Kinetiq Boosts Hyperliquid Trading Speed with Elysium L2

Kinetiq has announced the launch of Elysium L2, a high-performance trading layer for Hyperliquid's ecosystem. This new Layer 2 chain aims to improve the existing execution environment by providing faster block times and higher throughput. The gas token used on Elysium will be HYPE.

Elysium is designed as a purpose-built execution environment for trading, targeting features such as spot trading, automated market makers called PropAMMs, token launches, and perpetual contracts. The chain also plans to introduce native oracles built on optimized Layer 1 precompiles, allowing for faster and cheaper data feeds for DeFi applications.

The launch of Elysium is a response to the growing demand for better trading execution on Hyperliquid's existing infrastructure. With Kinetiq controlling approximately 82.5% of the liquid staking market, its position makes it a natural candidate to build this fix. The deflationary loop tied directly to chain usage will see half of all sequencer fees flow into KNTQ buybacks and burns.

The use of HYPE as the gas token rather than launching a new chain-specific token keeps demand for HYPE intact and avoids fragmenting the ecosystem's token economy. This move is expected to create a second major demand driver beyond the core perpetuals product for HYPE holders, while KNTQ holders will benefit from the deflationary pressure.