Hyperliquid

Editor: Xiao Bing On X, "Zhufeng Lab" compiled a list of a16z Crypto projects that have shut down this year, showing an almost metronomic regularity: one failure per month, as if someone were scrupulously executing a calendar exit plan. January: Entropy; March: Yupp; April: Foundation; May: Syndicate; June: Orchid Protocol; July: Legend; August: Proof of Play; September: Linera. According to statistics, out of the 189 projects invested by a16z Crypto, 42 have already ceased operations or been sold. Examining the fundraising histories of these 42 projects, it's not a simple "natural elimination of early investments."

Yupp, Syndicate, and Entropy alone burned 87 million dollars. The recent fall of Linera in September is particularly ironic. This high-performance L1 project founded by former Meta engineers secured 12 million dollars led by a16z, and launched a community token sale just before the mainnet launch. 5 million dollars, they only collected 848,000 dollars. 617 people could not raise the sum. While a16z's portfolio thins out each month, the most dominant trading platform in the crypto sector is breaking historical records. Hyperliquid, a perpetual contracts DEX that refused all VC investments.

No seed round, no Series A, no strategic investors, no token distribution to advisors. The founder, Jeff Yan, financed the project's launch with his own funds and profits from his early trading operations. Put these two figures side by side: a16z invested 87 million dollars in Yupp, Syndicate, and Entropy, which fell to zero; Hyperliquid, without any external funding, boasts a valuation of 30 billion dollars. "Why are the endorsements of top VCs increasingly losing their effectiveness in the crypto sector? The reason is not a lack of intelligence from a16z's investment team, which has, after all, backed winners such as Coinbase, Solana, and Uniswap.

A traditional VC investing in a SaaS company typically has a 7 to 10-year window between the seed round and IPO. But the lifespan of crypto projects is extremely compressed: it can take only 18 months between fundraising and token issuance, and only 6 months for the market to then forget you. Linera survived a few years before its funds ran out on the eve of the mainnet launch. While the DAO narrative was strong when Syndicate raised funds in 2021, this entire sector contracted by 2026 to the point where it could no longer sustain a business. VCs seek an exit.

An exit means selling tokens at some point after they are listed. This creates a natural tension with the interests of retail investors: VCs have the strongest selling motive when the token price reaches its peak (generally during the first days of listing), while retail investors feel the strongest buying impulse at precisely the same time. When a project announces it is "led by a16z," it draws on the brand's trust credits. If 8 out of 42 projects fail consecutively in a single year, the trust credits of that entity depreciate rapidly. "Hyperliquid's success cannot be reduced to a simplistic "no VC = success."

The absence of VCs is a characteristic, but what makes it a sector leader are other factors. Upon its launch in 2023, Hyperliquid did very little marketing. No influencer (KOL) promotions, no suggestions of "future free token distribution," no whitepaper presentation. Its approach is simple: offer an on-chain derivatives platform providing a superior experience to centralized exchanges. Through a points system followed by a free HYPE token distribution, Hyperliquid transformed its early users into token holders. This means the initial distribution goes to those who use the product, not to those who write checks.

At the time of HYPE's listing, the majority of holders were genuine users motivated to continue using the platform (transaction volume supporting the token's value), rather than cashing out immediately. VC projects generally follow the order: narrative → fundraising → development → token issuance → user acquisition; Hyperliquid reverses the sequence by prioritizing the product first: development → users → revenue → token issuance → users are the holders. Necessary clarification: this article by no means pronounces the death sentence for the VC model in crypto.

a16z has backed winners such as Coinbase, Solana, and Uniswap. Its successes are enough to offset the losses related to these 42 failed projects, which explains why the VC model still manages to operate. But the crypto community has undergone a real cognitive shift: a VC endorsement is a signal, not a guarantee. In 2021, retail investors bought immediately upon seeing 'funded by a16z' or 'funded by Paradigm.' In 2026, they ask more questions: what is the vesting schedule? what proportion of tokens does the team hold? does the product have real users?

where do the revenues come from? This disillusionment is healthy. a16z will continue to invest. Its next Coinbase is probably already coding from a garage. But the charm exerted by the mention 'funded by a16z' has shifted from an unconditional pledge of trust to comparative information requiring verification.