Kinetiq launches Elysium Layer 2 to expand Hyperliquid beyond perps

Kinetiq has launched Elysium, a Layer 2 network built for Hyperliquid using Arbitrum technology, with 100 millisecond blocks and an execution target of 300 million gas per second, roughly 600 times HyperEVM’s big block capacity.

The network settles to HyperEVM, runs alongside HyperCore and uses HYPE as its native gas token. It is designed to support trading applications, market making and decentralized finance without requiring users to move assets outside the Hyperliquid ecosystem.

HyperEVM’s architecture prioritizes HyperCore’s exchange performance, limiting the transaction capacity available to applications. Elysium aims to address those constraints by providing additional execution capacity while maintaining access to Hyperliquid’s liquidity.

Justin Greenberg, cofounder and CTO of Kinetiq, told Crypto Briefing in a written interview that Elysium was specifically developed to overcome the limitations that have constrained applications on HyperEVM.

“Where HyperEVM currently struggles deeply with functionality and transaction capacity, Elysium will alleviate this entirely for developers and traders alike,” Greenberg said.

Asked how Elysium could succeed where HyperEVM applications have struggled to gain traction, Greenberg pointed to those capacity constraints and said the network would provide a more capable environment for developers and traders.

He also said Kinetiq sees billions of dollars in pent up demand for financial applications beyond perpetual futures trading that Hyperliquid’s existing infrastructure has been unable to accommodate.

“This is the gap that Elysium fills,” Greenberg said, adding that improving the experience for traders and developers in an environment that has struggled to meet their demand would allow growth to follow naturally.

The network supports existing Ethereum development tools and allows tokens to move between HyperEVM and Elysium. Infrastructure partners include Alchemy, Conduit, Arbitrum and Uniswap.

At launch, developers can deploy applications on Elysium, while direct interaction with HyperCore’s order books will become available through a scheduled upgrade expected within weeks.

Greenberg said the upgrade will introduce EL1Read and EL1Write, allowing applications to access Hyperliquid pricing data and submit transactions directly to HyperCore.

The integration is designed to support automated market makers, lending protocols and trading vaults that interact with HyperCore liquidity without relying on external price oracles.

Elysium also introduces a revenue sharing model that directs 50% of sequencer revenue toward buying back Kinetiq’s KNTQ token and another 25% to applications generating network activity.

“We believe this should be the standard at the blockchain level,” Greenberg said, adding that applications and their users should benefit from the revenue they generate.

He said Kinetiq has already seen strong willingness among application developers to redistribute their share of network revenue to users, potentially creating additional incentives for activity.

Asked what success would look like a year after launch, Greenberg said Kinetiq was more focused on improving the experience for developers and traders than meeting specific quantitative targets.