Wall Street wealth creation model is unsustainable for most participants: Hyperliquid CEO

The Gatekeeper Problem

Wall Street has a long history of building wealth behind closed doors. For decades, the model has been simple: the insiders get the first look, the venture capital firms get the early equity, and the public gets the remains. By the time a company reaches a public exchange, the massive multipliers have already been harvested by those who didn't need the money in the first place.

Jeff Yan, the CEO behind Hyperliquid, is pointing out what most of us in the building space have known for a long time. The current wealth creation model is not just unfair; it is mathematically unsustainable for the average participant. If you are only allowed to buy into an asset once it has been de-risked and inflated by institutional players, you aren't an investor. You are the exit liquidity.

The Illusion of Inclusion

We often hear about the democratization of finance through apps like Robinhood or E-Trade. But the interface isn't the problem. The plumbing is. Even with a slick mobile app, a retail user is still playing a game where the rules are written by market makers and clearinghouses. The friction of high fees, restricted access to private rounds, and the slow settlement of traditional assets creates a massive moat around the wealthy.

This is why decentralized finance (DeFi) actually matters. It isn't just about trading meme coins or chasing yield. It is about removing the velvet rope that Wall Street uses to keep people out. When Yan talks about perpetual contracts and decentralized order books, he is talking about a system where the code handles the trust, rather than a bank that charges you for the privilege of holding your own capital.

Why Perpetuals Are the Testing Ground

Perpetual contracts have become the centerpiece of this shift because they allow for sophisticated trading without the overhead of physical delivery or the limitations of traditional futures. For a builder, this is the ultimate stress test for a blockchain. If you can handle the high-frequency demands of a perpetual exchange, you can handle almost anything else in finance.

Hyperliquid is betting on the idea that users want a CEX-like experience—fast, responsive, and deep liquidity—without the centralized risk. We have seen what happens when centralized exchanges fail. The lack of transparency leads to catastrophic losses. A decentralized model ensures that the rules are public and the solvency is verifiable on-chain. This is a fundamental requirement for a sustainable financial system.

The Founder Perspective: Building for the Long Haul

If you are building in the crypto space right now, you have to decide which side of the fence you are on. Are you building another tool that mimics the extractive nature of Wall Street, or are you building something that actually shifts the power dynamic? The temptation to cater to big institutional money is always there. It’s easier to get funding when you promise to play by their rules.

However, the real longevity in this industry comes from community-driven liquidity. When you look at platforms that survive the bear markets, they are the ones that provide actual utility to the end user. They aren't just wrappers for traditional finance products. They are new primitives that allow for price discovery and risk management in a way that doesn't require a broker's permission.

• Access: Anyone with a wallet should be able to participate.
• Transparency: The order book and settlement must be verifiable.
• Efficiency: If it isn't faster and cheaper than the old way, it won't win.

The Sustainability Gap

Yan’s critique of the current system focuses on sustainability. When the majority of participants feel like the system is rigged against them, they eventually stop playing. We saw this in the 2008 crash, and we are seeing it now with the growing skepticism toward traditional equities among younger generations. People are tired of being the last ones invited to the party.

Crypto was supposed to fix this, but we often get distracted by the same cycles of hype and insider dumping. The challenge for Hyperliquid and similar protocols is to prove that a decentralized exchange can stay liquid and stable without turning into another walled garden. It requires a relentless focus on the tech and a refusal to compromise on decentralization just to hit a quarterly target.

The goal isn't just to build a better exchange; it's to build a different incentive structure entirely.

What This Means for the Future of DeFi

We are moving into an era where the infrastructure is finally catching up to the vision. For years, DeFi was too slow and too expensive for anyone but whales. With the rise of high-performance chains and optimized order books, that excuse is disappearing. The gap between the user experience of a centralized exchange and a decentralized one is closing fast.

For builders, this is the time to focus on liquidity provision and user onboarding. If we want to replace the unsustainable Wall Street model, we have to offer a product that is objectively better. That means better execution, better security, and a fairer distribution of the value created by the network. It’s not enough to be decentralized; you have to be useful.

Final Thoughts for Builders

The takeaway here is simple: stop trying to be the next Goldman Sachs. The world doesn't need a more efficient version of a broken system. It needs a replacement. If you are developing a protocol, look at how you are distributing value. If the majority of that value is leaking out to intermediaries or early venture backers at the expense of the users, you are just rebuilding the old model with new branding.

Sustainability comes from alignment. When the builders, the liquidity providers, and the traders are all incentivized to maintain the health of the network, you have something that can actually challenge the status quo. Wall Street’s model is failing because it forgot who it was supposed to serve. Don't make the same mistake.

Read the original at Cointelegraph →