Kinetiq Unveils Elysium: A Layer 2 Protocol for Hyperliquid

Kinetiq has announced Elysium, a Layer 2 protocol for Hyperliquid, to address the network's high gas fees and slow transaction confirmations. This move comes after Kinetiq addressed liquidity issues with its liquid staking protocol on Hyperliquid, which currently has a TVL of approximately $1.214 billion.

Elysium will use HYPE as gas and continue to operate within the Hyperliquid ecosystem. The new network aims to provide faster transaction processing times, with block speeds several orders of magnitude higher than HyperEVM at launch. In the long term, Kinetiq plans to achieve block times approaching those of HyperCore.

Elysium also seeks to enhance market making and trading on Hyperliquid by providing richer market depth and fresher quotes through an extended L1Read precompiled contract. This will allow developers to read more levels of the order book and create a seamless experience for traders.

Kinetiq's token, KNTQ, has a separate value capture mechanism, with 25% allocated to applications consuming block space, 25% to the treasury, and 50% to repurchasing tokens from the market and burning them. The company views PropAMM as one of the first types of applications Elysium aims to attract, which rely on proprietary market makers' capital to provide quotes.