Hyperliquid started out as a high-speed, app-specific DEX chain, while Sui developed infrastructure-first with Move and significant VC backing.
Hyperliquid emphasizes deflationary buyback-and-burn; Sui takes a classic L1 approach with validator rewards and a lockup mechanism for on-chain objects.
Hyperliquid’s grassroots culture formed around massive airdrops and on-chain trading contests; Sui’s top-down strategy uses grants, ambassadors, and enterprise partnerships.
Hyperliquid must evolve beyond a single DEX, and Sui must convert its tech prowess into robust user adoption, each proving that success in crypto can stem from very different models.
Two new L1 blockchains (Hyperliquid and Sui) have each surged to top-tier status through radically different paths. While they may both evoke “water” in their names, don’t let that fool you into thinking it’s all calm and serene. These two L1s are in the midst of a playful yet fierce contest for market cap glory. As of May 27, Hyperliquid’s FDV has climbed to $37B, edging out Sui’s $35B to claim the #11 spot while pushing Sui to #12.
Hyperliquid launched as an app-specific chain designed for a lightning-fast perpetual DEX, community-first and contrarian from the start. Sui, spun out from Meta’s Diem project, took an infrastructure-first approach: unveiling the Move language, recruiting developers, and securing funding from premier VCs. This memo dissects how these starkly different strategies propelled each chain’s ascent, reveals the core lessons for builders, and examines how their ecosystems continue to evolve.
Hyperliquid: Big Bang
Hyperliquid focused on creating a CEX-grade on-chain orderbook DEX that clears around 100,000 orders per second. Instead of courting VCs or major exchange listings, they stealth-built the product, then launched with a massive airdrop: 30% of HYPE tokens (worth about $1.2B) went straight to early users at TGE, and 70% of total supply was earmarked for ongoing user incentives.
This contrarian “free launch” spawned immediate buzz on CT, drew a wave of traders, and created a sense of community ownership. Hyperliquid doubled down on trader culture with public leaderboards, copy-trading vaults, and trading contests, turning high-speed trading into a meme-worthy spectator sport.
Sui: Slow Burn Marathon
Sui took a more traditional approach: backed by $336M in VC funding (A16z, Binance Labs, Coinbase Ventures, etc.), it rolled out testnets, ran hackathons, and launched mainnet in May 2023 with significant exchange listings. Its story hinged on the next-gen technology of Move and an object-centric blockchain model that claimed to fix fundamental throughput and security limitations.
Daily usage stayed modest initially, but Sui’s developer outreach, slow-burn ecosystem incentives, and strategic partnerships eventually led to 1M+ daily active users, a peak TVL of $2B, and $44.3B in cumulative volume by late 2024. Rather than a single killer app, Sui positioned itself as a general-purpose chain for everything from DeFi to gaming to NFTs, banking on the long-haul strategy that robust infrastructure would attract a variety of dApps.
Hyperliquid: Bottom-Up Energy for Traders & Degens
Hyperliquid’s user base emerged organically from its traders, many of whom profited handsomely from a $1.6B airdrop. By rejecting venture backing, Hyperliquid framed itself as a grassroots rebellion, fueling a win together ethos. Its official communications leaned into CT slang, referring to major traders as liquidity chads, for example. A swirl of memecoins ($PURR, $JEFF) also appeared on the chain as inside jokes, cultivating a fun-first community that actively evangelized on social media. Hyperliquid’s short marketing cycle (live product, big giveaway, immediate utility) reinforced loyalty.
Sui: Top-Down Community-Building
Sui’s community programs felt more structured and corporate: Ambassador initiatives, official developer grants, and well-publicized meetups. The Sui Foundation courted serious builders; less “wen airdrop?” and more “read the whitepaper.”
Though Sui also has an NFT and gaming culture, these campaigns were typically organized by community builders rather than the core team. Sui’s messaging emphasizes technology, safety, and enterprise readiness. Overall, the Sui vibe is more developer conference than crypto carnival.
Hyperliquid: User-Obsessed & Perfectionist HFT Traders
Hyperliquid was co-founded by Jeffrey Yan, a Harvard-trained mathematician who worked on high-frequency trading at Hudson River Trading. This Wall Street trader mindset guided the chain’s development: performance and usability were paramount; building a custom chain was a necessity when existing L1s fell short.
True to a trader ethos, Yan refused VC funding, focusing instead on user incentives. Hyperliquid operates with a lean, stealthy startup approach; small, fast-moving, contrarian, and hyper-focused on making on-chain trading as frictionless as a centralized exchange.
Sui: Long-Term Tech Visionaries
Sui emerged from Mysten Labs, founded by ex-Meta engineers who led the Diem project. With a deep tech pedigree (Evan Cheng, Sam Blackshear, et al.), the team took an R&D-driven approach, rewriting blockchain architecture to address speed, safety, and concurrency. They embraced big funding rounds to tackle a massive engineering challenge, focusing on building a platform capable of Web2-level performance.
Less concerned with short-term hype, Sui’s leaders saw themselves as system architects, forging a foundation that would eventually enable large-scale consumer adoption. While the industry demanded immediate traction, Mysten Labs stuck to publishing new consensus protocols (Narwhal, Bullshark, Mysticeti, etc.) and refining Move, trusting that a broad developer ecosystem would eventually attract mainstream use cases.
$HYPE: Hypersound Money
By consolidating activity on a single chain and channeling protocol fees through one token, they create multiple supply shock levers:
Fee Buybacks & Burns: A portion of spot & perp trading fees go to buying and burning $HYPE via the AF (Assistance Fund)
Listing Auctions & Fee Burn (HIP-1): Every 31 hours, a spot listing slot is auctioned in USDC which is then used to buy $HYPE and burned.
Launch Bond Requirements (HIP-3): Projects launching new perp markets on Hyperliquid must post 1M $HYPE as a bond (collateral) and participate in a Dutch auction, effectively removing tokens from circulation.
Validator Staking: Validators stake $HYPE, tying security directly to the token.
Gas Utility: Network fees on HyperEVM are paid in HYPE.
These mechanisms reduce supply while growing demand, reinforcing a deflationary narrative. Hyperliquid’s buyback-and-burn sidesteps regulatory and centralization concerns; burns benefit all holders proportionally, and no single group receives a specialized payout. It also sparks a follow-the-leader effect in the market, demonstrating to investors that there is always a reliable buyer.
$SUI: Fuel for the Network
Sui’s tokenomics follow a classical L1 design befitting its general-purpose goals:
Gas & PoS Security: SUI is used to pay transaction fees and secure the network via proof-of-stake, with validators and delegates earning rewards.
Storage Fund Mechanisms: A portion of fees goes into a storage fund, subsidizing long-term storage costs.
Fee Burning: Some fees may be burned to offset inflation (similar in spirit to Ethereum’s EIP-1559).
Unlike Hyperliquid, Sui doesn’t funnel protocol fees into direct token buybacks. Instead, revenue primarily supports network security and growth (e.g., validator incentives and ecosystem operations). Meanwhile, Sui’s on-chain data model does introduce a supply shock mechanism: whenever an object is created, users must lock up some SUI to cover storage costs, effectively removing those tokens from circulation for as long as the data remains on-chain. Hence as usage of Walrus grows, more tokens get locked, potentially creating a virtuous cycle that steadily reduces SUI supply.
Value Distribution
Sui allocated significant token shares to its team, investors, and a community reserve, providing resources for development, grants, and partnerships. While this ensures well-funded growth, it also means early insiders hold substantial influence over SUI distribution.
Hyperliquid, by contrast, reserved 70% of HYPE for users, with insiders holding a relatively small slice. This approach (an unabashedly populist token launch) yielded intense community loyalty. Skeptics note that insiders might have indirectly claimed tokens (e.g., via heavy trading), yet the optics remain far more community-friendly than typical VC allocations. Culturally, it resonates with the project’s “for users, not funds” motto.
Ultimately, Hyperliquid treats its token almost like equity with aggressive buybacks and broad ownership, whereas Sui treats its token as the network’s utility engine, with fee revenue fueling security and future development. One focuses on a hyper-deflationary store of value, the other on platform sustainability and growth.
Hyperliquid: EVM Pragmatism with a Twist
Hyperliquid built a bespoke chain optimized for high-performance trading. Yet rather than introduce a new language, it stayed EVM-compatible (HyperEVM) for ease of adoption. Developers can deploy Solidity/Vyper contracts with minimal re-tooling while tapping into Hyperliquid’s sub-second finality and +20k TPS. This approach grants the chain the familiar EVM composability plus a specialized on-chain matching engine for perps.
Hyperliquid took a full-stack approach by shipping both the base layer and the core DEX (with features like copy-trading vaults), giving developers a ready user base and shared liquidity. While it’s still a smaller ecosystem than Ethereum or BNB Chain, the barrier to entry is low for any Solidity dev seeking a high-speed alternative.
Sui: Full-Stack Innovation
Sui broke away from the account-based paradigm entirely. In Move, assets become objects that can be manipulated independently, allowing parallel transaction execution. Paired with the Mysticeti V2 consensus, this architecture supports thousands of concurrent transactions. Sui also provides tools like Remora (horizontal scaling), Walrus (on-chain storage), and SEAL (privacy controls) to give developers capabilities beyond standard EVM chains.
Meanwhile, composability in Sui is strong: Move packages can call one another, and the object-based model can handle cross-contract interactions efficiently. While Move’s learning curve can be steep, it bakes in security via strict ownership rules, reducing typical exploit vectors. Sui also invests in user-friendly features (e.g. zkLogin, Slush) that preserve self-custody while streamlining onboarding; a notable contrast to many high-speed chains. This monolithic approach, coupled with programmable transaction blocks (PTBs), delivers robust on-chain composability that smaller-block L1s might struggle to replicate.
All told, Sui offers a more curated experience: if you commit to their novel stack, you get potentially major performance and safety benefits, plus a foundation heavily investing in your success. But it’s a pretty contrarian choice in a Solidity-dominated landscape. Sui must continue growing adoption to justify its departure from the EVM norm.
Hyperliquid: Killer App First
Hyperliquid began with a single flagship DEX that rapidly captured ~80% of decentralized perps trading volume. Now it’s bootstrapping a broader financial ecosystem. By sharing the chain’s deep liquidity and fee revenues, Hyperliquid hopes to attract complementary DeFi protocols like lending platforms, stablecoin issuers, and derivatives markets. Its road map is reminiscent of how Binance expanded from an exchange into a full suite of financial products, but Hyperliquid’s approach is open and community-driven.
This “product → platform” pivot is pragmatic: keep building in finance (the domain they know best), then expand outward. The risk is sustaining security and decentralization as more value flows in, but the chain’s momentum is strong. With each new app tapping the same liquidity pool, Hyperliquid could consolidate a robust on-chain financial hub.
Sui: Platform Play
Sui always aimed to be a general-purpose chain with a wide range of dApps. The Sui Foundation invests heavily in many verticals (DeFi, gaming, NFTs, social), hoping that at least one emerges as the next big thing. By late 2024, Sui’s ecosystem boasted multiple DEXes, lending platforms, and two dozen gaming projects, plus big-name partnerships. This approach encourages broad experimentation, though it means user growth can be uneven. To unify these verticals, Sui employs strategic programs, hackathons (like “Sui Overflow”), grants, and an ambassador network to keep builders and users engaged.
A key lever in Sui’s ecosystem-building has been launching tokens for core infrastructure projects (e.g. DeepBook, Walrus) and distributing them directly to active Sui community members. DeepBook (a chain-wide orderbook aggregator) airdropped its tokens to stakers, DeFi participants, and DEX users, without taking venture investment. Meanwhile, Walrus earmarked 10% of its token supply for loyal on-chain storage users. By rewarding long-term, repeat users with new ecosystem tokens, Sui draws them deeper into the network’s flywheel, ensuring that participants benefit from multiple projects across its ecosystem.
A standout vertical is gaming: Sui introduced the SuiPlay0X1 console to bring Web3 gaming to mainstream audiences, leaning on Move’s object model for complex in-game assets. Sui also courts institutional players by highlighting compliance-friendly features and major brand validators. This “build the city before the residents move in” strategy requires consistent funding and marketing. While no single app has broken out in the mainstream, the synergy of many medium-sized projects has steadily pushed daily active users past one million.
Hyperliquid and Sui illustrate that radically different L1 playbooks can both succeed. Hyperliquid went vertical, building a hyper-optimized unichain for trading, distributing handsome rewards directly to users, slashing supply through buybacks, and prioritizing performance and real-time composability. Sui played the patient, infrastructure-first game, rewriting how blockchains manage state, shipping new tech, and uniting a broad mix of devs, institutions, and brands.
Each faces unique challenges. Hyperliquid must expand beyond its flagship DEX if it’s to scale into a full-fledged financial empire rather than remain a single-product phenomenon. Sui needs to convert its technological advantages into enduring user adoption, ensuring it doesn’t become yet another ghost chain with brilliant R&D but limited user engagement.
Ironically, both are inching toward each other’s domain: Hyperliquid is adding more general DeFi offerings, while Sui is narrowing in on verticals like gaming and DeFi aggregator frameworks. In the end, these two water-themed blockchains, each cresting $30B+ valuations, prove that success in crypto can flow from multiple directions, be it community-driven speed or visionary infrastructure.
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