Hyperliquid Policy Center CEO Jake Chervinsky cast the Hyperliquid protocol as neutral public infrastructure rather than a competing exchange in remarks at TOKEN2049 in Singapore on October 8, sharpening a regulatory argument that already has Kraken's parent building on top of the chain.

In an October 7 interview and on stage a day later, Chervinsky described Hyperliquid as plumbing beneath customer-facing venues such as Coinbase and Kraken. He placed the protocol "one level below" those firms and said it is "not meant to compete" with them.

Chervinsky's TOKEN2049 conversation included figures from HyperliquidX and ICE, the Intercontinental Exchange that operates the New York Stock Exchange. The panel pairing signaled mainstream-market interest in the infrastructure thesis.

Why the distinction matters

Under Chervinsky's framing, regulated entities can build trading products on Hyperliquid's technology while the protocol itself stays unlicensed. The venue handles onboarding and compliance; the layer-one handles matching and settlement. Chervinsky compared the arrangement to Bitcoin and Ethereum, arguing neither needs to register as an exchange.

That division of labor carries direct regulatory weight. If Hyperliquid is treated as base-layer infrastructure, exchange registration requirements fall to the firms that onboard customers — not to the settlement layer underneath them.

A decade to migrate

Chervinsky did not confine himself to taxonomy. He offered a conditional forecast: if the model proves out, every meaningful exchange, crypto-native or traditional, would need to run on public blockchain infrastructure within ten years.

He built the case on three operational advantages:

• Transparency of an onchain order book
• Resilience of a decentralized matching layer
• Cost-effectiveness against legacy matching engines

Chervinsky also indicated that onchain markets are expected to operate under US regulatory frameworks soon, without naming an agency or proposed rule.

Perpetuals and the Policy Center's remit

The Hyperliquid Policy Center launched in February 2026 as a nonprofit focused on advocacy and research around onchain markets and perpetual derivatives. Perps are futures contracts with no expiry; traders can hold a leveraged position indefinitely as long as funding payments continue, which has made them one of the most heavily traded products in crypto.

The center was funded with a donation of 1 million HYPE tokens from the Hyperliquid Foundation, worth roughly $28–29 million at the time of contribution.

Kraken's parent is already building on it

The infrastructure theory has one major test in production. In September 2026, Payward, the parent of Kraken, announced plans to offer permissioned perpetual futures on Hyperliquid to eligible US customers.

The setup splits duties cleanly. Payward controls who accesses the product and enforces compliance. Hyperliquid supplies the matching and settlement layer. The protocol stays outside the broker-dealer perimeter; the regulated entity owns the customer relationship.

What regulators and competitors do next

The next signal is whether more exchanges follow Payward's September 2026 blueprint and how US regulators treat layer-one perps venues when a regulated counterparty sits on top. The first posture will surface in CFTC and SEC commentary on customer-facing wrappers built atop decentralized order books.