Hyperliquid burst onto the crypto scene in November 2024, after successfully airdropping its native HYPE token to its first set of liquidity providers. An extraordinary 31% of the entire token supply has been given away to over 90,000 users. This HUGE airdrop has raised the bar for what generosity looks like in the crypto space! As an NFT trend editor, I've seen a lot of projects try to build hype (pun intended!), but Hyperliquid's approach felt different. So, what led to this historic airdrop? We’ll cover how it’s affecting the Hyperliquid community and what it means for HYPE’s longterm future.

Understanding the HYPE Airdrop

Hyperliquid’s airdrop wasn’t your typical free token giveaway. To do this, they created a thoughtful system to incentivize early adopters and active future participants in their unique ecosystem. The project created a gamified points program, refreshing every week, that decided how much of the next token launch users would receive. Early users received the best rewards, even before points were visible, through stacked-area and line graph detailing HyperLiquid trade activity. This made the early participation more appealing and created a sense of friendly competition.

The second season of the program was all about inclusion. Until now, participants were only able to earn points by trading in the spot market, but now asset-holders can earn points. Users can earn referral fees and points by signing other people up. They can do things such as LPing and being used for integrations with 20+ partner protocols. By incentivizing all of the above actions, Hyperliquid prompted users to familiarize themselves with the platform’s functionalities and ultimately become engaged participants in the ecosystem.

Hyperliquid has so far set aside 76.2% of its total token supply for the benefit of users. This decision reflects the new platform’s deep commitment to community engagement. This community-first approach is likely to be a major factor in the project’s long-term success. Through the airdrop, 310 million tokens were distributed to levels of approximately 94,000 users. By doing so, this action made early adoption very attractive and motivated members to sign up.

Impact on the Hyperliquid Community

Like other airdrops, this one made an incredibly immediate and impactful splash on the Hyperliquid community. Hyperliquid’s massively favorable token distribution went on to earn the protocol a cult following among crypto Twitter’s favorite pundits, cementing the hype. Hyperliquid's decision to exclude venture capitalists and focus on community involvement was seen as a key factor in the price action of HYPE post-airdrop and the platform's growing popularity.

The Hyperliquid's response triggered mixed reactions within the crypto community, with some praising the platform's validator network for containing an attack, while others saw it as a breach of decentralization principles. Despite the mixed reactions, the airdrop's success has been seen as a sign of deepening liquidity and growing investor confidence in Hyperliquid's model, which could lead to increased adoption of the platform.

Here's a quick rundown of the potential pros and cons for those who received the airdrop:

  • Pros:
    • Potential for significant financial gain, especially for early adopters.
    • Opportunity to participate in the governance of the Hyperliquid platform.
    • Increased awareness and adoption of the Hyperliquid ecosystem.
  • Cons:
    • Potential for increased selling pressure, leading to a short-term price drop.
    • Risk of volatility in the market price of HYPE.
    • Uncertainty regarding the long-term success of the project.

The Future of HYPE: What's Next?

Only time will tell the long-term impacts of the airdrop on HYPE’s price and the adoption of the platform as a whole. Multiple things will continue to determine HYPE’s future. These are the allocation schedule for emissions and community rewards going forward, the vesting period for team tokens, and market perception in general with respect to Hyperliquid.

Almost 100K eligible users will be receiving the airdrop. This added liquidity could bring about a wave of sell-side pressure, leading to the possibility of a short-term price decline. The allocation schedule for HYPE, which includes 38.88% for future emissions and community rewards, may incentivize long-term growth and adoption, potentially leading to a stable or increasing market price over time. Private team members were vested for a minimum of one year following the token generation event. It will make selling pressure more unlikely and change their interests to be more in line with the project’s long-term success.

These HYPE token holders currently possess exclusively governance rights. This new authority allows them to engage more meaningfully in planning and decision-making processes, deepening their community’s feeling of ownership and inclusion. The HYPE crypto briefly peaked at almost $13 billion market cap. It even went as high as $40, indicating deep enthusiasm and robust liquidity in the market. 76.2% of the project’s entire token supply is set aside to incentivize user-focused projects and development. This intense commitment to localized, bus rider-centric development is sure to build a devoted user community and help maintain lasting upward momentum on the token price.