Hyperliquid, a high performance decentralized exchange (DEX), is on its way to becoming the market leader in perpetuals. Concurrently, the value of its HYPE token has exploded. Founded in 2023 by Harvard classmates Jeff Yan and Iliensinc, the exchange first appeared last year. It has since grown to 21 delegated validators and gained more than 500,000 users. As a result, Hyperliquid has quickly taken the DEX scene by storm, currently processing more than 70% of all DEX perpetuals volume.
The HYPE token has seen massive development, proving the hype and potential platform’s growing impact. Hyperliquid has a market capitalization of $12.4 billion and a circulating supply of 334 million H liquid tokens. This has resulted in a fully diluted valuation of about $38 billion.
HYPE Token's Dramatic Rise
By November 2024, Hyperliquid came to an important inflection point. In the process, its daily trading volume exploded by ten times, exceeding $20 billion. All this activity has been the driving force behind HYPE token’s 3000%+ jump. Over the last two months, HYPE has pumped more than 300% to an all-time high before pulling back a bit.
The platform's unique approach to fee distribution further supports the token's value. A significant 97% of Hyperliquid's protocol fee revenue is reinvested into HYPE buybacks, contributing to the token's demand and price appreciation. These buybacks are stored in Hyperliquid’s Assistance Fund, which has already built up $910 million in HYPE.
While Hyperliquid has quickly ascended to dominance in the decentralized perpetuals market, it is just getting started in the larger crypto ecosystem. That’s because it has dominated 70% of all decentralized perpetuals trading. Its current volume only represents 10% of the global volumes Binance has grown, indicating there’s major room for additional growth.
Hyperliquid's Technological Edge
Hyperliquid’s tech stack comes together to provide a trading experience that is comparable to or even exceeds that of centralized exchanges. The platform continues to brag about its ability to process 200,000 TPS. It combines the speed and efficiency users want from centralized platforms with the self-custody and transparency that decentralized exchanges are known for.
At the moment, Hyperliquid is eighth across all blockchains by total value locked (TVL), with $1.75 billion TVL on the platform. More than $2.7 billion in TVL serves as a testament to the reliability and security users find in the exchange.
Market Concerns and Future Outlook
Even with Hyperliquid’s extraordinary traction and technology, several crypto market watchers have sounded alarms over the exchange’s skyrocketing valuation.
"I love Hyperliquid. I genuinely appreciate everything they’ve built and honestly believe it’s one of the best projects in all of crypto. But seriously - who’s buying HYPE at nearly $50B [of fully diluted valuation]? How is the risk/reward ratio still even remotely reasonable here?” - Crypto analyst Ansem
