Hyperliquid (HYPE) token is back in the spotlight due to validators’ concerns about centralization and lack of transparency. These criticisms include issues such as closed source code, centralized API dependency, and limited decentralization. As a result, the price of the HYPE token has fallen sharply by 15% in the last 24 hours amid general market volatility.
Validators’ Centrality Concerns
Hyperliquid became the focus of criticism following allegations of centralization issues made by Kam, a well-known figure in the crypto community. Kam stated that the validator structure of the platform is extremely centralized and closed to broad participation. He also claimed that the current system restricts competition and creates barriers for validators other than initial testnet participants.
Hyperliquid’s Response and Development Plans
In its press release in response to the allegations, Hyperliquid emphasized that all validators earned their positions based solely on testnet performance. The platform denied claims that validator positions could be purchased, stating that they belittled the effort validators put into developing the system.
“Our Validators have gone to great lengths to contribute to the evolution of our platform” – Hyperliquid Official
To make the network more decentralized, Hyperliquid announced plans to improve its set of validators as the blockchain matures. With the Foundation Delegation Program, it aims to support a higher level of validators and create a more decentralized ecosystem.
Market Reactions and HYPE Token Status
The HYPE token lost 15% of its value in the last 24 hours and is trading at $21.62. While the market value of the token was $7.24 billion, the transaction volume was recorded as $213 million. Additionally, the dYdX CEO noted that criticism over Hyperliquid’s validator model points to the common challenges early-stage projects face with centrality issues as they grow.
On the other hand, the Hyperliquid mainnet recently rolled out a major update, which has increased market optimism. The project introduced the HYPE token staking feature on its decentralized exchange.
Although the HYPE token has gained 64% in value in the last 30 days, the Solana price has also fallen due to whales replacing Solana reserves with HYPE despite the recent declines.
Users are closely following Hyperliquid’s changes in response to growing demands for transparency about its future and criticism of the project’s centrality.
In line with new updates and developments, the future performance of the HYPE token will continue to be shaped by the platform’s improvements in centralization and market conditions.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
