Kinetiq's Elysium L2 Launches to Boost HyperEVM and Hyperliquid Activity

Kinetiq protocol has launched Elysium L2, a Layer 2 solution designed to optimize the HyperEVM architecture and drive spot market activity across Hyperliquid's infrastructure.

Elysium aims to address performance bottlenecks in the current environment, including throughput limitations, transaction fee spikes during demand peaks, and a dual-block structure that splits operations between small fast blocks and larger slow blocks.

The solution will operate as a high-speed EVM environment directly connected to HyperCore, using HYPE as its native token for gas fee payments. This direct integration could significantly reduce latency in order transmission.

Kinetiq's new initiative comes amid a period of contraction across the core liquid staking market. The total value locked (TVL) of kHYPE recorded an additional drop of nearly 18% over the past four weeks, following a 62% decrease in circulating kHYPE compared to August 2025.

The tokenomics framework for Elysium mandates that 50% of sequencer fees will be used to buy back KNTQ on the open market for burning. The remaining 50% of fees will be split equally between the Kinetiq treasury and developer incentives.