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

Application developers are earning millions by building on platforms like Hyperliquid using “builder codes,” and ERC-8021 proposes to natively integrate this system into Ethereum. This article is based on a piece by Jarrod Watts, organized, translated, and written by TechFlow. (Background: Ethereum AI agent economy dual engines: ERC-8004’s highway and Virtuals’ business pipeline) (Additional context: Ethereum finalized the Fusaka hard fork upgrade on 12/3, introducing PeerDAS and increasing the Gas limit)

The platform serves as a foundation, enabling thousands of applications to build and profit. Developers are quietly creating applications on platforms like Hyperliquid and Polymarket, leveraging a new revenue attribution system called “builder codes” to earn millions. This is a Roblox-like model in the crypto space: the platform as a base, providing building and monetization opportunities for thousands of applications—through unique code attribution activities and revenue sharing.

In this article, I will analyze in detail what builder codes are, how applications earn millions through them, and how ERC-8021 proposes to embed this system natively 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 income. 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 activities they generate on other platforms.

This system benefits all participants:

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

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

Phantom’s perpetual contract revenue “printing machine” In July, Phantom increased support for perpetual trading by using Hyperliquid’s builder codes, a decision that now brings them about $100,000 daily. It works by allowing users to transfer funds into a dedicated perpetual contract account and trade long or short directly within the app.

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

Figure: Phantom earns these fees by “tagging” user orders from Phantom Wallet app with builder codes.

Notably, all this relies on external APIs provided by Hyperliquid, making the building process extremely easy and far cheaper than developing similar complex features independently.

Phantom’s perpetual contract business has shown remarkable ROI—since launching in July, Phantom’s trading volume on perpetual contracts has approached $20 billion, earning nearly $10 million in revenue in less than six months.

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

Interestingly, Phantom’s top perpetual contract users perform very poorly:

• Lost about $2 million of their perpetual contract portfolio;
• Net loss of $1.8 million;
• Paid approximately $191,000 in fees via builder codes to Phantom.

Currently, the only position this user holds is a 25x leveraged ETH long (how to interpret this depends on you).

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

As of now, Hyperliquid’s builder codes have achieved:

• Nearly $40 million in developer earnings;
• Provided diversified, improved user interfaces for perpetual trading;
• Created over $100 billion in perpetual contract trading volume for Hyperliquid!

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

Polymarket follows closely This week, Polymarket announced a similar builder program aimed at rewarding application developers for bringing trading volume to its prediction markets. To promote builder code integration, Polymarket launched a weekly USDC reward program based on trading volume.

While current trading volume from third-party Polymarket applications is much lower than Hyperliquid, its builder codes have already attracted some teams developing user interfaces, offering users unique prediction methods.

Figure: Over $50 million in bets completed through third-party Polymarket applications.

Polymarket seems 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 application ecosystem may emulate this referral system’s success.

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

ERC-8021 and Ethereum’s opportunities Ethereum now has the chance to embed builder codes natively into L2 and L1 layers, with a recent proposal presenting an interesting implementation approach. ERC-8021 proposes to embed 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 trading volume.

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 will enable any platform to attribute on-chain activities to their source applications and transparently and programmatically distribute income directly to these developers.

Conclusion Users of Hyperliquid may already be familiar with builder codes, but upon closer examination, it becomes clear that this system…