Why Hybrid Protocols Are the New Black in DeFi: Trust Issues? Not Anymore!

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Ah, the Decentralized Finance (DeFi) space! It’s like a bustling bazaar where everyone is trying to sell you the latest and greatest in financial wizardry. Recently, protocols like Hyperliquid and Ethena have been strutting their stuff, gaining attention and proving to be quite the success stories. But wait! Are they really decentralized, or is this just a clever ruse? 🤔

As these protocols gain traction, the question looms large: Are we witnessing a genuine shift in the DeFi landscape, or is it all just smoke and mirrors? 🎭

Hyperliquid: Users Crave DeFi, Just Not the Whole Decentralization Thing

Hyperliquid, the belle of the DeFi ball, recently boasted a jaw-dropping 54% increase in its total value locked (TVL) in May. It leaped from a modest $2.21 billion to a staggering $3.35 billion! Talk about a financial growth spurt! 📈 This surge indicates that even if some parts of the protocol are not fully decentralized, it still manages to charm investors and their wallets.

Now, Hyperliquid employs a hybrid model for order matching. Picture this: orders are matched off-chain, but the whole shebang, including the order book, is verified and settled on-chain. It’s like having your cake and eating it too—swift execution with a side of integrity and security! 🍰

But hold your horses! This hybrid approach makes it only partially decentralized, unlike its more radical cousins, Uniswap, Lido DAO, and Aave.

In an exclusive chat with BeInCrypto, Tracy Jin, COO of MEXC, declared that the operational model is irrelevant. Why? Because the community is waking up to the fact that a project doesn’t need to be fully decentralized to thrive. Who knew? 🙄

“Paradoxically, projects like Hyperliquid and Ethena have succeeded especially because they deliberately moved away from full decentralization. Instead, they focused on core values like permissionless access and transparency. Users could interact freely with the protocols, confident that everything happening on-chain was visible and verifiable. As a result, trust and engagement increased — even if, under the hood, there were still elements of centralized oversight. This is part of a bigger trend in DeFi,” said Jin.

She went on to suggest that Hyperliquid’s success might just spark a revolution in how developers operate. Teams dabbling in the hybrid-centralization space often ship faster and provide users with clearer value propositions. It’s like a fast-food drive-thru for crypto! 🍔

Pauline Shangett, CSO at ChangeNOW, chimed in, suggesting that the hybrid model could become the bedrock of the crypto industry. Who would have thought? 🤷‍♂️

“We will not see a shift in favour of either [DeFi or Centralization] side. Hybrid solutions are the future of the industry. The DeFi emphasis will remain in most marketing materials as a way for companies to differentiate themselves from their competitors. Conversely, they will try to hide elements of centralization. But all this will only happen initially. Eventually, we will accept the new reality and not deceive ourselves,” Shangett noted.

So, it seems users are likely to favor solutions that actually work, even if they aren’t completely decentralized. Jin added that at the end of the day, what really matters is that projects earn investors’ trust. Because without trust, it’s like trying to build a house on quicksand. 🏚️

“Investor trust is the foundation of DeFi. If that erodes, the entire ecosystem will suffer. Without trust, users won’t deposit liquidity, institutions won’t partner or invest, and the innovation cycle slows. Capital may move back into centralized exchanges or even exit crypto entirely in search of stability and predictability,” Jin told BeInCrypto.

The HYPE Price Saga: A Rollercoaster Ride

HYPE has been on a wild ride, posting a 64% increase in May and carrying that momentum into June. As of now, HYPE is trading at $36.33. This sustained increase suggests that investor interest is as strong as a double espresso on a Monday morning! ☕

Currently, this decentralized finance token is just 16.25% shy of its all-time high (ATH) of $42.25, reached in December 2024. To hit that target, HYPE needs to hold the $36.47 support level. If it can manage that, we might just see it soar to new heights! 🚀

However, not all is sunshine and rainbows. Ongoing selling by investors poses a threat to HYPE’s price stability. If selling pressure ramps up, we could see the price tumble below $36.47 and head toward $31.26. A failure to hold this support would be like a bad breakup—devastating! 💔

This could trigger further declines, potentially plummeting to $27.31, marking a significant shift in market sentiment. Buckle up, folks! 🎢

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2025-06-09 23:44