Kinetiq, Hyperliquid's largest liquid staking protocol, unveiled Elysium, an upcoming L2 designed to tackle HyperEVM's performance limitations while also trying to jumpstart Hyperliquid's stagnant spot and DeFi ecosystem.
• Introducing Elysium: Elysium will be a faster EVM environment built specifically for Hyperliquid, using HYPE as gas and connecting directly with HyperCore. It looks to address some of HyperEVM's biggest limitations: low throughput, expensive transactions when activity spikes, and a dual-block design that splits transactions between fast, smaller blocks and slower, larger ones. Technical specs and launch partners are still to come, with Kinetiq saying launch is imminent.
• Reviving Hyperliquid Spot: Hyperliquid's spot markets have failed to match its dominance in perps, with Kinetiq pointing to spot volumes and HIP-2 liquidity sitting near multi-month lows. Elysium aims to change that by giving PropAMMs a faster execution environment and direct access to HyperCore orderbook data, while creating a full token lifecycle where assets can launch through an AMM, graduate into deeper liquidity, bootstrap a HyperCore spot market, and eventually secure a HIP-3 perp listing.
• Kinetiq Needs It Too: Kinetiq still controls the overwhelming majority of HYPE liquid staking, but its core market has shrunk considerably. As we previously covered, kHYPE supply fell 62% from its August 2025 peak through May, while liquid-staked HYPE dropped from 10.42% to 4.42% of total staked HYPE. That weakness has persisted, with Kinetiq's core kHYPE TVL down nearly 18% over the past month.
• Another KNTQ Engine: Elysium also adds a direct new source of value for KNTQ. Of sequencer fees, 25% will go to builders, 25% to Kinetiq's treasury, and 50% toward open-market KNTQ purchases, with all purchased tokens burned. If Elysium succeeds in drawing meaningful activity, Kinetiq would no longer have to rely primarily on staking and its existing products to generate buybacks.