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Highlights
- Validators criticize Hyperliquid for centralization and transparency issues.
- Hyperliquid has responded to the criticism, gaining market attention.
- HYPE token price drops by 15%, trading at $21.62 amid growing concerns.
Hyperliquid (HYPE) token is once again in the spotlight as validators have raised concerns about its centralization and lack of transparency. The topics of major challenges including closed source code, centralized API dependence, and closed decentralization have generated discussions across crypto. As a result, HYPE token price suffered a sharp drop of 15% in the last 24 hours amid the broader market volatility. With increasing demands for transparency, the project’s future remains under a critical challenge.
Hyperliquid Responds to Validator Decentralization Concerns
Hyperliquid has come under fire following claims about decentralization flaws raised by Kam, a well-known figure in the crypto community. Kam, in a detailed post on X, highlighted concerns about the platform’s validator structure, accusing it of being overly centralized and closed to wider participation. He also alleged that the current system restricts competition and creates barriers for validators outside the initial testnet participants.
In so doing, Hyperliquid released a press statement in response to the accusations. The platform emphasized that all validators earned their positions based solely on testnet performance, rejecting accusations that seats could be purchased. Hyperliquid noted that such allegations trivialize the effort taken, by validators who dedicated a lot of time to learning and aiding to evolve the system.
In an effort to further decentralize the network, the exchange has announced plans to develop the validator set as the blockchain ages. The Foundation Delegation Program is introduced to back the high-level validator and build up a more decentralized ecosystem.
The group also dispelled the misconception about API server availability, that it is possible to run any server pointing to any node. Hyperliquid addressed concerns about the closed-code status of its existing node. The platform assured users that open sourcing will happen once development stabilizes and becomes secure.
Hyperliquid’s Stance on Testnet Tokens and Market Innovation
Responding to calls about testnet tokens, Hyperliquid restaffed the company’s position against a black market for testnet HYPE. This also presented current work to better the participation onboarding of subjects. The platform reaffirmed its commitment to fast innovation. It aims to put all financial transactions on-chain in a transparent and inclusive way.
At the same time, dYdX’s CEO, in another statement, commented on the current controversy in that the criticisms against Hyperliquid’s validator model. He added that it is common for early-stage projects to face scrutiny regarding centralization as they scale and mature. He acknowledged the criticisms but stressed the need for robust technical systems.
HYPE Token Price Drops Amid Concerns
HYPE token has dropped sharply by 15% over the 24 hours to date and was trading at $21.62. The 24-hour low and high were $21.25 and $26.29, respectively. The market cap of the token was $7.24 billion and the trading volume was $213 million. As per Coinglass data, Hyperliquid Futures’ trading volume reached $7.45 billion, with $3.47 billion in open interest.
Meanwhile, this Hyperliquid concern also comes amid soaring interest in the HYPE token. Notably, despite the recent dip, the token has added about 64% over the last 30 days. Besides, a recent CoinGape report showed that Solana’s price fell after a whale dumped its Solana reserves and exchanged them for HYPE.
On the other hand, Hyperliquid mainnet has recently revealed a major update, which has also fueled market optimism. In a recent announcement, the project introduced the HYPE token staking feature on its decentralized exchange.
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