Kinetiq opens Elysium testnet for Hyperliquid-focused DeFi apps

Kinetiq has flipped the switch on the public testnet for Elysium, the Hyperliquid-native layer-2 network it first revealed in late August. Developers can now connect using chain ID 99801, a public RPC endpoint, a block explorer, a bridge, and a faucet, essentially the full starter kit for building DeFi applications on top of Hyperliquid’s infrastructure.

The testnet going live barely a month after the project’s unveiling signals an aggressive development timeline. For a protocol that already dominates Hyperliquid’s liquid staking market, Elysium represents a bet that the ecosystem’s biggest bottleneck isn’t demand. It’s throughput.

What Elysium actually does

Built on the Arbitrum Orbit framework, Elysium positions itself as the first dedicated layer-2 solution for Hyperliquid, designed to handle the kind of traffic that DeFi trading generates without the congestion.

The performance targets are ambitious. Elysium is aiming for 100 to 200 milliseconds per canonical block, with an execution capacity of 300 Mgas/s, a substantial leap over what HyperEVM currently delivers.

HYPE serves as the native gas token, bridged at a 1:1 ratio. The bridging mechanics handle the full lifecycle from Elysium’s AMM layer through HyperEVM and beyond, maintaining what the team calls “asset coherence” across the Hyperliquid stack. The network is targeting spot trading and token launches as its initial use cases.

The economics: burns, builders, and buybacks

Elysium’s sequencer fee distribution reveals a lot about Kinetiq’s priorities. Half of all fees, a full 50%, gets allocated to buybacks and burns of KNTQ, the project’s governance token. Another 25% goes to builders deploying on the network, and the remaining 25% flows to the Kinetiq treasury.

KNTQ, which is listed on Kraken, rallied roughly 30% when Elysium was first unveiled in August before partially retracing. Mainnet parameters are still being refined and pre-launch conditions remain in flux.

Hyperliquid’s expanding infrastructure layer

Kinetiq already controls the majority of Hyperliquid’s liquid staking market, giving it an outsized role in the chain’s validator economics and a built-in distribution channel for Elysium adoption.

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