The liquid staking protocol Kinetiq has officially announced the launch of Elysium — its own L2 network designed for the Hyperliquid ecosystem. This is a strategic move that should dramatically increase the throughput of HyperEVM and radically simplify the process of launching spot markets, issuing tokens, and deploying DeFi applications.
Why this matters for HyperEVM
The current HyperEVM architecture faces serious limitations: low throughput, rising fees during peak load periods, and a two-block transaction processing structure. Kinetiq emphasizes that Elysium will initially provide block production and transaction processing speeds several orders of magnitude higher than HyperEVM. In the long term, developers aim to bring performance closer to that of the HyperCore trading engine.
Special emphasis is placed on applications requiring frequent state updates: high-frequency spot trading, automated market makers (AMMs), and other DeFi services. Additionally, Elysium will expand access to HyperCore data — currently, HyperEVM smart contracts via the L1Read mechanism only receive the best bid and ask prices, while the new network will provide deeper order book data and up-to-date quotes.
Unifying asset launches
Currently, the process of launching a new token in the Hyperliquid ecosystem is fragmented: first, liquidity must be organized in HyperEVM, then the asset must be listed on the HyperCore spot market, and for perpetual futures, the HIP-3 mechanism must be used. Elysium will unify this process: a coin will be able to gain liquidity through an AMM, enter the HyperCore spot order book, and later — the perpetuals market via HIP-3, without unnecessary intermediate steps.
Economics and tokenomics
Kinetiq has also revealed Elysium's revenue distribution model. Half of the sequencer fees will go toward buying back and burning KNTQ tokens on the open market through the Hyperliquid Assistance Fund. Another 25% will go to application developers using the network's block space, and the remaining 25% — to the Kinetiq treasury. This expands the project's business model beyond HYPE liquid staking, where kHYPE remains the core product.
Technical details and the list of partners will be disclosed later; the launch date has not yet been announced, but according to the team, it will happen "in the near future." As a reminder, in June, Hyperliquid grew its open interest volume to $10 billion, ranking third among the largest platforms for perpetual futures trading.
My analysis: Elysium is not just scaling, but an attempt to create full-fledged infrastructure for institutional and high-frequency strategies within Hyperliquid. If the team manages to deliver the stated performance and integration with HyperCore, this could become a serious catalyst for the growth of the entire ecosystem and attract a new class of DeFi projects.