Binance founder Changpeng Zhao (CZ) has addressed growing speculation that Binance may have ties to fast-growing decentralized exchange Hyperliquid, confirming that while the platform’s founder was once part of a Binance Labs incubation program, there are currently no investment relationships between the two.
In a message on X, CZ said Jeff Yan, the founder of Hyperliquid, joined Binance Labs’ first incubation cohort in 2018 through a startup called YZiLabs.
Gossip tweet. I saw a few posts on this topic:
In case you didn’t know, Jeff (HL) was part of the YZiLabs (then Binance Labs) incubation season 1 cohort in 2018.
Unfortunately, that project failed. YZiLabs has not recouped its investment. It happens.
I didn’t… https://t.co/zUVtjQ3RCO
—CZ
BNB (@cz_binance) October 10, 2025
The project, which focused on a decentralized prediction market called Deaux, ultimately failed and Binance Labs was unable to recover its investment. CZ said he had little interaction with Jeff at the time and only learned of the connection earlier this year.
“If you didn’t know, Jeff (Hyperliquid) was part of the YZiLabs (then Binance Labs) incubation season 1 cohort in 2018. Unfortunately, that project failed.
The founder of Hyperliquid, once part of Binance Incubator, confirms that there are no conveyor belts
YZiLabs has not recouped any of its investments,” CZ wrote, adding that YZiLabs owns no shares or tokens in Hyperliquid and emphasizing that Binance supports all builders in the space.
The post followed circulating photos from 2018 showing Jeff with other YZiLabs members, fueling speculation about a deeper connection between Hyperliquid and Binance.
Jeff’s previous project, Deaux, aimed to simplify decentralized prediction markets, an idea that later evolved into the foundation of Hyperliquid’s community-driven model.
Launched on its own layer 1 blockchain, Hyperliquid has become one of DeFi’s most active trading platforms for perpetuals. In July 2025 alone, it handled around $319 billion in trading volume, according to DefiLlama data, the highest monthly figure since launch.
The increase contributed to a record $487 billion in total DeFi perpetuals volumes that month.
Hyperliquid is built entirely on-chain and operates through two closely linked components: HyperCore, which handles order books, margins and liquidations; and HyperEVM, a smart contract layer that shares consensus and data with the exchange core.
The HotStuff-based HyperBFT consensus enables trades to be executed in less than a second, achieving an average latency of just 0.2 seconds, performance that rivals centralized exchanges.
The platform’s structure is a departure from the automated market maker model that dominates most decentralized exchanges.
Instead, it maintains on-chain order books and matching systems, combining transparency with the speed typically seen in centralized locations.
Hyperliquid’s core team is believed to consist of just 11 members.
Founder Jeff Yan has described the project as self-funded, rejecting venture capital to maintain independence and community connection.
The team’s rapid response to outages, including an incident in July that resulted in $1.99 million in merchant fees within a day, has drawn attention to its tight operational discipline.
While CZ clarified that Binance has no financial stake in Hyperliquid, his comments shed light on the shared history between Binance Labs’ early incubation efforts and the builders now leading some of DeFi’s most prominent projects.
Hyperliquid emerges as the strongest decentralized challenger to Binance
Decentralized exchange Hyperliquid has continued to erode Binance’s dominance in crypto derivatives trading, with trading activity now reaching 13.6% of Binance’s volume, up from 8% at the start of the year.
The shift highlights how decentralized perpetual futures platforms are increasingly gaining traction as viable alternatives to centralized exchanges.
Hyperliquid has processed more than $200 billion in recent months, thanks to new cross-chain features that support assets across multiple blockchains, including Bitcoin.
The exchange now owns approximately 70% of the total decentralized perpetuals market, according to DeFiLlama and Token Terminal data. The original token, HYPE, recently reached an all-time high of $59.29, bringing its market cap to almost $16 billion.
The rise of decentralized perpetual exchanges (perp DEXs) has been rapid. Combined industry trading volume reached $1.22 trillion in September, up 48% from August.
Much of that activity came from Hyperliquid and Aster, a new derivatives DEX launched by YZi Labs, a company linked to former Binance CEO Changpeng Zhao.
Perp DEXs reached $1 trillion in monthly volume for the first time, while Aster and Hyperliquid experienced a surge that challenged centralized currency dominance.#Press #Dexshttps://t.co/rDhsLASOLf
— Cryptonews.com (@cryptonews) October 2, 2025
Aster has quickly climbed the rankings, posting monthly volume of nearly $494 billion and generating over $120 million in fees within a week.
Despite Binance’s still dominant $83 billion volume of daily futures, the gap between centralized and decentralized platforms is closing.
Analysts say Hyperliquid’s consistent liquidity and Aster’s meteoric rise indicate a structural shift in derivatives trading, as traders increasingly favor decentralized, transparent and non-custodial venues.
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