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Elysium, @Kinetiq_xyz's L2 on Hyperliquid, went live today. Half of its sequencer revenue buys KNTQ, while 12.9M KNTQ unlock every month from Nov 27 For HYPE, it depends on what Elysium brings to HyperCore. Here's why the chain exists, how value flows and what could break it Why Elysium was built: - HyperEVM shares its validators with HyperCore's order book, and the order book gets priority. That leaves HyperEVM little room: a 3M gas block every second, plus one 30M gas block a minute - When blocks fill up, fees spike. On Oct 29, HyperEVM's base fee jumped from 0.1 to ~1,000 gwei, and a swap cost roughly $15-20 - That's too slow and too costly for apps that update many times a second, like onchain market makers or AMMs that requote constantly - Elysium adds its own blockspace next to the order book: 100ms blocks and ~85x HyperEVM's gas per second, with HYPE as gas. A swap costs about a tenth of a cent. The order book stays untouched - Elysium contracts will read HyperCore prices, books and positions and send orders there, with users keeping custody. Targeted about four weeks after mainnet Fast blocks plus HyperCore open up new apps: - Market makers that quote onchain and hedge on HyperCore - Options and covered-call vaults hedged on HyperCore - Basis trades and tokenized stocks hedged with HIP-3 perps Same L2 model, different L1: - Like any L2, Elysium takes blockspace fees from its base layer. Gas that used to be burned on HyperEVM now goes into Kinetiq's split - For Ethereum that matters, since blockspace is what it sells, and L2s keep most of the fees. They paid Ethereum ~$113M in 2024 and ~$10M in 2025, under 10% of their own revenue - For Hyperliquid it doesn't. HyperEVM gas was ~$9.3M over 12 months, about 1.4% of its $680M revenue. Most of the rest comes from trading on HyperCore - And unlike Ethereum's L2s, Elysium can send trading back to its L1's order book. That's where HYPE could gain How HYPE could benefit from Elysium: - Hedging: a market maker sells you $HYPE on Elysium and rebuys it on HyperCore. Hyperliquid earns the fee, same for arbitrage - USDC: since AQAv2, ~90% of the net reserve yield on eligible USDC buys HYPE. New USDC from outside Hyperliquid could add to it - Listings: tokens that grow on Elysium can buy a HyperCore spot ticker in HYPE. e/acc paid 500 HYPE on Nov 7 - All three end up in $HYPE buybacks and burns KNTQ buybacks vs unlocks: - 50% of sequencer revenue buys KNTQ, 25% goes to builders, 25% to operations - Since KIP-5, bought KNTQ goes to Hyperliquid's Assistance Fund and is effectively burned - Some apps announced their own fee splits on top, with part going to KNTQ buybacks - $KNTQ trades at $0.355, 41% below its Oct 30 high. Market cap ~$115M, FDV ~$355M - Kinetiq holder revenue over the last 30 days: ~$129K (DefiLlama) - From Nov 27, 310M team and investor KNTQ vest over two years: ~12.9M a month, ~$4.6M at today's price - To offset the unlocks, Elysium would need ~$305K of sequencer revenue a day What could break the case: - Launch fade: Circle's Arc did $75M of DEX volume a day in its first week (Sep 16-22) and ~$20M a day from Oct 10 to Nov 8 - Shifted activity: if Elysium mostly pulls volume and USDC from HyperEVM and HyperCore, KNTQ gains more than HYPE - Trust: one sequencer, one Conduit-run data server, permissioned validation and ~5.5-day withdrawals through the official bridge. Kinetiq also runs kHYPE, so trouble at one would weigh on both Elysium fixes a real limit for fast trading apps on Hyperliquid. KNTQ gets the direct cash flow, but its current ~$129K of monthly holder revenue covers about 3% of the ~$4.6M monthly unlock. HYPE only gains if Elysium brings new trading, listings and USDC to Hyperliquid Launchpads come first, since all they need is cheap blockspace. The HyperCore link is what makes this interesting for HYPE. The two numbers I will follow closely: sequencer revenue vs the ~$305K a day the unlock implies, and stablecoins on Elysium growing without draining HyperEVM Data as of Nov 9, 18:50 UTC: @DefiLlama, @coingecko, @Kinetiq_xyz, @Enter_Elysium and @HyperliquidX docs, project announcements. Not financial advice