitations to offline top summits are pushing on-chain top traders to the heights of super personal brands. More importantly, this underlying logic can be fully replicated in more diverse financial asset classes. Future on-chain experts are not limited to leveraged traders; they can also be senior credit analysts focused on fixed-income protocols, strategy operators in prediction markets, or allocation experts focused on tokenized real-world assets. The product boundaries of on-chain finance are expanding infinitely.

In a highly interconnected digital world, "finance as content" has become a prominent trend. Even if a large number of users do not engage in high-frequency leveraged games, they still maintain daily logins to relevant terminals, because real-time fluctuating on-chain assets, publicly verified wealth reshuffles, and high-intensity long-short battles themselves constitute highly sticky entertainment content. This network form, integrating transparent financial settlement and high-frequency interaction, possesses both extremely high entertainment value and attention retention. As richer asset classes are incorporated into the on-chain settlement system, the growth curve of this industry narrative is just beginning to emerge.

Host: Indeed, the deep binding of on-chain performance and personal brand is reshaping the entire industry's professional forms and attention allocation rules. As core assets like HYPE continue to build more solid bottoms in the secondary market and challenge new highs, the development path of the entire track becomes increasingly clear. Thank you, Ryan, for the in-depth analysis and wonderful insights today. We look forward to continuing to witness your exploration and breakthroughs in the coming cycle evolution.

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