$2.3 million per day: Why is Hyperliquid starting another stove for L2?

According to Woofun AI, Elysium officially announced the launch, marking a major evolution of the Hyperliquid ecosystem from a single L1 to an L1+L2 hybrid architecture. Unlike previous L2's simple extraction of L1 traffic, Elysium aims to substantially add value to L1 value by providing independent block space and deep integration with HyperCore order books.

This move not only addresses HyperEVM's long-standing performance bottlenecks, but also seeks to establish a new balance between DeFi composability and transaction efficiency, and inject new growth momentum into the Hyperliquid ecosystem.

At the core of Hyperliquid's business model is its high-performance order book engine HyperCore, which has generated approximately $680 million in revenue over the past 12 months. However, HyperEVM, a smart contract chain closely linked to order books, faces serious performance challenges. According to the data, after reaching a peak in August 2025, HyperCore's spot trading volume fell sharply by more than 80%; HyperEVM's trading volume also peaked the following month, and is currently down about 65%. In contrast, Robinhood Chain (HOOD.US), which launched in July 2026, had a monthly DEX turnover of $25.7 billion in October of the same year, which even surpassed the sum of HyperCore's stock and HyperEVM between August and October.

This stark contrast reveals an imbalance in Hyperliquid's internal ecosystem: smart contract applications outside of the order book failed to keep up with the development of the main engine, limiting overall ecological vitality.

Analyzing the blockchain space competition in depth, the current state of Ethereum L2 further highlights HyperEVM's plight. In 2025, the total gas revenue of dozens of L2s in the Ethereum ecosystem was only $129 million, of which approximately $10 million was paid to the Ethereum mainnet.

Although the Ethereum main network generates blocks every 12 seconds, and the block gas limit is 60 million, which is equivalent to a processing capacity of about 5 million gas per second, HyperEVM's performance is far inferior to this. Since HyperEVM shares validator resources with HyperCore and prioritizes order book performance, its block output is limited to one block of 3 million gas per second and one block of 30 million gas per minute, which translates to only about 3.5 million gas per second.

This performance bottleneck makes it impossible to effectively implement high-frequency trading scenarios. For example, AMMs that require multiple re-quotes per second or arbitrage robots that respond quickly to price changes are difficult to operate. During peak load periods, the processing fee for ordinary exchange transactions on HyperEVM was even as high as $20, which seriously curtailed user activity.

The decline in trading volume data intuitively reflects the impact of this performance bottleneck. After peaking at $7.9 billion in September 2025, HyperEVM's DEX volume dropped to $2.8 billion by October 2026; HyperCore's spot volume also fell from $222 billion to $4.2 billion over the same period. While market sentiment is generally lackluster to altcoin trading, technical restrictions are also critical. By comparison, Robinhood Chain, which uses the same Arbitrum Orbit technology stack, achieved $54 billion in DEX transactions in its third month of launch (September 2026).

This data shows that market demand still exists. The problem is that HyperEVM cannot handle high-frequency, low-latency transaction demand. As a result, Hyperliquid chose to bypass this performance ceiling by building a standalone L2 rather than simply optimizing the existing chain structure.

Judging from the economic ledger, Hyperliquid's decision logic is clear. Over the past two months, HyperCore has generated an average daily revenue of around $2.3 million, while HyperEVM's gas revenue totals only a few million dollars for the year. Sacrificing order book stability in order to improve HyperEVM performance is clearly an irrational commercial choice. As an Arbitrum Orbit-based L2, Elysium solved this problem through independent block spaces. It has a target block generation time of 100 ms and a processing capacity of 300 million gas per second, which is about 85 times that of HyperEVM.

In terms of rates, Elysium is optimized for scenarios where market makers update quotes 5 to 10 times per second. According to testnet data, the base rate is 0.1 gwei. Based on the HYPE price of 73 US dollars, the single exchange cost is about 0.1 cents, and the cost of a single quote update is about 0.0004 US dollars. Even running at a frequency of 10 times per second throughout the day, the daily cost for market makers is only about $300, which is far less than HyperEVM's $20 exchange fee during times of congestion.

Data compiled by Woofun AI shows that Elysium's deep integration with HyperCore is a core characteristic that distinguishes it from other L2s. Within four to six weeks after the main network is online, Elysium will achieve two key capabilities: one is that the contract can directly read HyperCore's order book, price, balance, and position, without an oracle, with a data delay of about 150 to 350 ms; second, the contract can place orders on HyperCore through Keeper agents, and the order can be suspended approximately 100 ms after the agent signs.

This mechanism ensures that funds are always controlled by users, and agents only have the authority to place and cancel orders, and cannot withdraw or transfer coins. Notably, this interaction process doesn't go through HyperEVM; Elysium directly runs the Hyperliquid node to talk to HyperCore. In contrast, L2 such as Base rely on centralized exchanges such as Binance for price discovery and arbitrage, and the pricing is separated from the trading system; while Elysium uniformly points price feeding, arbitrage, and hedging to HyperCore, achieving consistency between pricing and trading venues.

The restructuring of the economic model is another major innovation at Elysium. Unlike HyperEVM, which destroys all gas, Elysium's sequencer fee allocation is more diverse: 50% is used to repurchase Kinetiq's token KNTQ, 25% is allocated to applications that use blockchain space, and the remaining 25% goes to Kinetiq's treasury.

Furthermore, Kinetiq plans to pledge HYPE bridged to Elysium through its liquidity staking agreement, so that bridged assets receive revenue by default, similar to how Blast handles bridged ETH.

This mechanism has not only increased the utility of HYPE, but also expanded the scale of Kinetiq's pledge business. Although HYPE does not directly share sequencer fees as a gas token, Hyperliquid's overall revenue structure has not been damaged as a result. Over the past year, Hyperliquid earned around $680 million, almost entirely from HyperCore transaction fees, while HyperEVM's Gas revenue was only about $1 million a year. Even if this portion of revenue were replaced by Elysium, the overall impact would be minimal.

The incremental value that Elysium brings to the Hyperliquid ecosystem is mainly reflected in three aspects: hedge-driven trading volume, incremental USDC earnings, and new listing channels. First, transactions on Elysium will prompt market makers to hedge against HyperCore, thereby increasing HyperCore's trading volume and revenue. For example, when a user buys HYPE on Elysium, the market maker needs to fill up positions on HyperCore, a process that contributes additional transaction fees to Hyperliquid. Second, according to the AQAv2 rules, approximately 90% of the reserve proceeds generated by USDC issued on-chain are owned by Hyperliquid and used to repurchase HYPE.

USDC on Elysium is minted and endorsed by HyperEVM, so for every $100 million USDC inflow, Hyperliquid's revenue market expands by $100 million. Finally, Elysium became HyperCore's new listing portal. The project can first issue tokens on Elysium AMM, then obtain a HyperCore order book by purchasing HIP-1 transaction codes (such as EACCAT and EACC issued by Montra and Ascend), and even stake 500,000 HYPE to deploy the HIP-3 perpetual contract.

This process has simplified the listing threshold and enriched HyperCore's market ecosystem.

Increased composability is Elysium's core vision. In traditional DeFi applications, although contracts can be combined, they cannot touch the deep liquidity of centralized exchanges. As the first platform to put a major trading venue on-chain, Hyperliquid seamlessly connects order books to smart contracts through Elysium. Specific application scenarios include: on-chain native market makers, using Elysium's low-cost blockchain space and HyperCore's deep liquidity to achieve multiple re-quotes per second; shared collateral options allow users to sell bullish options on Elysium while holding HYPE, and manage margin uniformly without transferring assets.

For example, users with 5,000 HYPES (worth about $365,000) can support perpetual and spot positions of about $237,000 at a collateral rate of 65%, while selling 30-day bullish options with an execution price of $90 to $90, annualized premium earnings of about 7% to 15%, income of 2,100 to 4,600 dollars per option, and annual revenue of $26,000 to $55,000.

In addition, structured products such as bullish vaults and tokenized stock hedging will also benefit from this structure.

However, Elysium's development still faces potential risks. First, there is the risk of meme coin dependency. The initial traffic is probably mainly from Launchpad and meme coin transactions, such as MontraxyZ and AscendLaunch, which have already taken the lead. If Elysium does not show deep application by the end of the first quarter of 2027, its value will be greatly reduced. Second, there is zero-sum game risk. If Elysium only transfers existing traffic from HyperEVM and HyperCore without generating additional USDC or external transaction volume, then its contribution to Hyperliquid's overall revenue is limited. Finally, there is centralized trust risk. Currently, Elysium is operated by a single entity that operates the sequencer and data server, and before Arbitrum BoLD was opened, validator permissions were limited.

Additionally, Kinetiq also operates a pledge agreement, validator, and sequencer. If a security incident occurs, it will affect all KyHype holders and all applications on Elysium. Despite the risks, Elysium has created a second growth curve for the Hyperliquid ecosystem, making it no longer dependent on a single development team, but instead allows any team to build innovative products such as options and combined margin next to HyperCore to accelerate the diversification process of the ecosystem.