Kinetiq launched Elysium, Hyperliquid's first L2, built to offer the throughput HyperEVM deliberately lacks. Day one showed real demand, but the chain still has to turn that into lasting demand while a large KNTQ vesting schedule approaches.
Elysium, the first L2 on Hyperliquid, processed nearly 10 million transactions within hours of launch, according to Kinetiq co-founder Omnia. Blocks landed every 50–90 milliseconds, and infrastructure provider Conduit briefly rate-limited traffic in the first five minutes.
Why Hyperliquid wanted another chain
Hyperliquid runs on two layers: HyperCore, which handles the order books, and HyperEVM, which handles smart contracts. Because the two share consensus, HyperEVM's throughput is capped so heavy contract activity never slows HyperCore's order books.
That cap protects the exchange but limits the EVM. Elysium targets 300 million gas per second, roughly 100x HyperEVM's capacity, while it settles to HyperEVM and uses HYPE for gas.
What is live at launch
The launch lineup includes Aero, Nest, and Uniswap on the DeFi side. Ascend, fomo, and Pump.fun give traders memecoin launchpads and portals.
Activity on the chain also feeds KNTQ. Half of Elysium's sequencer fees buy KNTQ and send it to Hyperliquid's Assistance Fund, which permanently removes it from supply. A quarter goes to builders, and the remainder goes to Kinetiq's treasury.
A bigger expansion is still ahead. An upgrade expected in about four weeks will let Elysium apps read and write to HyperCore's order books.
The bull case and the supply test
Trader KoolKrypto argues that Elysium could attract trading flow from Solana, which handles 25–50x the spot volume of Hyperliquid's onchain layers, partly because HyperEVM is too slow for professional market makers. He also says HyperEVM fees are under 1% of Hyperliquid's revenue, so HYPE loses almost nothing if Elysium absorbs them.
However, KoolKrypto concedes that a memecoin season could pump fees and then die. Starting Nov. 27, roughly 310 million contributor and investor KNTQ begin vesting over two years, with monthly releases equivalent to about 4% of today's circulating supply.
Offsetting that supply will take more than a short-lived rush of memecoin trading. Elysium has to show that its added capacity enables applications that go beyond what HyperCore already offers.
Source: Bankless
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