Kinetiq has launched the testnet for Elysium, a Hyperliquid-focused Layer 2 network that aims to move application execution away from the capacity-constrained HyperEVM while settling its state back to that chain. Built with the Arbitrum Orbit stack, Elysium uses HYPE as its native gas token and is designed to operate alongside HyperCore, Hyperliquid’s high-performance trading infrastructure.
The proposed architecture targets a practical problem for developers building sophisticated trading applications: HyperEVM provides an EVM-compatible environment, but complex onchain applications can compete for limited blockspace. Elysium would give those applications a separate execution layer while retaining a close connection to Hyperliquid’s liquidity and trading venues.
Kinetiq has set aggressive performance goals for the network, publishing targets of 300 million gas per second and block times of 100 to 200 milliseconds. The team describes that capacity as roughly two orders of magnitude above HyperEVM. Those figures remain targets rather than demonstrated mainnet results, but they frame Elysium as infrastructure tailored for applications where rapid updates and trading execution matter more than general-purpose smart-contract activity.
Elysium’s mainnet is scheduled to launch in about a month, according to the timeline outlined by Kinetiq. The testnet is live while developers prepare applications and test the chain’s connections to the rest of the Hyperliquid ecosystem.
Smart contracts would gain closer access to HyperCore
Elysium’s most consequential feature may be its planned programmatic connection to HyperCore rather than its raw transaction capacity. Kinetiq says smart contracts on Elysium are intended to read deeper order-book data, prices, account balances and open positions from HyperCore. The design also contemplates low-latency order placement into HyperCore.
That access would allow applications to react to the order book from within a smart-contract environment. In many current onchain trading setups, automated strategies rely on offchain infrastructure to monitor market data and submit transactions, creating operational dependencies and latency risks. Elysium is intended to bring more of that workflow closer to the chain while preserving access to HyperCore’s central limit order books.
Kinetiq has pointed to market making as one potential application. A proprietary trading system could update quotes through Elysium and hedge completed trades on HyperCore. Arbitrage applications could also compare prices between automated market maker pools and HyperCore order books, then execute hedging or matching activity without depending as heavily on outside price oracles and accounts spread across multiple venues.
The approach places Elysium between decentralized application logic and HyperCore’s trading liquidity. Whether the connection delivers a material speed advantage will depend on the final implementation of order routing, data availability and settlement, but the design is clearly aimed at strategies that are difficult to run efficiently on a slower general-purpose chain.
A proposed route from token launch to derivatives
Kinetiq also presents Elysium as part of a staged path for assets entering the Hyperliquid ecosystem. Under the proposed flow, a new token could first establish pricing and liquidity through an Elysium-based AMM. It could then be mapped onto HyperEVM, connected to a HyperCore spot order book, and eventually seek a listing on a HIP-3 perpetual market after spot activity develops.
The sequence seeks to join token issuance, decentralized liquidity, spot trading and derivatives rather than leaving each stage on a separate platform. For emerging assets, that could offer a clearer route from early price discovery to more mature markets. It also gives liquidity providers and market makers a reason to remain within the same technical ecosystem as a project grows.
Kinetiq enters the launch with an established position in the Hyperliquid community through kHYPE, its HYPE liquid-staking product. The protocol reports approximately $1.3 billion in total value locked. It has also expanded into trading through Markets.xyz, a perpetuals market built using Hyperliquid Improvement Proposal 3, or HIP-3.
Sequencer fees link Elysium activity to KNTQ supply
Elysium’s fee model allocates half of sequencer revenue to open-market purchases and burns of KNTQ, Kinetiq’s token. The other half is divided evenly between application builders consuming blockspace and the Kinetiq treasury, with each receiving 25%.
Under that structure, KNTQ supply reduction would be tied directly to sequencer-fee generation. The model gives builders a defined share of blockspace revenue while directing a separate portion toward token buybacks and burns. Its eventual effect will depend on transaction demand and the level of fees users are willing to pay, rather than the allocation formula alone.
HYPE would serve as gas on Elysium, creating a direct utility role for the asset on the new network. Kinetiq also expects Elysium-originated market activity to generate additional fee opportunities on HyperCore when AMM traders, arbitrageurs and market makers route hedges or matched orders to its order books.
USDC is another part of the design. USDC circulating on Elysium would be backed by native USDC on HyperEVM. Under the AQAv2 arrangement described by Kinetiq, Hyperliquid can receive a share of yield generated from native USDC reserves on its network. If Elysium attracts additional USDC deposits, those reserves could increase, potentially raising the revenue associated with the arrangement.
Ascend becomes Elysium’s first announced deployment
Ascend, a token-launch platform co-founded by CryptoTomYT, is the first project to announce plans to deploy on Elysium. Its documentation describes a launch process in which tokens enter a closed hook trading pool immediately, without a separate bonding-curve phase. Initial pricing would use USDC or supported tokenized real-world assets.
Projects can qualify for “Ascended” status based on listed measures including trading volume, independent holders, market capitalization and holder concentration. Eligible projects may receive platform buybacks and placement before pursuing a route to HyperCore spot trading and, later, HIP-3 derivatives.
Ascend also plans to let users deposit HYPE and convert it into kHYPE. Staking yield would be used to purchase tokens that have obtained Ascended status, with those tokens distributed to stakers. The platform says it does not plan to issue its own token and proposes a 1% trading fee.
According to Ascend’s published fee framework, 25% of the trading fee would go to developers, while up to 50% could go to approved active creators or project takeover operators. Its documents allocate 90% of net protocol income to HYPE purchases and 10% to KNTQ purchases.
Elysium’s launch therefore extends Kinetiq from liquid staking and trading products into core execution infrastructure. Its success will hinge less on headline throughput targets than on whether developers use its HyperCore links to build applications that generate sustained trading and settlement activity.
Want deeper context on L2 scalability and design tradeoffs? Dive into our guide here before deploying on Elysium.
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