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The whole raison d'etre of hyperliquid and defi in general is getting around "kyc or something". More realistic risk is poor opsec allowing govs to persecute people who use/host the service.

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KYC definitely won't happen. But that aside the funny thing is, HyperLiquid isn't actually decentralized in a traditional sense. They have like 5 validating nodes and all operated by HyperLiquid affiliates.

Also the XYZ markets that the stock tokens "live on" is not managed by HyperLiquid as far as I know.

I would say this is slightly wrong. For one, they are up to 27 validating nodes. The limited nodes is to get their .2s settlement time and also to prevent frontrunning or MEV attacks, as they implement an actual CLOB. HyperLiquid is also non-custodial, you keep USDC in a self-owned wallet on the Arbitrum network. The funds do not move until your transaction on HyperLiquid settles.

You're right, it seems there are more validating nodes now. Not sure about the ownership information of course. They need to be whitelisted to take part, right? That's why I treat it as somewhat distributed rather than decentralized in a traditional crypto way.

Running a node for HL takes a lot of resources too.

But yeah they are non-custodial which is great.

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