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Hyperliquid Faces Backlash Over Centralization Issues, HYPE Token Drops 15%
Crypto-News.net – January 8, 2025
The cryptocurrency community has been left reeling following allegations of centralization and lack of transparency leveled against Hyperliquid. The platform’s validator structure has come under intense scrutiny, with several prominent figures in the space calling out the project for its overly centralized design.
According to sources close to the matter, it appears that validators have taken issue with the current setup, which allows those involved in the initial testnet phase to maintain their positions without any new entrants. This, combined with the notion that some seats are allegedly available for purchase, has sparked widespread criticism and concern about the long-term viability of the project.
In response to these allegations, Hyperliquid’s team has issued a statement clarifying its validator model. According to this statement, each validator earned their position solely on the basis of performance during the testnet phase, and that no seats are available for purchase.
Despite the controversy, Hyperliquid remains committed to decentralization, outlining plans to expand the validator set as the blockchain matures. The project has also announced a Foundation Delegation Program aimed at supporting high-level validators and fostering a more decentralized ecosystem.
Additionally, Hyperliquid’s team has addressed concerns regarding its API server, stating that it is capable of running servers pointing to any node, contradicting centralization claims. Furthermore, the project has committed to open-sourcing its code once development is deemed stable and secure.
The platform’s response appears aimed at quelling fears about its future and reassuring users of its commitment to transparency and decentralization. However, as the controversy continues to escalate, it remains unclear whether Hyperliquid can successfully overcome these criticisms and maintain user trust.
Meanwhile, the market has reacted swiftly to the backlash, with HYPE token experiencing a 15% drop in value.
Source: www.crypto-news.net
