Kinetiq unveils Elysium L2 for hyperliquid

Kinetiq, Hyperliquide’s largest liquid staking protocol, unveiled the Elyséean upcoming L2 designed to address HyperEVM’s performance limitations while trying to revive the stagnant Hyperliquid and DeFi ecosystem.

What’s the scoop?

• Presentation of Elysée: Elysium will be a faster EVM environment designed specifically for Hyperliquid, using HYPE as gas and connecting directly to HyperCore. It appears to resolve some of HyperEVM’s biggest limitations: low flowcostly transactions when activity increases, and a double block design which divides transactions between faster, smaller blocks and slower, larger blocks. Technical specifications and launch partners are still to come, with Kinetiq claiming the launch is imminent.
• Revive the Hyperliquid Spot: Hyperliquid spot markets have failed to match its dominance over perps, with Kinetiq highlighting that spot volumes and HIP-2 liquidity are near multi-month lows. Elysium aims to change this by providing PropAMMs with a faster execution environment and direct access to HyperCore order book data, while creating a full token lifecycle where assets can be launched via an AMM, access deeper liquidity, seed a HyperCore spot market, and eventually achieve a HIP-3 listing.
• Kinetiq also needs: Kinetiq still controls the overwhelming majority of HYPE liquid staking, but its primary market has declined significantly. As we saw previously, kHYPE supply fell 62% from its August 2025 peak through May, while HYPE staked in cash fell 10.42% to 4.42% of total HYPE staked. This weakness persisted, with Kinetiq’s kHYPE TVL core down almost 18% over the past month.
• Another KNTQ engine: Elysium also adds a new direct source of value for KNTQ. Of the sequencer fees, 25% will go to builders, 25% to Kinetiq treasury, and 50% to KNTQ purchases on the open market, with all purchased tokens burned. If Elysium succeeds in generating significant activity, Kinetiq would no longer have to rely primarily on staking and its existing products to generate redemptions.