Logan Jastremski: Solana vs Hyperliquid - Who Wins The Global Exchange Race?

“But it was a chart from essentially the time from an application to get to 100 million or revenue. Zero to 100 million and how many days it took. And a lot of those companies are now currently being built on Solana. And this is not just like crypto companies, this is across AI as well. The fastest zero to 100 million dollar revenue companies in the world are crypto companies. Hyperliquid was number one. I think it was 89 days for them to get to 100 million in revenue.”

“I'm actually, today, I'm pretty bearish decentralization. More so in the sense that I think we, going back, we ran all these experiments and they were fine. But I don't think people necessarily pay for decentralization. I think if people valued Ethereum, like, say, Solana had a thousand nodes and Ethereum had 10,000. Like, if people really value that, they would pay 10x the amount of costs, in my mind. I think people care about decentralization only if it makes a better product.”

“So let's use the kind of like centralized exchange example. If you're in Russia and the server for the exchange is located in New York, why would I, as a Russian person, want to trade on a server that's located many miles away from me if I'm running a quant shop? Yeah, like it's purely a latency, like physics perspective. You're disadvantaged if it's not in your home jurisdiction. If these things actually scale to where you're doing trillions of dollars a day, and this is the everything exchange, I just have a hard time seeing the United States, China, whoever, like big global powers that actually trade a lot saying, yes, I'm okay with that data center being in Japan.”

“And the most basic terms is you can have leaders in various jurisdictions around the world where you can cut down on the time to inclusion. And so, for example, instead of having someone always has kind of an information advantage, you can disadvantage everybody to call it 20 milliseconds. And so what happens is you run parallel auctions. You aggregate kind of all these transactions around the world. But if you have these world leaders and call it Japan, United States, Hong Kong, Russia, UK, wherever, the thought process is you have these 20 millisecond batches that are happening simultaneously and continuously.”

“Hyperliquid has built a great product. They deserve all the praise in the world for doing that. They're making a lot of money. But it is a different engineering designed to build this global exchange. I think purely from a fairness, so to speak, I don't think the world and its limit will say, Hyperliquid is this global exchange that I feel like as a US person or anybody kind of outside of that market, will trade on. It's a regional exchange, which is a great regional exchange and very profitable and people love the product.”

“And now within the last, call it, six months to a year, we have the proprietary AMMs, which are very unique. And these are actually allow you to update the entire pricing curve with one Oracle update. And so what has happened is these proprietary AMMs are really, I would say, the blockchain native design for order books. The quotes were sale on chain, and you say, hey, oh shit, the price moved, I need to update my price. And they couldn't update the price fast enough, and so someone would pick them off.”

“Like the popular platforms today, like Drift on Solana, to no fault of their own, it was just Solana, I don't think in my mind, was as performant as they needed to actually compete with something that was centralized, like a hyperliquid that was co-located from a data center standpoint. That gave them enough of an edge to actually win the perps, where Solana, because of the decentralized aspect, was not performant enough yet to actually build the perps product. They've done well on spot, but they have not done well on perps.”

“I think for the record, Grok is underappreciated. It's mostly just like what we've seen with GPUs, is that you throw more compute at it, and the algorithms are generally getting better, that the combination of better algorithms and more compute makes better models. I think Elon is the best set world in moving the atoms around and building things in the real world the quickest. I think he built the first Memphis data center in like 20 days. It was 100,000 interconnected GPUs, the world's largest data cluster, and now he's going to build, I think, a million.”

“The robots are actually worrying me. Because you have, in a lot of sense, I mean, you essentially get automation. And like, when you think about the jobs that a lot of people do today, like Uber Eats or just Uber Drivers, like, that has, like, the gig economy, so to speak, has become very popular. And if you remove, like, the Uber or, like, Lyft or whatever, and they're just all completely autonomous cars, and then you think about how many, like, things that humans do, from, like, baristas to, like, restocking shelves to construction. The amount of things that humans can do and that robots can probably do better, that actually, like, kind of freaks me out a little bit.”

“When I meet non-crypto people and I tell them we've been our lives, or America has been yours in 1776, we printed 80 percent of the dollars the last five years, they're like, that's just not true. And I'm like, no, no, that's true. Especially after COVID and 2020 and 2021, where they printed so much money, is that if you look on Zillow and house prices, they've essentially 2X. So unless you made 2X your net worth or 2X your salary in five years, that most likely asset that you want to buy has doubled in value.”