IOTA Co-Founder Calls for Industry Unity Amid Hyperliquid Transparency Dispute

• Crypto innovators must “work together to bring more users onchain,” says IOTA founder Dominik Schiener.
• Schiener was responding to a recent saga that questioned Hyperliquid’s transparency and integrity, claiming it was short on collateral.

The crypto ecosystem must learn to work together and prioritize shared progress, instead of battling for dominance, IOTA founder Dominik Schiener has cautioned.

In his response to an ongoing scandal where the leading decentralized trading protocol Hyperliquid has been accused of lacking financial integrity, Schiener noted that the real enemy is the legacy systems.

“This hostility won’t get us any further to achieving our goals and making crypto better,” the IOTA founder posted on X.

His views were echoed by many, including one crypto advisor who commented that “if half of the energy used for toxic competition between DEXs were used towards acquiring new CEX users, the world would be moving faster towards a decentralized future.”

IOTA Founder Steps In as DEX Wars Escalate

Schiener was responding to Vladimir Novakovski, the founder of Lighter, a zk-rollup perpetual futures trading platform built on Ethereum, and one of the rising Hyperliquid rivals. Novakovski had poked holes at Hyperliquid’s detailed explanation on X regarding its financial health.

Hyperliquid dismissed the widely shared insolvency claims, stating that every dollar is accounted for.

“Hyperliquid is more transparent and decentralized than all other major venues for perps trading. The entire state is independently maintained by a permissionless validator set and verified through BFT proof-of-stake consensus by each node,” it added.

One of the main claims was that the Hyperliquid network was undercollateralized by $326 million. However, according to the network, the accusers had failed to include the HyperEVM USDC in their calculations.

Other allegations included claims that some users enjoy special privileges such as fee exemptions, that some admins can move user funds without signatures, and that the chain can be frozen. Hyperliquid dismissed all these allegations as baseless.

But not everyone was convinced, and Novakovski took to X to take shots at Hyperliquid, stating:

Hyperliquid remains one of the largest decentralized trading protocols in the world, and the recent allegations have not made any serious dent in its market position. A recent report by Cantor Fitzgerald projects the project to keep growing into a $200 billion ecosystem that generates over $5 billion in annual fees, as CNF reported.

IOTA trades at $0.08263, shedding over 5% in the past day to bring its losses this month to 29%.

HYPE has also been on a downtrend in the past month, dropping 24% to trade at $24.3 at press time.