Introduction to the Hyperliquid Policy Center
A new initiative has emerged in the capital, focused on shaping the regulatory landscape for decentralized finance (DeFi). On Wednesday, the Hyperliquid Policy Center (HPC) made its official entrance, aiming to serve as a guiding force for U.S. lawmakers concerning DeFi and derivatives such as perpetual futures.
Leadership and Vision
Jake Chervinsky, who serves as the founder and CEO, emphasized the potential of blockchain technology to form the foundation of modern finance. He urged the U.S. government to either create a supportive framework for this emerging technology or risk falling behind as other nations seize the lead. Chervinsky has a robust background in the DeFi space, having been the chief legal officer at Variant, a notable venture capital firm with investments in key DeFi platforms like Uniswap and Morpho. His previous experience also includes a role at the Blockchain Association, a nonprofit advocacy group in Washington, D.C.
Funding and Support
The Hyper Foundation, which backs Hyperliquid, has injected $1 million worth of its HYPE token—valued at about $29 million at the time of the announcement—into the center to help kickstart its activities. Notably, the value of HYPE has seen a significant increase of 22% over the past month, as reported by CoinGecko.
Evolution of Hyperliquid
Originally conceived as a decentralized exchange focused on perpetual futures three years ago, Hyperliquid has transformed from a niche player into a serious contender within the DeFi realm, now seeking to engage meaningfully in policy debates at the highest levels. Co-founder and CEO Jeff Yan highlighted that, until now, the decentralized nature of Hyperliquid meant it had no consolidated voice in critical regulatory discussions. He pointed out that the timing of the HPC’s launch aligns with key moments in legislative processes, such as a stalled market structure bill in the Senate that could redefine DeFi regulations.
Regulatory Challenges
Chervinsky has been vocal against proposals from Senate Democrats demanding that platforms providing access to DeFi protocols, known as front ends, must register with regulatory bodies and implement Know Your Customer (KYC) procedures. He contended that such measures could lead to the Treasury Department effectively banning DeFi projects, labeling the proposal as an “unconstitutional government takeover” that could drive U.S.-based DeFi developers overseas.
Focus on Perpetual Futures
Differentiating itself from established crypto advocacy organizations like the Blockchain Association and Coin Center, HPC focuses explicitly on enhancing decentralized market infrastructure, particularly around perpetual futures—an area where Hyperliquid has gained substantial traction. Perpetual futures differ from standard futures contracts as they do not have an expiration date, allowing traders to maintain their positions indefinitely through funding rates balancing between long and short positions.
Future Prospects
In recent months, Hyperliquid has not only recognized its role in trading digital assets, including meme coins, but has also expanded into tangible assets like gold and silver. The exchange received regulatory approval under former CFTC Chair Caroline Pham‘s oversight, enabling customers to engage in both spot trading and derivatives. Looking ahead, incoming CFTC Chair Michael Selig hinted at the possibility of integrating perpetual futures into traditional finance systems, promising to create a clear regulatory environment for such instruments—a sentiment echoed during his recent conversation on Bloomberg’s “Odd Lots” podcast.
Conclusion
As the landscape of DeFi continues to evolve, the actions and proposals put forth by the Hyperliquid Policy Center could play a critical role in shaping the future of financial regulations in the United States.
