Why Hybrid, (Not Fully Decentralized) Protocols Like Hyperliquid Are Winning Users’ Trust

The Decentralized Finance (DeFi) space has recently witnessed a surge in activity, with protocols like Hyperliquid and Ethena gaining attention and proving successful.

Despite their growth, many have questioned whether these protocols are truly decentralized. Are these successes a fluke or a sign of a larger shift in the DeFi space?

Hyperliquid Proves Users Want DeFi But Not Complete Decentralization

Hyperliquid, a prominent DeFi protocol, saw a remarkable 54% rise in its total value locked (TVL) within just one month in May. Its TVL jumped from $2.21 billion to $3.35 billion, signaling growing investor interest. This surge suggests that even if some aspects of the protocol are not fully decentralized, it still attracts significant capital and trust from investors.

Hyperliquid TVL. Source: DeFiLlama

Hyperliquid employs a hybrid model for order matching. Initially, orders are matched off-chain, but the entire procedure, including the creation of the order book, is designed to be verified and settled on-chain. This combination ensures swift execution while upholding high standards of integrity and security.

However, this approach also makes it partially decentralized, unlike Uniswap, Lido DAO, and Aave.

Speaking exclusively to BeInCrypto, Tracy Jin, COO of MEXC, stated that the model of operation does not matter. This is because the community is starting to see that a project doesn’t have to be fully decentralized to succeed.

“Paradoxically, projects like Hyperliquid and Ethena have succeeded especially because they deliberately moved away from full decentralization. Instead, they focused on core values like permissionless access and transparency. Users could interact freely with the protocols, confident that everything happening on-chain was visible and verifiable. As a result, trust and engagement increased — even if, under the hood, there were still elements of centralized oversight. This is part of a bigger trend in DeFi,” said Jin.

She further stated that the success of Hyperliquid could likely trigger a shift in the way developers operate. She stated that teams using the hybrid-centralization space often ship faster and offer users clearer value propositions.

Furthermore, Pauline Shangett, CSO at ChangeNOW told BeInCrypto that there is a chance that the hybrid model may become the cornerstone of the crypto industry.

“We will not see a shift in favour of either [DeFi or Centralization] side. Hybrid solutions are the future of the industry. The DeFi emphasis will remain in most marketing materials as a way for companies to differentiate themselves from their competitors. Conversely, they will try to hide elements of centralization. But all this will only happen initially. Eventually, we will accept the new reality and not deceive ourselves,“ Shangett noted.

Thus, users are likely to prioritize solutions that work, even if they aren’t completely decentralized. Jin added that at the end of the day, regardless of the operational model, what matters is that projects ascertain investors’ trust.

“Investor trust is the foundation of DeFi. If that erodes, the entire ecosystem will suffer. Without trust, users won’t deposit liquidity, institutions won’t partner or invest, and the innovation cycle slows. Capital may move back into centralized exchanges or even exit crypto entirely in search of stability and predictability,” Jin told BeInCrypto.

HYPE Price’s Journey Over The Month

HYPE has demonstrated impressive growth, posting a 64% rise in May and carrying that momentum into June. As of the time of writing, HYPE is trading at $36.33. This sustained increase indicates that investor interest is strong, and the token could be heading for further gains.

Currently, the decentralized finance token is only 16.25% away from its all-time high (ATH) of $42.25, which was reached in December 2024. To achieve this price target, HYPE must secure the $36.47 support level. If the altcoin successfully holds this level, it could reach the ATH and even push higher, continuing its upward trajectory.

HYPE Price Analysis. Source: TradingView

Despite the positive momentum, ongoing selling by investors remains a concern for HYPE’s price stability. If selling pressure increases, the price may fall below $36.47 and head toward $31.26. A failure to hold this support would invalidate the bullish outlook.

This could likely trigger further declines, potentially dropping to $27.31, marking a significant shift in market sentiment.

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