Hyperliquid rejects $1 billion in funding: Jeff Yan sticks to the no-investor principle

According to Colossus, when Hyperliquid’s founder Jeffrey Yan was less than a year into launching the project, he once received an investment intent based on a valuation of about $1 billion, with a scale of roughly $100 million. After careful consideration, he clearly refused. The core reason for the refusal was that Hyperliquid is an on-chain agreement that needs to remain neutral; bringing in outside equity capital would undermine its “neutral” positioning as an agreement.

Decision-Making Process: Refusing After Careful Consideration, and the Shocking Internal Reaction

During his engagement with investors, Jeff Yan consulted widely with multiple founders and venture capitalists, trying to clarify whether “external capital can enhance the agreement’s inherent value.” However, after all communications ended, he was never convinced. Ultimately, on Monday, he officially informed the team that he was rejecting the financing proposal.

This decision caused shock internally. Team members responsible for managing funds had carried out multiple preliminary preparations to push the financing forward and were caught off guard by the sudden refusal. A noteworthy background detail is that from the entire financing evaluation period to the final refusal, the project’s monthly operating expenses were always covered by Jeff Yan’s personal funds rather than relying on any external cash infusion—this detail made his decision seem even more resolute at the level of financial pressure.

Core Logic: The Agreement Neutrality Philosophy Reflected Through Bitcoin

Jeff Yan’s refusal is grounded in an underlying philosophy about the fundamental nature of decentralized agreements. He believes that Hyperliquid is not a traditional company, but an on-chain agreement whose long-term value depends on an unconditional “permissionless, neutral” positioning. Once outside equity capital is introduced, the agreement would become tied to the interests of particular investors, undermining users’ fundamental trust in the agreement’s neutrality.

He cited Bitcoin as an analogy: if Bitcoin had accepted venture capital in its early days, its “neutrality narrative” may have been permanently weakened—miners, holders, and users would no longer be able to be sure whether the agreement truly serves everyone, rather than serving the interests of early institutional investors. The same logic led him to choose to keep Hyperliquid operating under a structure with no outside shareholders.

Hyperliquid’s Four Core Operating Principles

On January 28, 2024, Jeff Yan publicly summarized Hyperliquid’s core operating principles on social media, which the industry viewed as the central declaration of its “extreme decentralization/decapitalization” direction:

No investors: The project does not bring in any outside equity capital; the founder supports some operating expenses with personal funds.

No paid market makers: Refuses to maintain liquidity through paid arrangements, preserving fairness in market structure.

No fees charged to the development team: The development team does not extract privileged fees from the agreement layer, ensuring there is no internal arbitrage space in token economics.

No internal privileged participants: Eliminates any internal structure where certain individuals have priority in token allocation or agreement access.

These four principles form Hyperliquid’s fundamental difference from the vast majority of competing DeFi projects, and they are also the core foundation for building differentiated user trust in the cryptocurrency market.

Frequently Asked Questions

After Hyperliquid Refused Financing, How Did It Maintain Operations?

Before and after the evaluation period for refusing a financing round with a $1 billion valuation, the project’s monthly operating expenses were covered entirely by the founder, Jeff Yan, using his personal funds. This “self-sustaining” funding model, while carrying higher financial pressure in the short term, ensures that the agreement has no obligations to any external shareholders in terms of design and governance.

Why Would Bringing in External Investors Undermine Hyperliquid’s Agreement Neutrality?

Jeff Yan believes the long-term value of an on-chain agreement depends on unconditional neutrality—every user should be confident that the agreement design is not meant to serve any specific interest group. Once outside equity capital enters, investors’ interest demands may influence the direction of agreement design and governance decisions, fundamentally shaking users’ trust in the agreement’s neutrality.

What Precedents in the DeFi Industry Does Hyperliquid’s “No Investors” Route Offer?

This model is relatively rare in the DeFi industry. Most DeFi projects, in their early stages, bring in institutional investors through private rounds or strategic rounds. Hyperliquid relies entirely on the founder’s personal funds for operations; it is closer to Bitcoin’s early development model and is viewed by some in the industry as an extremely pure version of decentralized agreement design. It has also sparked widespread discussion about whether an agreement should accept venture capital.