By Boaz Sobrado,Contributor

Copyright forbes

Grvt co-founders from left to right: Matthew Quek (COO), Hong Yea (CEO), Aaron Ong (CTO)

Trading on Hyperliquid has become incredibly popular, but it comes with an uncomfortable reality: your every move is visible. Position sizes, liquidation levels, trading patterns. All of it sits in plain view. For retail traders moving modest sums, this transparency might feel like a minor inconvenience. For whale traders moving tens of millions, it creates a target on their back.

This dynamic has helped fuel a $19 million Series A round for Grvt, a decentralized exchange built on zero-knowledge technology that promises to solve what its CEO calls the “position hunting” problem. The round, led by ZKsync with $14 million, positions Grvt as a direct challenger to Hyperliquid’s dominance in decentralized perpetual futures.

The Transparency Problem

Hyperliquid has captured roughly 70% of the decentralized perpetual futures market, processing monthly volumes approaching $400 billion. Its HYPE token is hitting all time highs. Even Binance’s CZ has reacted by backing a competitor. Yet for all of Hyperliquid’s success its radical transparency creates problems that traditional financial markets solved decades ago through privacy protections.

“We’ve seen those cases where they do get hunted,” explains Hong Yea, Grvt co-founder and CEO, referring to large traders whose positions become targets for manipulation. “Many of those folks who take high leverage on very large positions—let’s say $50 million—they don’t want to be hunted.”

The hunting works like this: sophisticated traders monitor Hyperliquid’s transparent order books and position data, identifying large positions nearing liquidation levels. They can then coordinate trading activity to push prices toward those liquidation points, profiting as forced selling cascades through the market.

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For institutional clients considering decentralized trading, this transparency represents a fundamental barrier to adoption. Traditional markets protect large orders through dark pools and other privacy mechanisms precisely because transparency at this level can be manipulative rather than beneficial.

Privacy as Competitive Advantage

Grvt’s solution centers on zero-knowledge technology, running what it calls a “validium” blockchain that validates transactions without publishing the underlying state data. Traders can execute large positions without revealing their size, entry points, or liquidation levels to potential predators.

The privacy focus has already attracted attention from large traders. “We’ve had multiple whale traders who have been talking to us because of these privacy elements,” Yea notes. The exchange offers additional incentives including negative maker fees, such as paying traders one basis point to provide liquidity and upcoming token airdrops.

This approach reflects a broader shift in how decentralized exchanges compete. With over 600 DEXs now operating according to Grvt’s estimates, pure technological superiority or lower fees no longer guarantee success. Privacy represents one of the few meaningful differentiators remaining.

The ZK Technology Bet

ZKsync’s substantial investment signals confidence that zero-knowledge technology has finally found its killer application in trading. Alex Gluchowski, CEO of Matter Labs (ZKsync’s parent company), frames this as crypto’s “HTTPS moment”. They hope that ZK trading will help usher in the privacy layer that brings institutional adoption.

“Just as HTTPS took the internet mainstream by adding a layer of trust and privacy, ZK will do the same for Web3,” Gluchowski stated. The technology promises not just privacy but also Ethereum-level security, improved scalability, and reduced transaction costs.

ZKsync’s involvement extends beyond funding. The partnership aims to integrate Grvt with ZKsync’s broader ecosystem of tokenized real-world assets, potentially creating a “central liquidity hub” that allows traders to use everything from tokenized bonds to real estate as collateral.

Yield-Driven Growth Strategy

Beyond privacy, Grvt differentiates itself through what Yea calls a “yield-first” approach. The exchange offers multiple income streams for users: vault strategies managed by institutional partners like market maker Ampersan, fixed-yield products promising 10% returns, and tokenized versions of these investments that can serve as trading collateral.

This creates what Grvt hopes will be a self-reinforcing cycle. Higher yields attract more depositors, whose funds enable more sophisticated market-making strategies, which generate the trading volume needed to sustain those yields. The model resembles traditional brokers, like Trading212, who offer market-beating savings rates to attract trading customers.

The approach targets what Yea identifies as two distinct user types: active traders seeking high leverage and control, and passive investors wanting consistent returns without volatility. Most DEXes focus on the first group; Grvt aims to capture both.

Grvt’s institutional ambitions extend to its regulatory approach. The company holds licenses in Bermuda for regulated activities. The exchange has already integrated with institutional infrastructure providers including LTP, one of the largest prime brokers in crypto, and Coin Routes for execution management. These partnerships signal intentions beyond competing purely in the retail DEX space.

Further Ventures, the Abu Dhabi-based investment firm that co-led the round, represents another institutional validation. As Managing Partner Faisal Al Hammadi noted, “Grvt’s application of zero-knowledge proofs demonstrates how cutting-edge cryptography can underpin markets at institutional scale.”

Challenging Hyperliquid’s Lead

Grvt faces significant challenges in displacing Hyperliquid’s network effects. Traders gravitate toward platforms with the deepest liquidity, creating winner-take-most dynamics in derivatives markets. Hyperliquid’s transparency, while problematic for large traders, also enables sophisticated trading strategies and market analysis that many users value.

The competitive landscape continues evolving rapidly. Hyperliquid recently launched its own yield-generating vault products and native stablecoin, showing awareness of the competitive threats. Other established DEXes are also exploring privacy features and yield strategies.

Grvt’s window of opportunity may be narrow. Zero-knowledge technology remains complex and expensive to implement, giving early movers like Grvt temporary advantages. But as the technology matures and becomes more accessible, privacy features may become table stakes rather than differentiators.

The Privacy Trade-off

The privacy versus transparency debate in decentralized trading reflects broader tensions in crypto markets. Transparency advocates argue that open order books and position data create more efficient price discovery and reduce information asymmetries that benefit only sophisticated traders.

Privacy supporters counter that transparency at Hyperliquid’s level enables manipulation and front-running that would be illegal in traditional markets. They argue that some opacity actually improves market quality by protecting liquidity providers from predatory strategies.

Grvt’s success will partly determine whether privacy-focused trading gains mainstream adoption or remains a niche preference. With $19 million in funding and institutional partnerships in place, the exchange has resources to compete seriously for Hyperliquid’s market share.

For an industry that began with Bitcoin’s promise of financial privacy, the question of whether traders want transparency or anonymity may determine the next phase of decentralized finance evolution.

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