Hyperion DeFi, Inc. Common Stock 2026 Q2 Earnings Call

Good afternoon and 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. 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.

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.

Thank you, Jason. To those joining us today, welcome to Hyperion DeFi's second quarter 2026 earnings call. A little over a short year ago, Hyperion DeFi was born from what was formerly Eyenovia, Inc. 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 businesses 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.

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.

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 third quarter 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.

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.

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. 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. 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.

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 AQAv2 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. 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. 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 didn't stop at just one new permissionless markets deployment. We also announced today as part of this release, another HAUS 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. 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 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. Early in the third quarter, we completed our first institutional credit deal through HyperLend Aviya 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 Aviya 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 Aviya.

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. 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 HAUS 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.