Interpretation of ERC-8021 proposal: Will it enable Ethereum to replicate Hyperliquid's developer wealth creation myth?

Author: Jarrod Watts

Translation: Deep潮TechFlow

Application developers are quietly building applications on platforms like Hyperliquid and Polymarket, leveraging a new revenue attribution system called “builder codes” to earn millions.

This is a Roblox-style model in the crypto space: the platform acts as a foundation, enabling thousands of applications to build and profit—by associating activity with unique codes and distributing earnings.

In this article, I will explain in detail what builder codes are, how applications are earning millions through them, and how ERC-8021 proposes to natively integrate this system into Ethereum.

What are builder codes?

Builder codes are essentially referral codes designed for application developers—applications can use them to generate trading volume on another platform (e.g., Hyperliquid) and earn revenue.

This creates an on-chain attribution system, allowing third-party applications (such as trading bots, AI agents, and wallet interfaces) to earn fees based on activity they generate on other platforms.

This system benefits all parties involved:

• Platforms gain more trading volume;
• Application developers earn income from the volume they generate;
• Users enjoy more convenient ways to interact with platforms.

Let’s better understand this with an example—Phantom.

Phantom’s Perpetual Contract Revenue “Money Printer”

In July, Phantom added support for perpetual trading using Hyperliquid’s builder codes, a decision that currently brings them about $100,000 in daily revenue.

It works by allowing users to deposit funds into a separate perpetual contract account, enabling long and short trades directly within the mobile app.

Each order includes Phantom’s builder code, and a 0.05% fee is charged to the user—these fees are recorded via the on-chain attribution system and can be claimed in USDC.

Image: Phantom “tags” user orders from the Phantom wallet app with builder codes, earning these fees.

It’s worth noting that all of this relies on Hyperliquid’s external API, making the building process extremely easy and far cheaper than developing similar complex features independently.

Phantom’s perpetual contract business has shown an incredible return on investment (ROI)—since launching in July, Phantom’s perpetual trading volume has approached $20 billion, earning nearly $10 million in just under 6 months.

Image: Just yesterday, Phantom earned nearly $150,000 from perpetual contracts.

Interestingly, Phantom’s top perpetual traders performed poorly:

• Lost about $2 million of their perpetual portfolio;
• Had a net loss of $1.8 million;
• Paid approximately $191,000 in fees via builder codes to Phantom. Currently, their only position is a 25x leveraged ETH long (how to interpret this depends on you).

Unless everyone loses their funds like this user, Hyperliquid will continue to generate huge revenues for developers like Phantom who bring trading volume to its platform.

To date, Hyperliquid’s builder codes have:

• Earned nearly $40 million for application developers;
• Provided diverse, improved user interfaces for perpetual trading;
• Created over $100 billion in perpetual trading volume for Hyperliquid!

This model’s success has been quickly validated, attracting many talented developers to build high-quality applications on Hyperliquid.

Polymarket follows suit

This week, Polymarket announced a similar builder program designed to reward application developers for bringing trading volume to its prediction markets.

To promote the integration of builder codes, Polymarket launched a weekly USDC reward program based on trading volume.

Although currently the trading volume from third-party Polymarket applications is much lower than Hyperliquid, its builder codes have already attracted some teams to develop user interfaces, offering users a unique prediction experience.

Image: Over $50 million in bets have been placed through third-party Polymarket applications.

Polymarket appears to be expanding the scope of builder applications, from trading terminals to AI assistants, and has also created a dashboard similar to Hyperliquid to showcase top builders and their rewards.

Other prediction markets are expected to launch similar programs to compete, and a broader ecosystem of applications may adopt this referral system’s successful model.

However, Ethereum has the opportunity to elevate this model to new heights by encouraging high-quality application developers to build innovative user interfaces on a mature and reliable Ethereum platform.

ERC-8021 and Ethereum’s Opportunities

Ethereum now has the chance to natively integrate builder codes into both Layer 2 and Layer 1, with a recent proposal suggesting an interesting implementation.

ERC-8021 proposes embedding builder codes directly into transactions, combined with a registry where developers can register wallet addresses to receive earnings.

Implementing this proposal would standardize the addition of builder codes to any transaction and define a universal mechanism for platforms to reward application developers based on generated activity.

ERC-8021 includes two core components:

• New transaction suffix: developers can add small data at the end of transactions to include their builder codes, such as “phantom,” “my-app,” or “jarrod.”
• Code registry: a smart contract where developers can map their builder codes to wallet addresses to receive platform revenue shares.

Builder codes can be appended to transaction data and optionally mapped to a wallet address for revenue collection.

This would enable any platform to attribute on-chain activity to its source application and distribute income transparently and programmably to those developers.

Conclusion

Users of Hyperliquid may already be familiar with builder codes, but upon closer examination, the extent of their rapid adoption is truly astonishing.

The reason for this success is clear: builders are rewarded for creating high-quality consumer applications based on powerful primitives in the crypto space.

Ethereum, with its large existing pool of high-quality platforms, can integrate into a standardized builder code system to drive a new wave of consumer-facing applications.

Builder codes unlock new revenue streams for high-quality application developers—revenues that are not dependent on conference sponsorships but are based on the value they provide to users.