Binance founder Changpeng Zhao (CZ) has addressed growing speculation that Binance may have ties to the fast-growing decentralized exchange Hyperliquid, confirming that while the platform’s founder was once part of a Binance Labs incubation program, there are no current investment links between the two. In a post on X, CZ said Jeff Yan, the founder of Hyperliquid, participated in Binance Labs’ first incubation cohort in 2018 through a startup called YZiLabs. Gossip tweet. Saw a couple of posts on this topic: If you didn't know, Jeff (HL) was part of the YZiLabs (Binance Labs back then) incubation season 1 cohort in 2018. Unfortunately, that project failed. YZiLabs did not recoup any of its investment. It happens. I did not… https://t.co/zUVtjQ3RCO — CZ BNB (@cz_binance) October 10, 2025 The project, which focused on a decentralized prediction market called Deaux, eventually failed, and Binance Labs did not recover its investment. CZ said he had little interaction with Jeff at the time and only learned about the connection earlier this year. “If you didn’t know, Jeff (Hyperliquid) was part of the YZiLabs (Binance Labs back then) incubation season 1 cohort in 2018. Unfortunately, that project failed. Hyperliquid’s Founder Once Part of Binance Incubator, CZ Confirms No Ongoing Ties YZiLabs did not recoup any of its investment,” CZ wrote. He added that YZiLabs holds no equity or tokens in Hyperliquid and emphasized that Binance supports all builders in the space. The post followed circulating photos from 2018 showing Jeff alongside other YZiLabs members, which fueled speculation of a deeper link between Hyperliquid and Binance. Jeff’s earlier project, Deaux, aimed to simplify decentralized prediction markets, an idea that later evolved into the foundation of Hyperliquid’s community-driven model. Hyperliquid , launched on its own layer-1 blockchain, has emerged as one of DeFi’s most active perpetuals trading platforms. In July 2025 alone, it processed about $319 billion in trading volume, according to DefiLlama data, the highest monthly figure since its launch. The surge contributed to a record $487 billion in total DeFi perpetuals volume that month. Built entirely on-chain, Hyperliquid operates through two tightly linked components: HyperCore, which handles order books, margin, and liquidations; and HyperEVM, a smart-contract layer sharing consensus and data with the exchange core. Its HotStuff-based HyperBFT consensus enables sub-second trade execution, achieving median latency of just 0.2 seconds, performance that rivals centralized exchanges. The platform’s structure diverges from the automated market maker model that dominates most decentralized exchanges. Instead, it maintains on-chain order books and matching systems, combining transparency with the speed typically seen in centralized venues. Hyperliquid’s core team is believed to consist of just 11 members. Founder Jeff Yan has described the project as self-funded, rejecting venture capital to maintain independence and community alignment. The team’s rapid response to outages, including a July incident that led to $1.99 million in trader reimbursements within a day, has drawn attention to its tight operational discipline. While CZ clarified that Binance has no financial stake in Hyperliquid, his comments shed light on the shared history between Binance Labs’ early incubation efforts and the builders now leading some of DeFi’s most prominent projects. Hyperliquid Emerges as Binance’s Strongest Decentralized Challenger Decentralized exchange Hyperliquid has continued to erode Binance’s dominance in crypto derivatives trading, with its trading activity now reaching 13.6% of Binance’s volume, up from 8% at the start of the year. The shift highlights how decentralized perpetual futures platforms are gaining traction as viable alternatives to centralized exchanges. Hyperliquid has processed over $200 billion in recent months, driven by new cross-chain features that support assets across multiple blockchains, including Bitcoin. The exchange now holds roughly 70% of the total decentralized perpetuals market, according to DeFiLlama and Token Terminal data . Its native token, HYPE, recently hit an all-time high of $59.29, bringing its market cap close to $16 billion. The rise of decentralized perpetual exchanges (perp DEXs) has been rapid. Combined trading volume across the sector reached $1.22 trillion in September, a 48% jump from August. Much of that activity came from Hyperliquid and Aster , a new derivatives DEX launched by YZi Labs , a firm linked to former Binance CEO Changpeng Zhao. Perp DEXs hit $1 trillion monthly volume for the first time as Aster and Hyperliquid lead a surge challenging centralized exchange dominance. #Perps #Dexs https://t.co/rDhsLASOLf — Cryptonews.com (@cryptonews) October 2, 2025 Aster has quickly climbed the ranks, posting nearly $494 billion in monthly volume and generating over $120 million in fees within a week. Despite Binance’s still-dominant $83 billion in daily futures volume, the gap between centralized and decentralized platforms is narrowing. Analysts say Hyperliquid’s consistent liquidity and Aster’s rapid rise signal a structural shift in derivatives trading, as traders increasingly favor decentralized, transparent, and non-custodial venues. The post Is Binance Backing Hyperliquid? CZ Breaks Silence, Reveals Founder’s Failed Binance-Backed Project appeared first on Cryptonews .
