TL;DR

Hyperliquid responds to validator criticism, clarifying that seats cannot be purchased. 
HYPE token price drops 15% due to decentralization concerns. 
Despite criticism, Hyperliquid reaffirms its commitment to decentralization and innovation.

The cryptocurrency ecosystem is once again in turmoil due to Hyperliquid, the platform facing harsh criticism for its approach to decentralization. Validators and key members of the crypto community have pointed out several weaknesses in its network structure, particularly regarding the centralization of validators. This controversy has directly impacted the value of the HYPE token, which has dropped 15.44% in the last 24 hours, from $26.29 to $21.44.

Criticism and Hyperliquid’s Response

One of the most critical points raised is that the platform favors a closed validator structure, limiting the entry of new participants and creating barriers to competition. These comments were driven by Kam, a well-known figure in the crypto community, who highlighted that Hyperliquid’s network was not open to expanding the group of validators beyond the initial testnet group. However, Hyperliquid, via its official Twitter account, responded to these accusations by clarifying that validators were selected solely based on their performance in the testnet and that there is no possibility to “buy” a seat. The platform also emphasized that the criticism undermined the effort and dedication of the validators who contributed to the system’s development.

In addition, the platform reaffirmed its commitment to increasing decentralization over time. To achieve this, they announced the “Foundation Delegation Program”, aimed at supporting high-performing validators and expanding the validator network. This initiative seeks to boost community participation and provide more opportunities in the future.

Commitment to Transparency and Open Development

Despite the criticism, Hyperliquid also took the opportunity to clarify some misconceptions about its servers and closed-source code. The company assured users that they will be able to run their own API servers connected to any node, further decentralizing the network. Additionally, the platform explained that its code is still closed, but open sourcing will happen once the development is mature and secure. According to Hyperliquid, this approach is necessary due to the speed at which the platform is advancing and the complexity of the project.

Although the HYPE token has seen a significant drop in value, the platform remains optimistic and maintains its commitment to bringing finance fully on-chain in a transparent and accessible manner for everyone.

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Filed under: News - @ January 8, 2025 2:19 pm