Elysium

HyperEVM already gives builders smart contracts next to HyperCore. Any new Hyperliquid-adjacent chain therefore has to justify more than access.

Elysium is making that case with faster blocks, but speed is only the infrastructure claim. The economic case requires markets to begin there, liquidity to stay, and the resulting activity to make HyperCore busier than it would have been without the chain.

The launch thesis is economic. Elysium activity is supposed to create new HyperCore fees and HYPE burn, while part of its own sequencer revenue buys KNTQ.

On 22 September, Elysium opened its public testnet. Anyone can now hit the RPC, inspect blocks and try the bridge. The network is running; demand is still an open question. Builders need a reason to put a market there instead of on HyperEVM or directly on HyperCore.

Elysium does not need to beat HyperEVM as an EVM. It needs to become the place where new Hyperliquid-native markets originate.

The first week moved fast

The official explorer shows how quickly the public testnet expanded:

From the first full day to 28 September, daily transactions grew 8× and active accounts 18.6×. By the partial 29 September snapshot, the explorer had indexed 1,828,441 transactions and 28,247 accounts.

Infrastructure also spread beyond Kinetiq. Hypedexer launched a public RPC synced from genesis, added chain and bridge indexing, and released an open-source node setup. Outside builders can now inspect and run the chain more easily. What remains unclear is which applications generated the traffic and how much came from campaigns, scripts and load testing.

HyperEVM is the control group

HyperCore has the order books, while HyperEVM supplies the smart-contract layer. Builders can already deploy Solidity applications, inspect exchange state through L1Read precompiles, and submit actions through CoreWriter.

Applications and professional market makers already have a route into this market. An application can live on HyperEVM, while a market maker can run an offchain bot against HyperCore and sign orders directly. Both routes avoid another bridge, sequencer and upgrade surface.

The existing stack becomes awkward when the bot has to become a financial product. Shared deposits and contract-enforced risk limits are difficult to bolt onto an offchain process, especially when other applications need to compose with the position. HyperEVM can support those contracts, but its dual-block architecture was not designed for strategies that repeatedly read deeper order-book state, adjust quotes and wait for fast confirmation.

That gives Elysium a technical opening whose value depends on attracting users.

Kinetiq can seed the first economy

Distribution is the strongest bull case. Kinetiq already runs liquid-staking and institutional HYPE products alongside launch and market infrastructure. Its contracts page lists kHYPE, kmHYPE and products associated with Flowdesk, Hyperion, ASXN and HYLQ, with eight audits across its existing product families. Hyperion's own regulatory filing confirms the validator relationship from the counterparty side.

As of 29 September 2026, DefiLlama showed roughly $1.20 billion in Kinetiq TVL, $38.21 million in cumulative fees and $5.46 million in cumulative protocol revenue. Since the 21 September snapshot, TVL fell about 11%, while fees increased by roughly $466,000 and protocol revenue by about $121,000. Against a reported seed round of $1.75 million, that is credible evidence that the team can ship contracts, attract assets and generate fees without relying on a large venture bankroll.

The same team is building Elysium. Omnia and Ericonomic are co-founders; Magnus and Greg are among the visible builders. Ericonomic also wrote the clearest public case for the chain:

X (formerly Twitter)Ericonomic (@ericonomic) on XElysium: The First Value Accretive L2https://x.com/ericonomic/status/2100241832773046402

That stack lets Elysium open with assets, launch infrastructure, liquidity and market makers already within reach. It also concentrates the early ecosystem around one team. Outside capital, unaffiliated applications and users who return after incentives fade will show whether the chain can grow beyond that base.

What gets users there, and what keeps them there

Kinetiq already has enough pieces to test a real loop:

1. Launch originates a new asset or product on Elysium.

2. Kinetiq supplies the first liquidity and a route to a HyperCore spot book.

3. HyperCore gives traders a real exit, while arbitrage draws market-maker inventory across both venues.

4. Vaults and structured products reuse that inventory, giving capital a reason to remain after the launch.

5. Retained liquidity makes the next market cheaper to bootstrap.

Every handoff matters. A launch without durable liquidity produces short-lived speculation. AMM volume without external deposits may be recycled ecosystem capital, while vaults without attractive markets are empty wrappers. Fast execution can keep this loop moving; the markets themselves have to give users a reason to enter it.

Phase one moves tokens. Phase two may keep capital working.

The chain specification describes an Arbitrum Orbit chain settling to HyperEVM, with HYPE as gas, 100-200 ms canonical blocks and a 300 Mgas/s execution target. On paper, that is 5-10x faster than HyperEVM's fast lane and offers roughly two orders of magnitude more execution capacity.

The testnet runs on chain ID 99801, with a public JSON-RPC endpoint, bridge and explorer. A direct RPC call on 29 September returned block 849,302 with a fresh timestamp. The explorer had indexed 1.83 million transactions and 28,247 accounts, while Hypedexer was independently serving and indexing the chain. This is stronger infrastructure and participation evidence than the launch-week snapshot. Retained liquidity and production demand remain unproven. Mainnet is pre-launch, and the product edge arrives later.

Phase one is the asset rail. HYPE bridges 1:1 and becomes native gas. Other tokens lock and mint representations across Elysium and HyperEVM, then use HyperCore's deposit-wallet flow to reach a spot book. Kinetiq's bridge architecture documents the backing invariants and now exposes live testnet routers, gateways and factories.

Phase two is what turns the rail into application infrastructure. A scheduled ArbOS upgrade would add deeper HyperCore data and an ElysiumCoreWriter, letting contracts read the book and send orders through a trade-only agent that cannot withdraw. A market-making vault is the clearest example: users deposit into a contract, the contract sets risk limits, and a revocable agent executes on HyperCore without taking custody.

The activity has to be additive

Suppose a token launches on an Elysium AMM and a buyer pushes its price above the same asset's best offer on HyperCore. An arbitrageur buys on HyperCore and sells into the Elysium AMM until the gap closes.

That trade can pay three parts of the stack:

• Elysium collects gas and sequencer revenue.

• HyperCore records more spot volume and fees, contributing to HYPE burn.

• Fifty percent of Elysium sequencer revenue is supposed to buy KNTQ on the open market.

At $1 million in sequencer revenue, the announced split would send $250,000 to builders, $250,000 to the treasury and $500,000 to KNTQ purchases. If the applications behind those fees also caused $100 million of genuinely new HyperCore trading, Hyperliquid would earn on activity it would not otherwise have seen.

Gross activity would exaggerate the result if that $100 million merely moved from an existing HyperCore interface into Elysium and returned through arbitrage. Extra hops are not new demand.

The load-bearing measurement is incremental HyperCore flow attributable to external capital entering through Elysium.

Transaction count and Elysium TVL cannot answer that on their own. A useful dashboard would separate outside deposits from capital already on Hyperliquid, third-party applications from Kinetiq-owned products, organic fees from incentives, and new HyperCore flow from volume that migrated between interfaces.

Eric's Elysium thesis also points to native USDC. It could be backed by USDC on HyperEVM and contribute to the parent's quote-asset economics. His Base-sized example exceeds $110 million per year, though it is a scenario rather than a forecast. Elysium has no live native USDC balance, and the asset alone will not make users choose the chain.

KNTQ captures value after users arrive

Kinetiq routes revenue from several products into KNTQ. According to the current KNTQ documentation, buybacks receive 70% of protocol revenue, the validator-commission share, disposable Markets income, part of Launch revenue and eventually 50% of Elysium sequencer revenue. Purchased tokens go to Hyperliquid's Assistance Fund, where they are treated as permanently removed from circulation.

Buybacks sit downstream of demand: a 50% share of zero remains zero. The rest of sequencer revenue goes to builders and the treasury, which have to fund the products and liquidity that keep users around. The market comes first; buybacks record the outcome.

What evidence would change the case

The first useful signals are outside deposits, third-party applications, repeat users and fees traceable to new HyperCore flow. Kinetiq can bootstrap the market; unaffiliated builders and capital will show whether it can become independent. Retention after incentives fade matters more than a launch-week transaction chart.

There is now one named prospective application: Montra says it is coming to Elysium. The announcement is a builder signal. Public contracts, attributable users and liquidity were not visible in this refresh.

Phase 2 needs a public demonstration as well. A contract should read useful HyperCore depth, produce an intent, place an order through a replaceable trade-only agent and receive a reliable callback. The relevant latency runs from intent to resting order rather than from transaction submission to an Elysium receipt.

The public testnet makes the trust model easier to inspect, though large gaps remain. The docs expose bridge addresses, while the public GitHub organization has recent hl-rs activity but no Elysium implementation. Elysium-specific audits, named data-availability members and production controls are not public. Mainnet is still expected to start with a single sequencer, permissioned validation and an AnyTrust committee.

That posture is reasonable for a testnet, but live market-making capital needs more. An outage may preserve custody while leaving a market maker unable to cancel stale orders.

The current read

Elysium has a stronger reason to launch an L2 than the usual claim that the existing chain is too expensive. Kinetiq can seed it with products and relationships that most new chains lack, while phase two could combine programmable capital with HyperCore execution.

If new assets, outside capital and independent applications begin on Elysium and keep returning, the chain becomes a genuine distribution layer for HyperCore. Activity confined to Kinetiq products, recycled Hyperliquid capital and temporary incentives could still produce transactions and buybacks, but it would not establish Elysium as a market users choose.

The decisive number will not be Elysium TPS. It will be how much new HyperCore business arrived because Elysium existed.

Data and public materials reviewed through 29 September 2026. Elysium's public testnet is live; mainnet and the phase-two HyperCore read/write edge remain pre-launch. The 29 September explorer values were partial and may continue to change.