Q2 2026 Hyperion DeFi Inc Earnings Call

August 12, 2026

Operator 3: Greetings. Welcome to the Hyperion DeFi 2026 second quarter earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to Jason Assad, Director of Investor Relations. Thank you. You may begin.

Operator: Greetings. Welcome to the Hyperion DeFi 2026 second quarter earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to Jason Assad, Director of Investor Relations. Thank you. You may begin.

Speaker #1: Please note this conference is being recorded. I will now turn the conference over to Jason Assad, Director of Investor Relations. Thank you. You may begin.

Speaker #2: Good afternoon. Welcome to Hyperion DeFi’s 2026 second quarter earnings call. Joining me today are CEO Hyunsu Jung and CFO David Knox. Before we get started, please note that our remarks today may include forward-looking statements.

Jason Assad: Good afternoon, and welcome to Hyperion DeFi's 2026 Q2 earnings call. Joining me today are CEO Hyunsu Jung and CFO David Knox. Before we get started, please note that our remarks today may include forward-looking statements. These statements are subject to risks and uncertainties, and actual results may differ materially. During this call, we may use words like anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project, and similar expressions which indicate forward-looking statements. For a more comprehensive discussion of these and other risks, please refer to our filings with the SEC available on sec.gov and in the IR section of our website at hyperiondefi.com. We will also reference certain non-GAAP financial measures today. Please refer to our earnings release and earnings supplement on the website for a full reconciliation of these non-GAAP measures to the most comparable GAAP measures.

Speaker #2: These statements are subject to risks and uncertainties, and actual results may differ materially. During this call, we may use words like "anticipate," "could," "enable," "estimate," "intend," "expect," "believe," "potential," "will," "should," "project," and similar expressions, which indicate forward-looking statements.

Speaker #2: For a more comprehensive discussion of these and other risks, please refer to our filings with the SEC available on sec.gov and in the IR section of our website at hyperiondefy.com.

Speaker #2: We'll also reference certain non-GAAP financial measures today. Please refer to our earnings release and earnings supplement on the website for a full reconciliation of these non-GAAP measures to the most comparable GAAP measures.

Speaker #2: We'll start this afternoon's call with prepared remarks from Hyunsu and David, followed by Q&A. I'll now turn the call over to our CEO, Hyunsu Jung.

Jason Assad: We will start this afternoon's call with prepared remarks from Hyunsu and David, followed by Q&A. I will now turn the call over to our CEO, Hyunsu Jung.

Speaker #3: Thank you, Jason. To those joining us today, welcome to Hyperion Defy's second quarter 2026 earnings call. A little over a year ago, Hyperion Defy was born from what was formerly EYENOVIA.

Hyunsu Jung: Thank you, Jason. To those joining us today, welcome to Hyperion DeFi's Q2 2026 earnings call. A little over a short year ago, Hyperion DeFi was born from what was formerly Eyenovia. What once was is no longer. At Hyperion DeFi, we revamped the company's operating strategy to the accumulation of HYPE and directly building in the Hyperliquid ecosystem. We made a firm commitment that we would be more than just HYPE, benefiting from not just holding the asset, but uniquely building multiple business atop it that have the potential to utilize it profitably, and most importantly, independent of its underlying price volatility. I am proud to say that we are continuing to deliver on that promise. To that end, our focus has been on developing unique products and services that actively support the growth of the Hyperliquid ecosystem and return that value to our shareholders.

Speaker #3: What once was is no longer. As Hyperion DeFi, we revamped the company's operating strategy to focus on the accumulation of hype and directly building in the Hyperliquid ecosystem.

Speaker #3: We made a firm commitment that we would be more than just hype: benefiting not just from holding the asset, but uniquely by building multiple businesses atop it that have the potential to utilize it profitably and, most importantly, independent of its underlying price volatility.

Speaker #3: I'm proud to say that we are continuing to deliver on that promise. To that end, our focus has been on developing unique products and services that actively support the growth of the Hyperliquid ecosystem, and return that value to our shareholders.

Speaker #3: Our model is no longer a concept that we ask investors to envision; it has become reality. We continue to lead in designing and deploying strategies that generate differentiated revenues not just on our hype holdings, but across key on-chain infrastructure.

Hyunsu Jung: Our model is no longer a concept that we ask investors to envision. It has become reality. We continue to lead in designing and deploying strategies that generate differentiated revenues, not just on our HYPE holdings, but across key on-chain infrastructure, each compounding alongside the fastest-moving ecosystem in the digital asset space. I am most excited to share these developments, covering not just what was accomplished in Q2, but the updates that are happening in real time, which we believe demonstrates our standalone positioning, unique value proposition, and best-in-class business model. At the same time, this was a quarter that truly tested our model. With rapid innovation often comes changes that are challenging to predict and requires a level of adaptivity that can only be found in an agile operation like ours.

Speaker #3: Each compounding, alongside the fastest-moving ecosystem in the digital asset space. I am most excited to share these developments, covering not just what was accomplished in Q2, but the updates that are happening in real time, which we believe demonstrate our standalone positioning, unique value proposition, and best-in-class business model.

Speaker #3: At the same time, this was a quarter that truly tested our model. With rapid innovation often comes changes that are challenging to predict, and requires a level of adaptivity that can only be found in an agile operation like ours.

Speaker #3: To address this directly, in May of this year, USDH, the native stablecoin of hyperliquid, was replaced with USDC. Resulting in the wind-down of two of our core hype deployments, accounting for $800,000 hype and impacting our planned revenue roadmap.

Hyunsu Jung: To address this directly, in May of this year, USDH, the native stablecoin of Hyperliquid, was replaced with USDC, resulting in the wind down of two of our core HYPE deployments, accounting for 800,000 HYPE and impacting our planned revenue roadmap. Regardless, the ability for an operating company to respond to change in real time is exactly what distinguishes it from a passive vehicle. We are proud to have been able to respond and adapt within weeks and enter the Q3 with stronger, more durable platforms, which we will cover today. I am grateful for the continued support of our investors and partners as we work diligently to lay foundations that persist and scale with the growth of Hyperliquid. What we are doing has never been done before, and we firmly believe we are asymmetrically positioned to accomplish this, resulting in long-term value creation for our shareholders.

Speaker #3: Regardless, the ability for an operating company to respond to change in real time is exactly what distinguishes it from a passive vehicle. We are proud to have been able to respond and adapt within weeks, and enter the third quarter with stronger, more durable platforms, which we will cover today.

Hyunsu Jung: We are proud to have been able to respond and adapt within weeks and enter the Q3 with stronger, more durable platforms, which we will cover today. I am grateful for the continued support of our investors and partners as we work diligently to lay foundations that persist and scale with the growth of Hyperliquid. What we are doing has never been done before, and we firmly believe we are asymmetrically positioned to accomplish this, resulting in long-term value creation for our shareholders.

Speaker #3: I'm grateful for the continued support of our investors and partners as we work diligently to lay foundations that persist and scale with the growth of hyperliquid.

Speaker #3: What we’re doing has never been done before, and we firmly believe we are asymmetrically positioned to accomplish this, resulting in long-term value creation for our shareholders.

Speaker #3: I will start, as always, with the hyperliquid ecosystem. Hyperion's opportunity surface scales with hyperliquid's execution, and this is one of the most consequential quarters in the ecosystem's history.

Hyunsu Jung: I will start, as always, with the Hyperliquid ecosystem. Hyperion's opportunity surface scales with Hyperliquid's execution, and this is one of the most consequential quarters in the ecosystem's history. We saw Hyperliquid cross a milestone that few blockchains have ever approached. Cumulative protocol revenue surpassed $1 billion, with the overwhelming majority of protocol fees continuing to be returned to the token holders through the assistance fund's buyback mechanism. During the quarter, HYPE reached a new all-time high, and the holder base has continued to broaden, especially with institutions via the launch of various HYPE ETFs. This broader global adoption was accelerated by the continued growth of HIP-3 builder-deployed markets. The permissionless perpetuals framework for real-world assets now represents over half of daily network trading activity, and the deployer set continues to institutionalize.

Speaker #3: We saw hyperliquid cross a milestone that few blockchains have ever approached. Cumulative protocol revenue surpassed $1 billion with the overwhelming majority of protocol fees continuing to be returned to the token holders through the assistance funds buyback mechanism.

Hyunsu Jung: Cumulative protocol revenue surpassed $1 billion, with the overwhelming majority of protocol fees continuing to be returned to the token holders through the assistance fund's buyback mechanism. During the quarter, HYPE reached a new all-time high, and the holder base has continued to broaden, especially with institutions via the launch of various HYPE ETFs. This broader global adoption was accelerated by the continued growth of HIP-3 builder-deployed markets. The permissionless perpetuals framework for real-world assets now represents over half of daily network trading activity, and the deployer set continues to institutionalize.

Speaker #3: During the quarter, HYPE reached a new all-time high, and the holder base has continued to broaden, especially with institutions via the launch of various HYPE ETFs.

Speaker #3: This broader global adoption was accelerated by the continued growth of HIP-3 builder-deployed markets. The permissionless perpetuals framework of for real-world assets now represents over half of daily network trading activity, and the deployer set continues to institutionalize.

Speaker #3: The core team's progress on unified accounts continues, moving the network toward a single account for spot, perpetuals, and outcome exposure. We're already seeing the impacts of this design.

Hyunsu Jung: The core team's progress on unified accounts continues, moving the network toward a single account for spot, perpetuals, and outcome exposure. We are already seeing the impacts of this design. Just earlier this week, xStocks, the tokenized equity framework built by Payward, the parent company of Kraken, launched native spot equity markets on HyperCore, enabling on-chain trading for five major equities and ETFs backed one to one by real shares. The tokenized assets include NVIDIA, the S&P 500 ETF, QQQ, SK hynix, and Micron. This allows on-chain traders to not only access spot equity markets 24/7, but also the ability to use these assets as collateral for DeFi on the HyperEVM, where we have spent an extensive amount of time building institutional infrastructure.

Speaker #3: Just earlier this week, XDOX, the tokenized equity framework built by Payward, the parent company of Kraken, launched native spot equity markets on Hypercore, enabling on-chain trading for five major equities and ETFs, backed one-to-one by real shares.

Speaker #3: The tokenized assets include Nvidia, the S&P 500 ETF, QQQ, SK Hynix, and Micron. This allows on-chain traders to not only access spot equity markets 24/7, but also the ability to use these assets as collateral for DeFi on the Hyper-EVM.

Speaker #3: Where we have spent an extensive amount of time building institutional infrastructure. And perhaps most exciting is that hyperliquid's newest primitive, HIP-4 outcome markets, completed its first full quarter on mainnet.

Hyunsu Jung: Perhaps most exciting is that Hyperliquid's newest primitive, HIP-4 outcome markets, completed its first full quarter on mainnet. Launched in May, Outcome Markets generated approximately $100 million in volume in the first month alone and validated the value and structural advantage of a unified financial layer. Outcome contracts on Hyperliquid trade on the same order book in the same account with materially lower fees at market midpoints than incumbent prediction market venues. In late July, subsequent to quarter end, permissionless HIP-4 deployment reached testnet. Under the framework, each outcome market deployer must stake 500,000 HYPE for the duration of activity. Every new market category on Hyperliquid now creates structural locked demand for the core asset on our balance sheet, which grants us continued opportunities for deployment optimization.

Speaker #3: Launched in May, outcome markets generated approximately $100 million in volume in the first month alone, and validated the value and structural advantage of a unified financial layer.

Speaker #3: Outcome contracts on Hyperliquid trade on the same order book in the same account, with materially lower fees at market midpoints than incumbent prediction market venues.

Speaker #3: In late July, subsequent to quarter end, permissionless HIP-4 deployment reached testnet. Under the framework, each outcome market deployer must stake $500,000 HYPE for the duration of activity.

Speaker #3: Every new market category on hyperliquid now creates structural, locked demand for the core asset on our balance sheet, which grants us continued opportunities for deployment optimization.

Speaker #3: Each of these developments compounds the others as hyperliquid continues to execute its vision of becoming the blockchain to house all finance. In parallel, Hyperion continues to position ourselves as the premier institutional gateway to DeFi innovation within hyperliquid.

Hyunsu Jung: Each of these developments compounds the others as Hyperliquid continues to execute its vision of becoming the blockchain to house all finance. In parallel, Hyperion continued to position ourselves as the premier institutional gateway to DeFi innovation within Hyperliquid. In this quarter, we focused on repositioning our DeFi monetization strategy following the sunset of USDH and a clearer path to permissionless deployment on HIP-4. May was a massive month for Hyperliquid as the ecosystem aligned with Coinbase and Circle on the CCTP V2 standard, establishing the path for 90% of the USDC stablecoin revenue to flow back to the Hyperliquid Assistance Fund, ultimately returning value to HYPE holders. Although it greatly benefits our balance sheet holdings, the resulting sunset of USDH created unexpected headwinds for our operating businesses.

Speaker #3: In this quarter, we focused on repositioning our DeFi monetization strategy, following the sunset of USDH, in a clearer path to permissionless deployment on HIP-4.

Speaker #3: May was a massive month for Hyperliquid, as the ecosystem aligned with Coinbase and Circle on the AQA v2 standard, establishing the path for 90% of the USDC stablecoin revenue to flow back to the Hyperliquid Assistance Fund, ultimately returning value to HYPE holders.

Speaker #3: Although it greatly benefits our balance sheet holdings, the resulting sunset of USDH created unexpected headwinds for our operating businesses. As we announced in June, Native Markets made the decision to sunset USDH, and the Felix Exchange markets also wound down as settlement across Hyperliquid migrated towards USDC.

Hyunsu Jung: As we announced in June, Native Markets made the decision to sunset USDH, and the Felix Exchange markets also winded down as settlement across Hyperliquid migrated towards USDC. We reiterated our guidance at the time of that announcement, and we reiterate it again today because the financial impact was immaterial, manageable, and our strategic response was swift. This is the nature of operating in a fast-moving ecosystem. Individual products will come and go. What endures is our position as a partner builders come to first, and that position was demonstrated within weeks. Just after quarter end, we announced our agreement with Skew Technologies to launch permissionless markets on Hyperliquid, including an institutional listing service. With Hyperliquid's recent HIP-4 announcements in July, we and the Skew team have determined that Hyperion's 500,000 HYPE stake would be better positioned for HIP-4 outcome markets.

Speaker #3: We reiterated our guidance at the time of that announcement, and we reiterated again today. Because the financial impact was immaterial, manageable, and our strategic response was swift.

Speaker #3: This is the nature of operating in a fast-moving ecosystem. Individual products will come and go. What endures is our position as a partner builders come to first, and that position was demonstrated within weeks.

Hyunsu Jung: What endures is our position as a partner builders come to first, and that position was demonstrated within weeks. Just after quarter end, we announced our agreement with Skew Technologies to launch permissionless markets on Hyperliquid, including an institutional listing service. With Hyperliquid's recent HIP-4 announcements in July, we and the Skew team have determined that Hyperion's 500,000 HYPE stake would be better positioned for HIP-4 outcome markets.

Speaker #3: Just after quarter end, we announced our agreement with SKU Technologies to launch permissionless markets on hyperliquid, including an institutional listing service. With hyperliquid's recent HIP-4 announcements in July, we and the SKU team have determined that Hyperion's $500,000 hype stake would be better positioned for HIP-4 outcome markets.

Speaker #3: This structure succeeds and strengthens our permissionless market strategy, pairing our staked HYPE deployment capacity with a team purpose-built for onboarding new market categories to Hyperliquid.

Hyunsu Jung: This structure succeeds and strengthens our permissionless market strategy, pairing our staked HYPE deployment capacity with a team purpose-built for onboarding new market categories to Hyperliquid. We expect these markets to go live in the coming months with economics that improve upon our prior deployer arrangement, in addition to long-term equity and token exposure to Skew. The early metrics are positive, with over 40,000 unique users signed up to access Skew's private beta. We also announced today as part of this release, another house agreement with 500,000 of our staked HYPE supporting Entropy, an upcoming HIP-3 deployer. Not only does this provide Hyperion multiple opportunities to both support and scale unique businesses on Hyperliquid, but it allows us to converge the building blocks we are developing alongside our partners in this ecosystem.

Speaker #3: We expect these markets to go live in the coming months, with economics that improve upon our prior deployer arrangement, in addition to long-term equity and token exposure to SKU.

Speaker #3: The early metrics are positive, with over 40,000 unique users signed up to access SKU's private beta. But we didn't stop at just one new permissionless markets deployment.

Hyunsu Jung: The early metrics are positive, with over 40,000 unique users signed up to access Skew's private beta. We also announced today as part of this release, another house agreement with 500,000 of our staked HYPE supporting Entropy, an upcoming HIP-3 deployer. Not only does this provide Hyperion multiple opportunities to both support and scale unique businesses on Hyperliquid, but it allows us to converge the building blocks we are developing alongside our partners in this ecosystem.

Speaker #3: We also announced today, as part of this release, another house agreement with $500,000 of our staked hype supporting Entropy, an upcoming HIP-3 deployer. Not only does this provide Hyperion multiple opportunities to both support and scale unique businesses on hyperliquid, but it allows us to converge the building blocks we are developing alongside our partners in this ecosystem.

Speaker #3: Hyperliquid aims to become the blockchain to house all finance, offering a unified substrate for all forms of financial products, including RWAs, perpetuals, outcomes, and more.

Hyunsu Jung: Hyperliquid aims to become the blockchain to house all finance, offering a unified substrate for all forms of financial products, including RWAs, perpetuals, outcomes, and more. I wrote at the beginning of the year that tokenization and the adoption of agentic trading would be key components of driving more financial activity on chain, and that has continued to be the case. Note, for instance, according to The state of Hybrid Finance 2026 report from CoinShares and Token Terminal, deposits into lending platforms and DEXs more than tripled year over year to $7.4 billion, driven by utilization of RWAs such as tokenized Treasuries, private credit, and gold tokens as collateral. We had long been preparing for this shift to occur.

Speaker #3: I wrote at the beginning of the year that tokenization and the adoption of agentic trading would be key components of driving more financial activity on-chain, and that as continued to be the case.

Speaker #3: Note, for instance, according to the state of hybrid finance report from CoinShares and Token Terminal, deposits into lending platforms and DEXs more than tripled year over year, to 7.4 billion dollars, driven by utilization of RWAs such as tokenized treasuries, private credit, and gold tokens as collateral.

Speaker #3: We had long been preparing for this shift to occur. Early in the third quarter, we completed our first institutional credit deal through the HyperLens AVA platform, lending $1 million USDC against natively staked HYPE at a rate of 8% APY—far above the overnight rate found in traditional markets.

Hyunsu Jung: Early in Q3, we completed our first institutional credit deal through HyperLend Avia platform, lending 1 million USDC against natively staked HYPE at a rate of 8% APY, far above the overnight rate found in traditional markets. The HYPE collateral remains in secure custody at Anchorage Digital for the duration of the loan. We expect the Avia platform to scale as demand grows for institutional borrowing and lending against robust collateral, and we are entitled to a revenue share on a portion of future activity on Avia. The value of natively staked HYPE continues to be demonstrated as our HYPE Asset Use Service scaled across other clients. Silhouette completed its migration to production during the quarter, and we saw monthly volumes step up from the hundreds of thousands toward over $40 million cumulative, consistent with the trajectory we outlined in May.

Speaker #3: The Hype collateral remains in secure custody at Anchorage Digital for the duration of the loan. We expect the AVA platform to scale as demand grows for institutional borrowing and lending against robust collateral, and we are entitled to a revenue share on a portion of future activity on AVA.

Hyunsu Jung: We expect the Avia platform to scale as demand grows for institutional borrowing and lending against robust collateral, and we are entitled to a revenue share on a portion of future activity on Avia. The value of natively staked HYPE continues to be demonstrated as our HYPE Asset Use Service scaled across other clients. Silhouette completed its migration to production during the quarter, and we saw monthly volumes step up from the hundreds of thousands toward over $40 million cumulative, consistent with the trajectory we outlined in May.

Speaker #3: In the value of natively staked hype continues to be demonstrated, as our hype asset use service scaled across other clients. Silhouette completed its migration into production during the quarter, and we saw monthly volume step up from the hundreds of thousands toward over $40 million cumulative, consistent with the trajectory we outlined in May.

Speaker #3: This was driven by Silhouette's support for RFQ trading, which we expect to accelerate on Hyperliquid as more assets become tokenized and move on-chain. While positioning for this shift, we maintain our pipeline of prospective house clients and continue to be selective, prioritizing structures that return durable, volume-linked value to our supported markets.

Hyunsu Jung: This was driven by Silhouette's support for RFQ trading, which we expect to accelerate on Hyperliquid as more assets become tokenized and move on-chain. While positioning for this shift, we maintain our pipeline of prospective house clients and continue to be selective, prioritizing structures that return durable, volume-linked value to our supported markets. Yield enhancement saw over 50% growth this quarter, supported by HYPE's realized volatility remaining elevated throughout the quarter, including the run to new all-time highs in June and subsequent consolidation. Our systematic approach focused on converting volatility into income. The program continued to operate within the disciplined risk framework we have described previously: position caps, strike selection anchored to technical structure, and no compromise of our long-term HYPE position.

Speaker #3: Yield enhancement saw over 50% growth this quarter. Supported by hype's realized volatility remaining elevated throughout the quarter. Including the run to new all-time highs in June and subsequent consolidation.

Hyunsu Jung: Yield enhancement saw over 50% growth this quarter, supported by HYPE's realized volatility remaining elevated throughout the quarter, including the run to new all-time highs in June and subsequent consolidation. Our systematic approach focused on converting volatility into income. The program continued to operate within the disciplined risk framework we have described previously: position caps, strike selection anchored to technical structure, and no compromise of our long-term HYPE position.

Speaker #3: Our systematic approach focused on converting volatility into income. The program continued to operate within the disciplined risk framework we have described previously, positioned caps, strike selection, anchored to technical structure, and no compromise of our long-term hype position.

Speaker #3: As we operate those strategies internally, we continue to work in parallel with our efforts to expand yield infrastructure built on risk, our partner in offering institutional-grade vault strategies known as Risk Premium.

Hyunsu Jung: As we operate those strategies internally, we continue to work in parallel with our efforts to expand yield infrastructure built on Rysk, our partner in offering institutional-grade vault strategies known as Risk Premium. As a result of these efforts, our accumulated Risk Points continue to grow this quarter, placing us in the top 50 holders and preserving our claim on future protocol incentives. Risk Premium launched publicly in June, bringing institutional-grade covered call and cash-secured puts vaults fully on-chain, while also expanding their smart contract infrastructure to Ethereum Mainnet, demonstrating the ability of our partners to not only succeed in Hyperliquid, but also distribute products cross-chain. In addition, Rysk announced support for XAUT, Tether Gold, which is a digital token backed by physical gold, showing the first steps towards support of broader RWAs. We are optimistic for and await rulemaking for on-chain markets, crypto vaults, and blockchain settlement infrastructure.

Speaker #3: As a result of these efforts, our accumulated risk points continue to grow this quarter, placing us in the top 50 holders and preserving our claim on future protocol incentives.

Speaker #3: Risk Premium launched publicly in June, bringing institutional-grade covered call and cash secured puts vaults, fully on-chain, while also expanding their smart contract infrastructure to Ethereum mainnet.

Speaker #3: Demonstrating the ability of our partners to not only succeed in Hyperliquid, but also distribute products across chain. In addition, Risk announced support for XAUT, Tether Gold, which is a digital token backed by physical gold, showing the first steps toward support of broader RWAs.

Speaker #3: We are optimistic for and await rulemaking for on-chain markets, crypto vaults, and blockchain settlement infrastructure. We expect additional clarity for on-chain vaults to be critical to driving more institutional adoption of strategies such as Risk Premium, and with further guidance would be positioned to open up our vault strategies to other depositors and curators, expanding the availability of our on-chain infrastructure.

Hyunsu Jung: We expect additional clarity for on-chain vaults to be critical to driving more institutional adoption of strategies such as Risk Premium, and with further guidance, we position to open up our vault strategies to other depositors and curators, expanding the availability of our on-chain infrastructure. Ecosystem rewards remain variable, but we maintain a positive outlook for the ecosystem tokens we will receive through the remainder of the year. As mentioned earlier, our ecosystem engagement efforts have expanded beyond token representation of the protocols we believe have long-term potential. Hyperion DeFi has now acquired equity positions to various protocols for the benefit of our shareholders. We continue to deliver on another core objective: to create long-term value for the Hyperliquid ecosystem while simultaneously providing streamlined and comprehensive access to all the valuable components built there.

Speaker #3: Ecosystem rewards remain variable, but we maintain a positive outlook for the ecosystem tokens we will receive through the remainder of the year. As mentioned earlier, our ecosystem engagement efforts have expanded beyond token representation of the protocols we believe have long-term potential.

Speaker #3: Hyperion DeFi has now acquired equity positions to various protocols for the benefit of our shareholders. We continue to deliver on another core objective, to create long-term value for the hyperliquid ecosystem while simultaneously providing streamlined, comprehensive access to all the valuable components built there.

Speaker #3: Lastly, on our Hyperion Validator operations, in June, we announced our partnership with BlockDamon to expand institutional hyperliquid staking. BlockDamon is trusted by more than 400 institutions and this partnership opens an additional channel to the institutional hype delegation demand we expect as hyperliquid's profile grows.

Hyunsu Jung: Lastly, on our Hyperion validator operations, in June, we announced our partnership with Blockdaemon to expand institutional Hyperliquid staking. Blockdaemon is trusted by more than 400 institutions, and this partnership opens an additional channel to the institutional HYPE delegation demand we expect as Hyperliquid's profile grows. Perhaps more importantly, we continue to explore opportunities to generate income by building on top of our existing infrastructure. One that is beginning to emerge is a way to leverage our validator infrastructure to provide data services for traders on Hyperliquid. We will share more as things are finalized. If it hasn't been clear by now, we will continue to build and pioneer on-chain, uniquely positioning our assets and designing partnerships unlike any other team in this space. Opportunities that didn't exist three months ago are real now. Imagine the possibilities of what may come as Hyperliquid continues to dominate on-chain finance.

Speaker #3: Perhaps more importantly, we continue to explore opportunities to generate income by building on top of our existing infrastructure. One that is beginning to emerge is a way to leverage our validator infrastructure to provide data services for traders on hyperliquid.

Speaker #3: We will share more as things are finalized. If it hasn't been clear by now, we will continue to build and pioneer.

Speaker #1: Or on chain , uniquely positioning our assets and designing partnerships unlike any other team in this space Opportunities that didn't exist three months ago are real now Imagine the possibilities of what may come as hyper liquid continues to dominate on chain finance .

Speaker #1: I'll now hand it over to our CFO, David Knox, to give highlights on our financial performance.

Hyunsu Jung: I'll now hand it over to our CFO, David Knox, to give highlights on our financial performance.

Speaker #2: Thank you . Hyunsu Jung In June of 2025 , we set out to establish a new kind of company , one which is blockchain and DeFi native and shares in multiple frontiers of value creation at the same time Those three frontiers include our growing hype treasury , our scalable DeFi businesses , and our embedded economic upside in the hyper liquid ecosystem .

David Knox: Thank you, Hyunsu. In June of 2025, we set out to establish a new kind of company, one which is blockchain and DeFi-native, and shares in multiple frontiers of value creation at the same time. Those three frontiers include our growing HYPE treasury, our scalable DeFi businesses, and our embedded economic upside in the Hyperliquid ecosystem, and we call this our HYPEd Triple Dip strategy. In our 12 months of operating performance, we have redefined what it means to be a digital asset treasury. Not only have we substantially grown our treasury position in HYPE, but we have launched multiple businesses and built new products and services on Hyperliquid, all while reducing our costs over time. As promised since day one, we are well on our way to becoming a profitable, positive cash flowing operating company by year-end. Here's our 12-month highlights.

Speaker #2: And we call this our Hype Triple Dip strategy. In our 12 months of operating performance, we have redefined what it means to be a digital asset.

Speaker #2: Treasury . Not only have we substantially grown our Treasury position in hype , but we have launched multiple businesses and built new products and services on hyper liquid .

Speaker #2: All while reducing our costs over time . As promised , since day one , we are well on our way to becoming a profitable , positive , cash flowing , operating company by year end Here's our 12 month highlights .

Speaker #2: Since June of 2025, our gross hyped tokens have increased 56%, from 1.31 million to 2.04 million tokens, from Q3 '25 to Q2 '26.

David Knox: Since June of 2025, our gross HYPE tokens have increased 56%, from 1.31 million to 2.04 million HYPE tokens. From Q3 2025 to Q2 2026, our quarterly adjusted gross profit has grown 162%, from $0.4 million to $1.2 million as our DeFi businesses have begun to ramp. We have consistently earned two to three times base HYPE staking yield over several quarters. Meanwhile, our core operating expenses have declined 46%, from $4.3 million to $2.3 million as our legacy biotech segment has been wound down. Also, our quarterly operating cash outflows have declined from $2.8 million to $2.1 million, both as a function of reduced costs and ramping DeFi businesses. Our adjusted gross profit over the past two quarters has been 40% to 50% denominated in cash. We've received equity or token upside in four early-stage builders on Hyperliquid, including Kinetic, HyperLend, Silhouette, and Skew.

Speaker #2: Our quarterly adjusted gross profit has grown 162% , from 0.4 million to $1.2 million . As our DeFi businesses have begun to ramp We have consistently earned 2 to 3 times base hype , staking yield over several quarters Meanwhile , our core operating expenses have declined 46% from 4.3 million to $2.3 million .

Speaker #2: As our legacy biotech segment has been wound down, our quarterly operating cash outflows have declined from $2.8 million to $2.1 million, both as a function of reduced costs and ramping DeFi businesses.

Speaker #2: Our adjusted gross profit over the past two quarters has been 40 to 50% , denominated in cash , and we've received equity or token upside in for early stage builders on hyper liquid , including kinetic hyper land silhouette and skew We are also pleased to announce today that we executed a sale of our remaining biotech IP assets to Arctic Vision in July Our promise on our first call was that we would pursue the monetization and resolution of certain .

David Knox: We are also pleased to announce today that we executed a sale of our remaining biotech IP assets to Arctic Vision in July. Our promise on our first call was that we would pursue the monetization and resolution of certain no-longer core assets, and that is now accomplished. From July 2025 through July 2026, in total, we extinguished $2.7 million of legacy biotech liabilities, not from us paying down liabilities with cash, but from actively working with partners, including Arctic Vision, to release what we owed without cash consideration. With the past behind us, we are now solely a DeFi company. Now on to our Q2 results. Our Q2 adjusted gross profit grew 20% quarter-over-quarter from $960,000 to $1.2 million. 50% was earned in cash, and we achieved 2.2x base staking yield. The 20% quarterly growth rate in Q2 compares to 17% growth achieved in Q1 versus Q4.

Speaker #2: No longer core assets , and that is now accomplished from July 2025 through July 2026 . In total , we extinguished $2.7 million of legacy biotech liabilities not from us paying down liabilities with cash , but from actively working with partners , including Arctic Vision , to release what we owed without cash consideration .

Speaker #2: With the past behind us , we are now solely a DeFi company Now on to our Q2 results . Our Q2 adjusted gross profit grew 20% quarter over quarter from 960 zero zero dollars to $1.2 million , 50% was earned in cash , and we achieved 2.2 X base staking yield The 20% quarterly growth rate in Q2 compares to 17% growth achieved in Q1 versus Q4 this quarter demonstrated the benefit of our five diversified DeFi income sources , where headwinds in some areas were offset by tailwinds in others and the overall growth trajectory remains positive I'll now go through each of those five segments , starting with staking yield in Q2 , we earned $527,000 from staking our hike to our kinetic X Hyperion validator .

David Knox: This quarter demonstrated the benefit of our five diversified DeFi income sources, where headwinds in some areas were offset by tailwinds in others, and the overall growth trajectory remains positive. I will now go through each of those five segments. Starting with staking yield. In Q2, we earned $527,000 from staking our HYPE to our Kinetiq x Hyperion validator. This was up 69% quarter-over-quarter, driven by the increase in the price of HYPE from an average of $0.308 over Q1 to $0.512 over Q2. Next, validator commissions. In Q2, we earned $42,000 in validator commissions from third-party tokens delegated to our validator, up 4% versus $40,000 last quarter. In Q2, consistent with Q1, we continue from a GAAP perspective to present our validating activities on a net basis in accordance with the treatment that we are agent of the validator.

Speaker #2: This was up 69% quarter over quarter , driven by the increase in the price of hype from an average of 30.8 over Q1 to 51.2 over Q2 Next validator commissions in Q2 , we earned $42,000 in validator commissions from third party tokens delegated to our validator , up 4% versus $40,000 last quarter .

Speaker #2: In Q2, consistent with Q1, we continue, from a GAAP perspective, to present our validating activities on a net basis and in accordance with the treatment that we are agents of the validator.

Speaker #2: As mentioned , we recently announced a partnership with Block Demon , one of the largest institutional crypto platforms , where they have chosen us to be their staking partner on hyper liquid We continue to see multiple opportunities for validator growth , driven by the products and services we are creating , plus demand from institutions for world class validator infrastructure In total , in Q2 , we earned about 11,000 tokens from staking and validating in line with what we earned in Q1 Next , our yield enhancement strategies , which primarily monetize volatility on hype , including in our vault with risk generated $334,000 of adjusted gross profit in Q2 , which is plus 58% quarter over quarter versus $211,000 in Q1 .

David Knox: As Hyunsu mentioned, we recently announced a partnership with Blockdaemon, one of the largest institutional crypto platforms, where they have chosen us to be their staking partner on Hyperliquid. We continue to see multiple opportunities for validator growth driven by the products and services we are creating, plus demand from institutions for world-class validator infrastructure. In total in Q2, we earned about 11,000 HYPE tokens from staking and validating, in line with what we earned in Q1. Next, our yield enhancement strategies, which primarily monetize volatility on HYPE, including in our vault with Rysk, generated $334,000 of adjusted gross profit in Q2, which is +58% quarter-over-quarter versus $211,000 in Q1. Our DeFi monetization segment captures a host of products and services we are building on Hyperliquid together with our partners.

Speaker #2: Our defined monetization segment captures a host of products and services we are building on hyper liquid , together with our partners . This quarter , we had a 36% decline in DeFi monetization from 245,000 in Q1 to $158,000 in Q2 , largely driven by the sunset of the USD .

David Knox: This quarter, we had a 36% decline in DeFi monetization from $245,000 in Q1 to $158,000 in Q2, largely driven by the sunset of the USDH stablecoin announced in mid-May, resulting in our house agreements with both Native Markets and Felix being terminated in June and opening up 800,000 of our HYPE tokens to be redeployed into other business opportunities. While we still earned base staking yield on these 800,000 tokens, these wind downs resulted in a Q2 decline in DeFi monetization. Despite this headwind, in June, we chose to announce that we stood by our existing guidance based on our robust pipeline to redeploy our HYPE. As outlined by Hyunsu, we have regained momentum since then. We have already redeployed 1 million HYPE tokens into new house partnerships in Q3, and we expect our new deployments over time to position us better than before.

Speaker #2: Stablecoin announced in mid-May , resulting in a house agreements with both native markets and Felix being terminated in June and opening up 800 000 of our tokens to be redeployed into other business opportunities .

Speaker #2: While we still earned base staking yield on these 800,000 tokens , these win downs resulted in a Q2 decline in defined monetization Despite this headwind in June , we chose to announce that we stood by our existing guidance based on our robust pipeline to redeploy our hype , as outlined by Hyunsu Jung .

Speaker #2: We have regained momentum since then. We have already redeployed 1 million tokens into new house partnerships in Q3, and we expect our new deployments over time to position us better than before.

Speaker #2: And finally , ecosystem rewards generated $90,000 of adjusted gross profit in Q2 versus $150,000 in Q1 . We stated previously that we expect the quarter over quarter change in ecosystem rewards to be volatile , given the unexpected timing of airdrops , token generation events , and other rewards activity However , this is now the third consistent quarter of activity in the segment , and it continues to be a core part of our triple dip strategy .

David Knox: Ecosystem rewards generated $90,000 of adjusted gross profit in Q2 versus $150,000 in Q1. We stated previously that we expect the quarter-over-quarter change in ecosystem rewards to be volatile given the unexpected timing of airdrops, token generation events, and other rewards activity. However, this is now the third consistent quarter of activity in this segment, and it continues to be a core part of our triple dip strategy. The Q2 figure reflects two pieces. First, our receipt and subsequent sale of MAX tokens received in an airdrop. Second, a one-time grant from Felix denominated in USDC due to the sunset of USDH. We are also announcing that as part of the July house agreement with Skew, we have the right in the future to 5% of Skew equity and 5% of tokens should they choose to pursue a Skew TGE.

Speaker #2: The Q2 figure reflects two pieces . First , our receipt and subsequent sale of Max tokens received in an AirDrop Second , a one time grant from Felix denominated in Usdc due to the USD We are also announcing that as part of the July House agreement with SKU , we have the right .

Speaker #2: In the future to 5% of SKU equity and 5% of tokens should they choose to pursue a SKU , tge Our list of ecosystem positions we've accumulated over the past year continues to grow in Q4 .

David Knox: Our list of ecosystem positions we have accumulated over the past year continues to grow. In Q4, we received 1.92 million KMTQ tokens from Kinetic. Since then, we have been liquid staking our KMTQ recently at annual yields exceeding 7% and have accrued over 40,000 additional KMTQ tokens thus far in 2026. Since we continue to earn Kinetic points, we expect to be eligible for their next airdrop, which has been announced for Q4 of this year. In Q1, we received 10 million HPL tokens from HyperLend as part of our various partnerships previously discussed. In Q1, we also gained the right to receive 1% future token or equity in Silhouette. We are also earning Risk points from our vault activity and may become eligible for future Rysk tokens. We expect this list to continue to grow as we deepen our partnerships and relationships across the Hyperliquid ecosystem.

Speaker #2: We received 1.92 million CMTC tokens from Kinetic. Since then, we have been liquid staking our KNC, recently at annual yields exceeding 7%, and have accrued over 40,000 additional KNC tokens thus far in 2026.

Speaker #2: Since we continue to earn kinetic points , we expect to be eligible for their next airdrop , which has been announced for Q4 of this year .

Speaker #2: In Q1, we received 10 million HPL tokens from Hyperland as part of our various partnerships, as previously discussed in Q1. We also gained the right to receive 1% of future tokens or equity in Silhouette.

David Knox: In Q1, we received 10 million HPL tokens from HyperLend as part of our various partnerships previously discussed. In Q1, we also gained the right to receive 1% future token or equity in Silhouette. We are also earning Risk points from our vault activity and may become eligible for future Rysk tokens. We expect this list to continue to grow as we deepen our partnerships and relationships across the Hyperliquid ecosystem.

Speaker #2: We are also earning risk points from our vault activity and may become eligible for future risk tokens, and we expect this list to continue to grow as we deepen our partnerships and relationships across the HyperLiquid ecosystem.

Speaker #2: And as a reminder , we didn't pay anything for these tokens . We have only paid for hype , and we believe the upside we have to the broader hyper liquid ecosystem is unique among any other U.S.

David Knox: As a reminder, we did not pay anything for these tokens. We have only paid for HYPE, and we believe the upside we have to the broader Hyperliquid ecosystem is unique among any other US public company. Moving on to our Q2 expenses. Operating expenses, excluding stock-based compensation, declined 21% quarter over quarter, from $3.0 million in Q1 to $2.3 million in Q2. As a reminder, the Q2 figure of $2.3 million is about half the $4.3 million we spent in Q3 2025, our first quarter since adopting the new DeFi strategy. The reduced costs speak to our light operating model, offering strong earnings leverage. We substantially wound down all operations related to our legacy biotech segment in the second quarter. With the past behind us, we continue to be laser-focused on all cost components as our DeFi businesses evolve and scale.

Speaker #2: public company Moving on to our Q2 expenses , operating expenses excluding stock based compensation declined 21% quarter over quarter from 3.0 million in Q1 to $2.3 million in Q2 As a reminder , the Q2 figure of 2.3 million is about half the 4.3 million we spent in Q3 2025 .

Speaker #2: Our first quarter since adopting the new DeFi strategy. The reduced costs speak to our light operating model, offering strong earnings leverage. We substantially wound down all operations related to our legacy biotech segment in the second quarter.

Speaker #2: With the past behind us, we continue to be laser-focused on all cost components as our DeFi businesses evolve and scale. On the Treasury side, our gross type tokens increased from 1.94 million in Q1 to 2.04 million in Q2. The price of hype increased from 36.6 at the end of Q1 to 65.0 in Q2.

David Knox: On the treasury side, our gross HYPE tokens increased from 1.94 million in Q1 to 2.04 million in Q2. The price of HYPE increased from 36.6 at the end of Q1 to 65.0 in Q2. This compares to our aggregate purchase price on HYPE tokens of 39.7, meaning the value of our HYPE treasury at $133 million as of Q2 exceeded our cash basis of $81 million by approximately $52 million. Our net asset value, which adjusts our treasury value for net cash and debt, increased from $70 million as of Q1 to $134 million as of Q2. Treasury gains was $54.8 million in Q2 as the price of HYPE increased, versus a gain of $21.5 million in Q1. In totality, Q2 net income of $31.0 million, another record for the company, compares to Q1 net income of $8.8 million.

Speaker #2: This compares to our aggregate purchase price on Hype tokens of $39.7 million, meaning the value of our Hype Treasury at $133 million as of Q2 exceeded our cash basis of $81 million by approximately $52 million.

Speaker #2: Our net asset value , which adjusts our Treasury value for net cash and debt , increased from $70 million as of Q1 to $134 million as of Q2 .

Speaker #2: Treasury gains was $54.8 million in Q2 as the price of hype increased versus a gain of $21.5 million in Q1 . In totality , Q2 net income of $31.0 million .

Speaker #2: Another record for the company, compared to Q1 net income of $8.8 million. Q2 adjusted EBITDA was $53.7 million, compared to Q1 adjusted EBITDA of $19.5 million.

David Knox: Q2 adjusted EBITDA of $53.7 million compares to Q1 adjusted EBITDA of $19.5 million. As of Q1, the primary Q2 reconciliation of net income to adjusted EBITDA is our HYPE liquid staking tokens, or LSTs, for which the GAAP carrying value is the low water mark price of HYPE. If all our HYPE LSTs were converted back to HYPE at the end of Q2, we believe that would have increased our GAAP net income by approximately $33.2 million. Regarding our cash flows and cash position, as a DeFi company, we have been and expect to continue to be very active with on-chain stablecoin activity, which involves USDC, historically USDH, deposits into our vault, and potentially other activity in the future as we grow. However, stablecoin-based balances and activities are not presented as GAAP cash, and this has caused some period-to-period volatility in our GAAP presentations of cash flows.

Speaker #2: As with Q1 , the primary Q2 reconciliation of net income to adjusted EBITDA is our hype . Liquid staking LSTs , for which the GAAP carrying value is the low water price of hype .

Speaker #2: If all our hype LSTs were converted back to hype at the end of Q2 , we believe that would have increased our GAAP net income by approximately $33.2 million .

Speaker #2: Regarding our cash flows and cash position as a DeFi company , we have been and expect to continue to be very active with on chain , stablecoin activity , which involves Usdc historically used deposits into our vault and potentially other activity in the future as we grow However , stablecoin based balances and activities are not presented as GAAP cash , and this has caused some period to period volatility in our GAAP presentments of cash flows Starting today , we are now also presenting two new non-GAAP metrics adjusted net operating cash flow and net investing , cash flow .

David Knox: Starting today, we are now also presenting two new non-GAAP metrics, adjusted net operating cash flow and adjusted net investing cash flow, with the goal of removing the volatility caused by our stablecoin forward operations. These are all more fully defined and reconciled in our earnings release and earnings supplement available online. Adjusted net operating cash flow was $2.1 million of outflows in Q2, which compares to $2.6 million outflows in Q1. Adjusted net investing cash flow was $6.2 million in Q2 versus $1.5 million in Q1 as we continue to grow our HYPE treasury position. Net cash provided by financing activities was $11.0 million in Q2, primarily from our May public offering, versus $6.6 million in Q1. As of Q2, we hold $11.8 million in cash equivalents, and stablecoins versus $9.1 million as of Q1.

Speaker #2: With the goal of removing the volatility caused by our stablecoin forward operations. These are all more fully defined and reconciled in our earnings release and earnings supplement, available online. Adjusted net operating cash flow was $2.1 million of outflows in Q2, compared to $2.6 million of outflows in Q1.

Speaker #2: Adjusted net investing , cash flow was $6.2 million in Q2 , versus $1.5 million in Q1 . As we continue to grow our hive treasury position , net cash provided by financing activities was 11.0 million in Q2 , primarily from our May public offering versus $6.6 million in Q1 as of Q2 .

David Knox: Adjusted net investing cash flow was $6.2 million in Q2 versus $1.5 million in Q1 as we continue to grow our HYPE treasury position. Net cash provided by financing activities was $11.0 million in Q2, primarily from our May public offering, versus $6.6 million in Q1. As of Q2, we hold $11.8 million in cash equivalents, and stablecoins versus $9.1 million as of Q1.

Speaker #2: We hold $11.8 million in cash , cash equivalents , and stablecoins , versus $9.1 million as of Q1 As of August 10th , our common share count is approximately 15.5 million shares Looking ahead in our first earnings call under the new DeFi strategy in November 2025 , along with our ambitious goal to create a new kind of operating company , we set out ambitious financial goals , which we continue to stand behind as we innovate and grow our businesses We originally gave guidance of 4 million to $6 million of adjusted gross profit for 2026 , and raised that guidance in May to 5 million to $7 million .

David Knox: As of 10 August, our common share count is approximately 15.5 million shares. Looking ahead, in our first earnings call under the new DeFi strategy in November 2025, along with our ambitious goal to create a new kind of operating company, we set out ambitious financial goals, which we continue to stand behind as we innovate and grow our businesses. We originally gave guidance of $4 million to $6 million of adjusted gross profit for 2026 and raised that guidance in May to $5 million to $7 million. In addition, we anticipate our adjusted net operating cash flow to flip positive by the end of the year, and that is what we have been communicating since day one. We continue to be confident in achieving that guidance based on our delivery of consistent quarterly performance, including growing businesses, declining costs, and improving cash flows.

Speaker #2: In addition , we anticipate our adjusted net operating cash flow to flip positive by the end of the year , and that's what we have been communicating since day one .

David Knox: In addition, we anticipate our adjusted net operating cash flow to flip positive by the end of the year, and that is what we have been communicating since day one. We continue to be confident in achieving that guidance based on our delivery of consistent quarterly performance, including growing businesses, declining costs, and improving cash flows.

Speaker #2: We continue to be confident in achieving that guidance based on our delivery of consistent quarterly performance , including growing businesses , declining costs and improving cash flows We believe we have the right team partners and resources and the right chosen blockchain in hyper liquid to achieve these goals Every day we remain squarely focused on continued execution , driving value for shareholders over time while helping to build hyper liquid into the blockchain to house all of finance as Junsu said earlier , our model is no longer a concept that we ask investors to envision .

David Knox: We believe we have the right team, partners, and resources, and the right chosen blockchain in Hyperliquid to achieve these goals. Every day, we remain squarely focused on continued execution, driving value for shareholders over time while helping to build Hyperliquid into the blockchain to house all of finance. As Hyunsu Jung said earlier, our model is no longer a concept that we ask investors to envision. It has become a reality that stands alone among public companies. We believe the results will continue to speak for themselves. With that, we look forward to answering your questions.

David Knox: As Hyunsu Jung said earlier, our model is no longer a concept that we ask investors to envision. It has become a reality that stands alone among public companies. We believe the results will continue to speak for themselves. With that, we look forward to answering your questions.

Speaker #2: It has become a reality that stands alone among public companies. We believe the results will continue to speak for themselves. With that, we look forward to answering your questions.

Speaker #3: We will now be conducting a question and answer session . If you would like to ask a question , please press star one on your telephone keypad .

Operator 3: We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from Gareth Casetta with Cantor. Please proceed with your question.

Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from Gareth Casetta with Cantor. Please proceed with your question.

Speaker #3: The confirmation tone will indicate your line is in the question queue . You may press star two . If you would like to remove your question from the queue for participants using speaker equipment , it may be necessary to pick up your handset before pressing the star keys .

Speaker #3: One moment, please, while we poll for questions. Our first question is from Gareth Casetta with Cantor. Please proceed with your question.

Speaker #4: Hey guys , thanks for taking the question . You were very quick to kind of reallocate your horse deployments to skew in entropy So I was wondering if you could talk about how much of a ramp you're expecting from those new deployments in the back half of this year .

Gareth Casetta: Hey, guys. Thanks for taking the question. You were very quick to reallocate your HAUS deployments to Skew and Entropy. I was wondering if you could talk about how much of a ramp you are expecting from those new deployments in the back half of this year, and if any of that might be baked into guidance. Also, how we should think about the pipeline going forward, if you guys have any additional HYPE sitting idle to do more deployments or if you would have to find a new allocation for that.

Gareth Gacetta: Hey, guys. Thanks for taking the question. You were very quick to reallocate your HAUS deployments to Skew and Entropy. I was wondering if you could talk about how much of a ramp you are expecting from those new deployments in the back half of this year, and if any of that might be baked into guidance. Also, how we should think about the pipeline going forward, if you guys have any additional HYPE sitting idle to do more deployments or if you would have to find a new allocation for that.

Speaker #4: And if any of that might be baked into guidance And then also how we should think about the pipeline going forward , if you guys have any additional hype kind of sitting idle to do more deployments , or if you would have to kind of find a new allocation for that Hey , Gareth .

Hyunsu Jung: Hey, Gareth. Thanks for the questions. I would say that one of our core functions is to continuously have conversations with teams that are either directly building on or looking to come to build on Hyperliquid. A large part of our ability to pivot so quickly was maintaining those relationships and ensuring that our diligence was robust to ensure that these were the right products to launch through our deployment product HAUS. We expect them to ramp relatively quickly with Skew. Their institutional listing service that we are calling partner markets is designed to onboard more bespoke products that are not yet listed on Hyperliquid and have them trading relatively quickly. That is obviously contingent upon the roadmap for permissionless HIP-4. With Entropy, HIP-3 is already live, and we expect the team to start very quickly.

Speaker #1: Thanks for the questions . So I would say that our , one of our core functions is to continuously have conversations with teams that are either directly building on or looking to come to build on hyper liquid .

Speaker #1: And a large part of our ability to pivot so quickly was maintaining those relationships and ensuring that our diligence was robust to ensure that these were the right products to launch through our deployment product house We expect them to ramp relatively quickly with SKU .

Hyunsu Jung: We expect them to ramp relatively quickly with Skew. Their institutional listing service that we are calling partner markets is designed to onboard more bespoke products that are not yet listed on Hyperliquid and have them trading relatively quickly. That is obviously contingent upon the roadmap for permissionless HIP-4. With Entropy, HIP-3 is already live, and we expect the team to start very quickly.

Speaker #1: The Institutional Listing Service that we're calling Partner Markets is designed to onboard more bespoke products that are not yet listed on HyperLiquid and have them trading relatively quickly.

Speaker #1: And that's obviously contingent upon the roadmap for permissionless HIV for . And then with entropy . HIV three is already live , and we expect that the team to start very , very quickly .

Speaker #1: We have actually staked the 500,000 HYPE today, and we'll be working on getting the deployment deployer set up in terms of the longer-term roadmap for this year.

Hyunsu Jung: We have actually staked the 500,000 HYPE today, and it will be working on getting the deployer set up. In terms of the longer-term roadmap for this year, we want to see these teams scale their revenues and obviously directly contributing to Hyperion DeFi. We will continue to have conversations either through our listing service or bespoke deployments for individual permissionless markets.

Speaker #1: We want to see these teams scale their revenues, and obviously directly contribute to Hyperion. We'll continue to have conversations, either through our Listing Service or bespoke deployments for individual permissionless markets.

Speaker #4: Great . Thank you . And then just a quick one on your validator business , I'm wondering if you could provide how much of the 11.1 K total hype you guys earned was from the validator business ?

Gareth Casetta: Great. Thank you. Just a quick one on your validator business. I am wondering if you could provide how much of the 11.1K total HYPE you guys earned was from the validator business. Did you guys see any uplift from the early days of the integration with Blockdaemon. How are you thinking about potential future integrations?

Gareth Gacetta: Great. Thank you. Just a quick one on your validator business. I am wondering if you could provide how much of the 11.1K total HYPE you guys earned was from the validator business. Did you guys see any uplift from the early days of the integration with Blockdaemon. How are you thinking about potential future integrations?

Speaker #4: And did you guys see any uplift from the early days of the integration with block , Damon ? And how are you thinking about potential future integrations

Speaker #2: Thanks so much for the question , Gareth In terms of the the commissions earned from validating and isolation , it was it was about 500 tokens from validating , meaning the majority of our tokens earned in hive .

David Knox: Thanks so much for the question, Gareth. In terms of the commissions earned from validating in isolation, it was about 500 tokens from validating, meaning the majority of our tokens earned in HYPE were from our own native staking. The partnership with Blockdaemon, while announced, is expected to ramp throughout the quarter and into next. I think that the platform that we have set up, we believe to be world-class for a number of reasons, right? Kinetic is the number 1 liquid staking protocol on Hyperliquid, which means that it is functionally attractive for multiple reasons. The partner that we have on the infrastructure side, Pier Two, who is purchased by MAVAN, owned by Bitmine Immersion Technologies, one of the largest players in validating across multiple blockchains and a very large player among institutions.

Speaker #2: Were from our own native staking the the partnership with block Damon , while announced , is expected to ramp throughout the quarter and into next .

Speaker #2: And I think that the the platform that we have set up , we believe to be a world class for a number of reasons .

Speaker #2: Right Kinetic is the number one liquid staking protocol on hyper liquid , which means that it's functionally attractive for for multiple reasons . And the partner that we have on the infrastructure side , pier two , who is purchased by Maven , owned by Bitmain , one of the largest players in validating across multiple blockchains and a very , very large player among institutions .

David Knox: Kinetic is the number one liquid staking protocol on Hyperliquid, which means that it is functionally attractive for multiple reasons. The partner that we have on the infrastructure side, Pier Two, who is purchased by MAVAN, owned by Bitmine Immersion Technologies, one of the largest players in validating across multiple blockchains and a very large player among institutions.

Speaker #2: And essentially , what happens , and this is what happened with block , Damon , you know , like every other financial service product institutions really care about who they're working with , why they're working with them .

David Knox: Essentially what happens, and this is what happens with Blockdaemon, like every other financial service product, institutions really care about who they are working with, why they are working with them. They care about the track record, the compliance, the reporting, of course, economics and overall reliability and dependability. Blockdaemon is just the first institutional partnership that we have, and we are expecting others to follow. It is part of the broader trend on Hyperliquid more broadly, where, of course, it has achieved such a large market share of overall crypto activity and financial activity, but so much is still not yet accomplished of institutional adoption. When that shifts, even more balances will flow, even more institutions and other participants will be active. We think and we believe, and core to our thesis is that they will want to be active with world-class institutions such as ourselves.

Speaker #2: They care about the track record , the compliance , the reporting . Of course , economics and overall reliability and dependability and blockchain is just the first institutional partnership that we have .

Speaker #2: And we are expecting others to follow . And it's part of the broader trend on hyper liquid more broadly , where , of course , it's achieved such a large market share of overall crypto activity and financial activity .

Speaker #2: But so much is still not accomplished in terms of institutional adoption. And when that shifts even more, balances will flow and even more institutions and other participants will be active.

Speaker #2: We think , and we believe in core to our thesis , is that they will want to be active with world class institutions such as ourselves

Speaker #4: Awesome. Thanks for the color, guys, and good quarter.

Gareth Casetta: Awesome. Thanks for the color, guys, and good quarter.

Gareth Gacetta: Awesome. Thanks for the color, guys, and good quarter.

Speaker #2: Thank you . Garrett

Hyunsu Jung: Thank you, Gareth.

Speaker #3: Our next question is from Brian Vitan with Siebert. Please proceed with your question.

Operator 3: Our next question is from Brian P. Vieten with Siebert. Please proceed with your question.

Operator: Our next question is from Brian P. Vieten with Siebert. Please proceed with your question.

Speaker #5: All right . Thanks , guys . A nice job at the summit in July . I was able to catch it online . Sorry I missed it , but , you know , in the past , you guys spoke to hype for , you know , it's kind of a potentially larger opportunity than hype .

Brian P. Vieten: All right. Thanks, guys. A nice job at the summit in July. I was able to catch it online. Sorry I missed it. But in the past, you guys spoke to HIP-4 as kind of a potentially larger opportunity than HIP-3. Is that still how you guys see it?

Speaker #5: Three—is that still how you guys see it?

Speaker #1: Hey , Brian , great to great to hear from you . Yeah , absolutely . We think that the trend I mean , there's there's obviously so much that's going on right now , both in the political sphere and the financial sphere with regards to prediction markets , perpetuals and the changing nature of financial systems .

Hyunsu Jung: Hey, Brian. Great to hear from you. Yeah, absolutely. We think that the trend. There is obviously so much that is going on right now, both in the political sphere and the financial sphere with regards to prediction markets, perpetuals, and the changing nature of financial systems moving on-chain. But net-net, we think that there are so many ways to not only directionally express beliefs through markets and prediction markets or outcome markets captures that the best. And the advantage with Hyperliquid as a unified settlement layer for all financial services or systems is the fact that you will be able to not only access spot for perpetuals and outcome markets all in that same settlement layer.

Speaker #1: Moving on chain . But net net , we think that there are so many ways to not only directionally express beliefs through markets and prediction markets or outcome markets , captures that the best and the advantage with hyper liquid as a unified sediment layer for all financial , financial services or systems is the fact that you will be able to not only access spot for perpetuals and outcome markets all in that same settlement layer .

Speaker #1: And our belief from the Hyperion perspective is that we can not only support perps , which we have already , but also fine teams on the outcome market side .

Hyunsu Jung: Our belief from the Hyperion perspective is that we can not only support perps, which we have already, but also find teams on the outcome market side as HIP-4 moves to permissionless and basically establish infrastructure that enables all of these to functionally grow as a result of volume generally increasing. The other trend that we are seeing is the tokenization of real-world assets, and that continuously drives more utilization not only to the HyperCore platform but also to HyperEVM. That means that you have many verticals that are using these financial primitives to not only satisfy the use of DeFi in addition to having that collateral to utilize it for outcome markets. Net-net, we think that we are just beginning to scratch the surface of what is possible when you have infrastructure like Hyperliquid.

Speaker #1: As he for moves to permissionless and basically establish infrastructure that enables all of these to functionally grow as a result of volume , generally increasing .

Speaker #1: The other trend that we're seeing is the tokenization of real world assets , and that is continues to continuously drive more utilization , not only to the hyper core platform , but also to hyper EVM .

Hyunsu Jung: The other trend that we are seeing is the tokenization of real-world assets, and that continuously drives more utilization not only to the HyperCore platform but also to HyperEVM. That means that you have many verticals that are using these financial primitives to not only satisfy the use of DeFi in addition to having that collateral to utilize it for outcome markets. Net-net, we think that we are just beginning to scratch the surface of what is possible when you have infrastructure like Hyperliquid.

Speaker #1: And that means that you have many verticals that are using these financial primitives to not only satisfy the use of DeFi . In addition to , you know , having that collateral to utilize it for outcome markets .

Speaker #1: And so net net , we think that there's just only , only the , we're just beginning to scratch the surface of what's possible when you have like hyper liquid .

Speaker #5: That's great. And we'll see some elections, or something like that, later in the year. But just two other quick ones, hopefully.

Brian P. Vieten: That is great. We will go through some elections or something like that later in the year. Just two other quick ones, hopefully. So great to hear the quick pickup from winding down the Felix relationship. I guess could you guys contextualize the pipeline a little bit more? It seems like the longer, the better, the more volume and activity, the better. So long as the pipeline is there, it is a relatively costless, painless switch. That is the beauty of the tokens themselves. I guess how sticky are these folks? How long might someone be in the pipeline ready to go before maybe they go try and find another avenue? Do you guys have a couple of months or some amount of timeline to be able to find a way to work together? Does that make sense?

Speaker #5: So great to hear the , the yeah , quick pick up from winding down the Felix relationship . And I guess , could you guys contextualize the pipeline a little bit more ?

Speaker #5: It seems like the longer the longer the better , the more volume and activity , the better . And maybe so long as the pipeline is there .

Brian P. Vieten: So long as the pipeline is there, it is a relatively costless, painless switch. That is the beauty of the tokens themselves. I guess how sticky are these folks? How long might someone be in the pipeline ready to go before maybe they go try and find another avenue? Do you guys have a couple of months or some amount of timeline to be able to find a way to work together? Does that make sense?

Speaker #5: It's a relatively , you know , costless , painless switch . This the beauty of , you know , the tokens themselves , but I guess how sticky are these folks ?

Speaker #5: How long might someone be in the pipeline, ready to go, before they maybe go try and find another avenue? Do you guys have a couple of months, or some amount of timeline, to be able to find a way to work together?

Speaker #5: Does that make sense ?

Speaker #1: So, it varies by each deployer. We take our diligence process very seriously, and I would say that both Skew and Entropy have been well capitalized.

Hyunsu Jung: It varies by each deployer. We take our diligence process very seriously. I would say that both Skew and Entropy have been well-capitalized. They have been participants in the markets for a long time. We looked at their methodology both for perps and outcome markets and felt very confident in their ability to create products that traders want to trade, both at the retail and institutional level. When it comes to deal structures, I would say, the base minimum requirement at the Hyperliquid platform level is six months, but we do design longer-term deal structures and again, have revenue share and equity exposure to our partners. So if they are able to generate substantial revenues and use it to allocate to their own HYPE stake, then that is perfectly fine. We still have exposure to their long-term success.

Speaker #1: They've been participants in the markets for a long time. We looked at their methodology for both purpose and outcome markets and felt very confident in their ability to create products that traders want to trade, both at the retail and institutional levels.

Speaker #1: When it comes to deal structures , I would say , you know , the base minimum requirement at the hyper liquid platform level is six months , but we do design longer term deal structures .

Speaker #1: And again, we have revenue share and equity exposure with our partners. So if they are able to generate substantial revenues and use it to allocate to their own HYPE stake, then that's perfectly fine.

Speaker #1: We still have exposure to their long term success , but realistically , for teams that are building new infrastructure , they should be allocating that capital towards the growth of their own product and distribution .

Hyunsu Jung: Realistically, for teams that are building new infrastructure, they should be allocating that capital towards the growth of their own product and distribution. That is why we feel very confident in our ability to not only position Hyperion as the bonded capital layer for these deployers, but with products like partner markets, with institutional listing services, we can scale both horizontally and vertically. So that is how we think about long-term deployments of HYPE. Again, our unique offering in this market is that we are not just a HYPE holder and provider, but we have also built primitives across the HyperEVM and have services like the HYPE Asset Use Service for fee reductions to offer to traders. So we offer this cohesive partnership-based product that is what enables us to not only engage with but work long-term with the best builders in the ecosystem.

Speaker #1: And so that's why we feel very confident in our ability to not only position Hyperion as the bonded capital layer for these deployers , but with products like partner markets , with institutional listing services , we can scale both horizontally , horizontally and vertically .

Speaker #1: So that's how we think about long term deployments of hype . And again , our unique offering in this market is that we're not just a hype holder and provider , but we've also built primitives across the hyper EVM and have , you know , services like the Hype Asset for fee reductions to offer to traders .

Hyunsu Jung: So that is how we think about long-term deployments of HYPE. Again, our unique offering in this market is that we are not just a HYPE holder and provider, but we have also built primitives across the HyperEVM and have services like the HYPE Asset Use Service for fee reductions to offer to traders. So we offer this cohesive partnership-based product that is what enables us to not only engage with but work long-term with the best builders in the ecosystem.

Speaker #1: So, we offer this cohesive, partnership-based product. That is what enables us to not only engage with, but work long-term with the best builders in the ecosystem.

Speaker #5: Okay . That's great . That kind of answers this next one . But just a quick housekeeping . I think you guys might have hit on it , but how many how much are the token holdings ?

Brian P. Vieten: Okay, that is great. That kind of answers this next one, but just quick housekeeping. I think you guys might have hit on it, but how much of the token holdings are ready to rock as far as deploying to new strategies? Then can you just talk about the balance between, hey, let us get out there and track down more tokens to marry them with all the folks in the pipeline versus, hey, it is more about getting the right partnerships, sort of, I guess quality versus quantity. Can you just talk about the balance a little bit?

Speaker #5: Are , you know , ready to rock as far as deploying to new strategies ? And then can you just talk about the balance between , hey , let's get out there and track down more tokens to marry them with all the folks in the pipeline versus , hey , you know , it's more about getting the right partnerships , sort of , I guess , quality versus quantity , like he's talking about the balance a little bit

Speaker #1: Sure . So I guess it should be relatively clear , right ? We faced a headwind , unexpected event with USD sunset . And within a month we were able to deploy more hype than we had actually had to UN delegate and have built better economic structures .

Hyunsu Jung: Sure. I guess it should be relatively clear, right? We faced a headwind, unexpected event with USDH sunset, and within a month, we were able to deploy more HYPE than we had actually had to undelegate and have built better economic structures. So there is a lot of flexibility that we have, and it is the same thing that attributes to our increasing cost efficiency in terms of our operating structure. We are able to use these digital assets most optimally and are able to find the best deal structures that enable long-term growth. So when it comes to, again, going to market, most of these times the teams are coming to us, and we have a lot of privilege to be able to identify the best teams and work with them closely to support the growth of Hyperliquid ecosystem, but also generate and establish long-term revenue opportunity.

Speaker #1: So there is a lot of flexibility that we have, and it's the same thing that contributes to our increasing cost efficiency in terms of our operating structure.

Speaker #1: We are able to use these digital assets . Most optimally and are able to find the best deal structures that enable long term growth .

Hyunsu Jung: We are able to use these digital assets most optimally and are able to find the best deal structures that enable long-term growth. So when it comes to, again, going to market, most of these times the teams are coming to us, and we have a lot of privilege to be able to identify the best teams and work with them closely to support the growth of Hyperliquid ecosystem, but also generate and establish long-term revenue opportunity.

Speaker #1: So when it comes to , again , going going to market , most of these times the teams are coming to us and we have a lot of privilege to be able to identify the best teams and work with them closely to support the growth of hyper liquid ecosystem .

Speaker #1: But also generate and establish long term revenue opportunities . So it's about maintaining the flexibility around the asset . And then obviously , it's critical for us to be able to continue to accumulate and redeploy hype and optimize the yield that's possible in the ecosystem .

Hyunsu Jung: So it is about maintaining the flexibility around the asset, and then obviously it is critical for us to be able to continue to accumulate and redeploy HYPE and optimize the yield that is possible in the ecosystem.

Speaker #5: That's great . Are you guys are leading the charge there ? So I had to ask , but thanks again , guys

Brian P. Vieten: Well, you guys are going to lead the charge there, so I had to ask, but thanks again, guys.

Speaker #3: Once again , if you would like to ask a question , please press star one on your telephone keypad . Our next question is from Jim Mccrery with Chardon Capital Markets , LLC .

Operator 3: Once again, if you would like to ask a question, please press star 1 on your telephone keypad. Our next question is from Jim McCree with Chardan Capital Markets LLC. Please proceed with your question.

Operator: Once again, if you would like to ask a question, please press star 1 on your telephone keypad. Our next question is from Jim McCree with Chardan Capital Markets LLC. Please proceed with your question.

Speaker #3: Please proceed with your question

Speaker #6: Yeah , thanks a lot . Good evening guys . I'm I'd like to figure out how you get to the adjusted gross profit guidance .

Jim McCree: Yeah, thanks a lot. Good evening, guys. I would like to figure out how you get to the adjusted gross profit guidance. You did 2 in the H1, so you need 3, 4 in the H2, and it is a pretty big jump from Q1. The staking, it looks like it is really driven by the price of the token more than anything else. So the delta has got to come from something else, and I am assuming that it is DeFi monetization. Is that true? Secondly, it sounds like it is really going to be more Q4 loaded than Q3 loaded. Is that true?

Jim McIlree: Yeah, thanks a lot. Good evening, guys. I would like to figure out how you get to the adjusted gross profit guidance. You did 2 in the H1, so you need 3, 4 in the H2, and it is a pretty big jump from Q1. The staking, it looks like it is really driven by the price of the token more than anything else. So the delta has got to come from something else, and I am assuming that it is DeFi monetization. Is that true? Secondly, it sounds like it is really going to be more Q4 loaded than Q3 loaded. Is that true?

Speaker #6: You did two in the first half, so you need three or four in the second half. And it's a pretty big jump from Q1.

Speaker #6: The staking is it looks like it's really driven by the price of the token more than anything else . So , you know , the the deltas got to come from something else .

Speaker #6: And I'm assuming that it's DeFi monetization . Is that is that true ? And then secondly , it sounds like it's really going to be more fourth quarter loaded than , than third quarter loaded .

Speaker #6: Is that true ?

Speaker #2: Thanks very much , Jim , for the question . I think when you when you consider that we had two major partnerships wind down in the second quarter , both impacting DeFi monetization .

David Knox: Thanks so much, Jim, for the question. I think when you consider that we had 2 major partnerships wind down in the Q2, both impacting DeFi monetization, yes, it is certainly logical to extrapolate that that is where we will have the most recovery and growth following through, both from the partnerships that we have announced and potentially future activity through the remainder of the year. So DeFi monetization should be a large source of growth. Ecosystem rewards, to the extent that there are airdrops or other awarded tokens and equity positions could contribute quite a bit. Your point on staking is correct. That is fairly linear to the number of tokens that we have and the price of HYPE. I think that sitting here today, we certainly continue to feel very, very confident in the guidance that we have.

Speaker #2: Yes, it is certainly logical to extrapolate that that is where we will have the most recovery, and in growth following through, both from the partnerships that we've announced and potentially future activity through the remainder of the year.

Speaker #2: So, DeFi monetization should be a large source of growth for ecosystem rewards, to the extent that there are airdrops or other awarded tokens. And equity positions could contribute quite a bit. Your point on staking is correct.

Speaker #2: That is fairly linear to the number of tokens that we have , and the price of height I think that , you know , sitting here today , we certainly continue to feel very , very confident in the guidance that we have .

Speaker #2: I think that, you know, we expect to continue to grow every single quarter. There are reasons why there could be variability.

David Knox: I think that we expect to continue to grow every single quarter. There are reasons why there could be variability, but we expect Q3 to be strong and Q4 to potentially be stronger. But there are a lot of reasons why Q3 might end up stronger than Q4, and vice versa. As you can imagine, as part of our broader triple dip strategy of owning tokens and sharing in the upside in businesses and sharing in the upside in the equity of the various protocols and companies that we support. It supports a long-term way of operating, and that is how we aim to position ourselves for the benefit of shareholders. So quarter-to-quarter numbers are going to continue to be volatile. It is the nature of the way that we operate, and it is the nature of the broader digital assets in the crypto space.

Speaker #2: But we expect Q3 to be strong and Q4 to be stronger. But there's a lot of reasons why Q3 might end up stronger than Q4, and vice versa.

Speaker #2: As you can imagine , as part of our broader triple dip strategy of owning tokens and sharing in the upside in businesses and and sharing in the upside , in the equity of the various protocols and companies that we support .

Speaker #2: It supports a long term way of operating . And that is how we aim to position ourselves for the benefit of shareholders . So quarter to quarter numbers are going to continue to be volatile .

Speaker #2: It's the nature of the way that we operate, and it's the nature of the broader digital assets and crypto space. But I think that how you've described it is a fair overall sense for where things could land.

David Knox: But I think that how you've described it is a fair overall sense for where things could land.

Speaker #6: Great . And just two more . I'll ask them at the same time . So one is , is the kinetic staking yield .

Jim McCree: Great. Just two more. I will ask them at the same time. One is the Kinetic staking yield, is that reported in ecosystem rewards? Secondly, with the sale of the legacy healthcare to Arctic Vision, do you get any significant reduction in operating expenses from the Q2 levels?

Jim McIlree: Great. Just two more. I will ask them at the same time. One is the Kinetic staking yield, is that reported in ecosystem rewards? Secondly, with the sale of the legacy healthcare to Arctic Vision, do you get any significant reduction in operating expenses from the Q2 levels?

Speaker #6: Is that reported in ecosystem rewards? And then secondly, with the sale of the legacy healthcare to Arctic Vision, do you get any significant reduction in operating expenses from the Q2 levels?

Speaker #2: Great questions . The the additional staking on kinetic where we have our KNTQ staked into S , k , n , t , q , and are continuing to earn yield We view that as DeFi monetization , as I mentioned earlier on the call , we've accumulated about 40,000 tokens .

David Knox: Great questions. The additional staking on Kinetic, where we have our KMTQ staked into sKNTQ, are continuing to earn yield, we view that as defined monetization. As I mentioned earlier on the call, we have accumulated about 40,000 tokens while these tokens continue to be liquid staked. That is where that is and will continue to be. In terms of the sale to Arctic Vision, Q2, obviously, we saw a substantial decline in our costs from $3.0 million to $2.3 million. However, that does not reflect a full quarter of the legacy segments as being run off. We would anticipate even further declines Q3 versus Q2 to have a full quarter of lower personnel costs, patent IP maintenance, and things of that nature.

Speaker #2: While these tokens continue to be liquid staked . So that that is where that is and will continue to be in terms of the sale to Arctic Vision , we Q2 obviously , we saw a substantial decline in our costs from 3.0 million to 2.3 million .

Speaker #2: However , that doesn't reflect a full quarter of the of the legacy segments as being run off . So we would anticipate even further declines Q3 versus Q2 to have a full quarter of , you know , lower personnel costs , patent IP maintenance and things of that nature

Speaker #6: Can you just frame that in terms of how big that decline might be—maybe a range?

Jim McCree: Can you just frame that in terms of how big that decline might be? Maybe a range.

Jim McIlree: Can you just frame that in terms of how big that decline might be? Maybe a range.

Speaker #2: Sure . I think that a , a incremental reduction of anywhere between 10% to 20% versus the run rate of the core expenses , excluding stock based compensation .

David Knox: Sure. I think that an incremental reduction of anywhere between 10% to 20% versus the run rate of the core expenses, excluding stock-based compensation, I think would be a good measurement of success for us. Again, keeping that in context, the first quarter that we started Q3 last year, it was $4.3 million, Q3 2025. So we've already reduced to close to half and getting under half of where we started of overall run rate cash would be a great success. Going to an earlier question, we can do all of these activities with a fairly low enduring cost base. It's infrastructure that we've built. It is legal framework that we have developed that we've obviously cleared through all of our reporting infrastructure and governance procedures.

Speaker #2: I think would , would be a good measurement of success for us . And again , keeping that in context , the , the first quarter that we started Q3 last year , it was $4.3 million .

Speaker #2: Q3 2025. So we've already reduced to close to half, and getting under half of where we started with overall run rate cash would be a great success.

Speaker #2: And then, going to an earlier question, you know, we can do all these activities with a fairly low, enduring cost base.

Speaker #2: It's infrastructure that we've built. It is a legal framework that we have developed, that we've obviously cleared through all of our reporting infrastructure and governance procedures.

Speaker #2: And this kind of growth can happen only because of scalable blockchain technologies . And in particular , the blockchain that we've chosen , which is hyper liquid .

David Knox: This kind of growth can happen only because of scalable blockchain technologies, and in particular, the blockchain that we've chosen, which is Hyperliquid. So yes, you should continue to see declining costs as we saw this quarter-over-quarter, and continue to see further optimization from here as we're laser-focused on how we scale.

Speaker #2: So yes, you should continue to see declining costs, as we saw this quarter, quarter over quarter, and continue to see further optimization from here as we're laser focused on how we scale.

Speaker #6: Got it. Thanks a lot. Well done, guys.

Jim McCree: Got it. Thanks a lot. Well done, guys.

Jim McIlree: Got it. Thanks a lot. Well done, guys.

Speaker #3: There are no more questions. We will now turn the call back over to Hyunsu Jung for closing remarks.

Operator 3: There are no more questions. We will now turn the call back over to Hyunsu Jung for closing remarks.

Operator: There are no more questions. We will now turn the call back over to Hyunsu Jung for closing remarks.

Speaker #1: Our second quarter was defined by two things: resilience and expansion, supported by sound operating processes and flexible, pioneering partners. When the ecosystem shifted, we adapted.

Hyunsu Jung: Our Q2 was defined by two things, resilience and expansion, supported by sound operating processes and flexible pioneering partners. When the ecosystem shifted, we adapted within weeks and came out with stronger economics and better infrastructure than we had before. That is a core mandate as a true operating company, and today's results reflect it. What excites us most is what is to come. Hyperliquid crossed $1 billion in cumulative revenue this quarter and opened an entirely new frontier in outcome markets, one where existing perpetual infrastructure operates in a unified financial system and where Hyperion is positioned at forefront. From validator operations and the HYPE Asset Use Service to institutional volatility and credit products on the HyperEVM to the next generation of markets on HyperCore, the foundations we spent the past year laying are becoming the infrastructure this ecosystem runs on. Each business line feeds the flywheel.

Speaker #1: Within weeks, and came out with stronger economics and better infrastructure than we had before. That is a core mandate. As a true operating company, and today's results reflect it.

Speaker #1: But what excites us most is what's to come. Hyper Liquid crossed $1 billion in cumulative revenue this quarter and opened an entirely new frontier in outcome markets.

Speaker #1: One where existing Perpetuals infrastructure operates in a unified financial system, and where Hyperion is positioned at the forefront, from validator operations and the hype asset use service to institutional volatility and credit products on the Hyper EVM, to the next generation of markets on Hyper Core. The foundations we spent the past year laying are becoming the infrastructure this ecosystem runs on.

Speaker #1: Each business line feeds the flywheel revenue tied to utilization , rising value across our partner protocols , and more hype bought back and burned as that flywheel accelerates , so does the global adoption of hyper liquid , bringing new users , new products and new capital to the ecosystem we serve .

Hyunsu Jung: Revenue tied to utilization, rising value across our partner protocols, and more HYPE bought back and burned. As that flywheel accelerates, so does the global adoption of Hyperliquid, bringing new users, new products, and new capital to the ecosystem we serve. While a passive treasury experiences Hyperliquid's evolution as price volatility, Hyperion experiences it as a pipeline. That is the difference we set out to build, and our objective is to keep proving that each quarter to come. As large shareholders ourselves, our goals have been and always will be directly aligned with yours. We only win if you win. Every decision we make, every partnership, every deployment, every dollar of capital is optimized for that outcome. To our investors and partners, thank you for your continued support as we build the premier institutional gateway to Hyperliquid. Thank you.

Speaker #1: While a passive treasury experiences HyperLiquid's evolution as price volatility, Hyperion experiences it as a pipeline. That is the difference we set out to build, and our objective is to keep proving that each quarter to come.

Speaker #1: And again, as large shareholders ourselves, our goals have been and always will be directly aligned with yours. We only win if you win.

Speaker #1: Every decision we make , every partnership , every deployment , every dollar of capital is optimized for that outcome . To our investors and partners .

Speaker #1: Thank you for your continued support as we build the premier institutional gateway to hyperliquid. Thank you.

Operator 3: This concludes today's teleconference. You may now disconnect.

Operator: This concludes today's teleconference. You may now disconnect.