Kinetiq has unveiled Elysium, an upcoming Layer 2 network built for the Hyperliquid ecosystem that will use HYPE as its native gas asset and target higher-performance execution for spot trading, token launches and decentralized finance applications. Announced on August 24, Elysium is designed to address performance constraints encountered by applications operating through HyperEVM while maintaining close connectivity with Hyperliquid’s existing trading infrastructure.
The network has not yet launched its production mainnet, making Elysium an upcoming addition rather than an already operational Hyperliquid L2. Kinetiq said Elysium will use HYPE to pay transaction fees instead of introducing a separate gas token. That should allow users moving between HyperCore, HyperEVM and Elysium to continue using the same asset for network execution while creating another source of utility for HYPE. Elysium is being developed by Kinetiq, the liquid-staking protocol behind kHYPE and one of the largest DeFi applications in the Hyperliquid ecosystem.
Elysium Targets Spot Markets and HIP-3 Perpetuals
Elysium is intended to provide a higher-performance EVM execution environment while retaining access to Hyperliquid’s liquidity and market data. A key component will be an expanded version of Hyperliquid’s L1Read precompile, which currently enables HyperEVM smart contracts to access information from HyperCore. Kinetiq plans to expose more detailed HyperCore data through Elysium rather than limiting applications primarily to information such as the best bid and offer. That infrastructure is particularly relevant for PropAMMs, or proprietary automated market makers. Kinetiq expects applications to use richer order-book information to calculate prices and hedge positions against liquidity available through HyperCore.
The broader objective is to create an integrated trading lifecycle in which assets can launch through long-tail automated market makers, graduate into more sophisticated PropAMMs, establish HyperCore spot order books and eventually support perpetual futures through Hyperliquid’s HIP-3 infrastructure. Elysium will also provide native oracle functionality derived from Hyperliquid data. The design therefore positions Elysium less as a general-purpose competitor to HyperEVM and more as a specialized execution environment optimized around trading and DeFi.
Half of Sequencer Fees Will Buy and Burn KNTQ
Elysium also introduces a direct economic connection between network activity and Kinetiq’s KNTQ token. Kinetiq plans to allocate 50% of all sequencer fees generated by Elysium toward programmatic purchases of KNTQ on the open market. Those acquired tokens will then be sent to the Hyperliquid Assistance Fund and permanently burned, creating a mechanism through which increased Elysium usage could reduce circulating KNTQ supply. Another 25% of sequencer revenue will be distributed to applications consuming Elysium blockspace. Developers will be able to use that allocation for rebates, incentives or other application-level expenses.
The remaining 25% will flow to the Kinetiq treasury. The structure creates two separate token roles. HYPE provides the network’s gas and transaction-execution asset, while KNTQ captures part of the economic value generated through sequencer activity. Using HYPE rather than creating another gas token could also strengthen the relationship between Elysium and the broader Hyperliquid economy. HyperEVM already uses HYPE for gas, meaning Elysium extends an existing utility rather than introducing the concept for the first time. The announcement arrives as Hyperliquid itself is experiencing rapid growth. HYPE recently reached record highs above $80, while Hyperliquid’s Builder Codes ecosystem recorded $984 million of perpetual volume in a single day.
Regulatory expectations have also improved after President Donald Trump said CFTC Chairman Michael Selig was working on a pathway to bring Hyperliquid into the United States in a compliant manner. Elysium’s significance will ultimately depend on execution. Its promised performance improvements, developer adoption and ability to generate sustainable trading liquidity cannot be measured until the network is operational. But the architecture gives Kinetiq a broader role in Hyperliquid than liquid staking alone: Elysium would provide an additional execution layer designed to turn growing Hyperliquid trading activity into demand for HYPE, developer revenue and systematic KNTQ buybacks.
