ZachXBT Slams Hyperliquid’s Centralized Governance
ZachXBT criticizes Hyperliquid’s inconsistent responses, highlighting flaws in its centralized governance model.
- Hyperliquid accused of showing double standards in handling protocol incidents
- ZachXBT points to inconsistent intervention after the Radiant hack
- Suggestions include decentralization or preventive mechanisms like PPOI
Inconsistent Decisions Raise Questions
Blockchain investigator ZachXBT has called out Hyperliquid for what he describes as “double standards” in its decision-making process, exposing the platform’s centralized governance model. The criticism stems from Hyperliquid’s varying responses to major incidents — particularly its handling of the Radiant hack, where it claimed to be “powerless,” compared to its more recent willingness to take action in other situations.
The inconsistency has sparked broader concerns about the lack of transparent and predictable governance on the platform. For a protocol that markets itself within the decentralized finance (DeFi) space, centralized control raises questions about trust and fairness.
The Governance Dilemma: Act, Abstain, or Evolve?
ZachXBT laid out three possible pathways for Hyperliquid moving forward:
- Maintain Active Intervention with Consistency: If the platform chooses to intervene during critical incidents, it must do so reliably and transparently. Selective intervention erodes user confidence and exposes the protocol to reputational risk.
- Fully Decentralize Governance: By decentralizing its governance structure, Hyperliquid can shift decision-making power to the community. This would reduce the risk of arbitrary interventions and align the protocol more closely with core DeFi principles.
- Prevent Attacks at the Entry Point: Adopting models like Railgun’s PPOI (Proof of Proper Interaction) could prevent bad actors from entering the system in the first place. Such mechanisms serve as proactive filters, reducing the need for after-the-fact governance decisions.
Each of these options carries trade-offs in terms of control, risk management, and operational complexity. But one thing is clear: a lack of consistency undermines the protocol’s credibility.
The Path Forward
As Hyperliquid grows, its governance model will likely face increased scrutiny. In a space where decentralization is a core value, centralized or opaque governance decisions can alienate users and invite backlash. The protocol’s next move — whether it embraces transparency, decentralizes, or adopts new safeguards — will be crucial for its long-term trust and adoption.
