On August 24, the Kinetiq protocol for liquid staking announced the launch of Elysium, a new Layer 2 network designed for the Hyperliquid ecosystem. This initiative aims to enhance the capacity of HyperEVM while simplifying the launch of spot markets, tokens, and DeFi applications.
— Kinetiq (@Kinetiq_xyz) August 24, 2026
In Elysium, HYPE will be utilized for gas fees. The team plans to integrate this solution directly with the HyperCore trading engine, enabling applications to access its liquidity and order book data.
Details regarding technical specifications and a list of partners will be revealed later. While the exact launch date remains unspecified, Kinetiq indicated that it will occur "soon."
Boosting HyperEVM Performance
Elysium was developed in response to the limitations of HyperEVM. Kinetiq highlighted issues such as low throughput, increased fees during peak loads, and a two-block architecture.
At launch, the block production speed and transaction processing capabilities of the L2 network are expected to significantly surpass those of HyperEVM. The team aims to further align these metrics with HyperCore in the future.
The enhancements are primarily targeted at applications requiring frequent state updates, including high-frequency spot trading, automated market makers (AMM), and other DeFi services.
Additionally, the team plans to broaden application access to HyperCore data. Currently, smart contracts on HyperEVM mainly obtain the best buy and sell prices through the L1Read mechanism. In Elysium, developers will have access to more comprehensive order book data and real-time quotes.
From Token Launch to Futures
The introduction of the new asset within the Hyperliquid ecosystem is being organized in multiple phases. The team needs to first establish primary liquidity in HyperEVM, then launch the token on the HyperCore spot market, and finally implement perpetual futures using the HIP-3 mechanism.
Elysium proposes to streamline this process. The coin will initially gain liquidity through AMM, subsequently enter the HyperCore spot order book, and later move to the perpetual contracts market via HIP-3.
Half of Sequencer Revenue to Burn KNTQ
Kinetiq also unveiled a revenue distribution model for Elysium. Half of the sequencer fees are planned to be allocated for purchasing KNTQ on the open market, followed by token burns through the Hyperliquid Assistance Fund.
Another 25% will be distributed to developers of applications utilizing Elysium's block space, while the remaining 25% will go to Kinetiq's treasury.
This new network aims to expand the project's business beyond HYPE liquid staking. The main product of the protocol remains kHYPE, a token that users receive after locking their Hyperliquid coins, which can then be utilized in DeFi.
It’s worth noting that in June, the exchange increased its open interest volume to $10 billion, ranking as the third-largest platform for perpetual futures trading.