Hyperliquid, which has dual identities of EVM public chain and DEX, finally issued an airdrop recently. This project, which focuses on people without VC background, distributed 31% of the tokens in the airdrop at one time, and has been soaring since its opening. In 2024, when many airdrop parties are generally rejected, Hyperliquid’s airdrop distribution may be regarded as a successful case. At present, the market value of the token has surpassed that of the established on-chain derivatives exchange dydx and Jupiter of the Solana chain.

31% token genesis airdrop, HYPE soars without selling pressure

On November 28, Hyperliquid officially announced airdrop related announcements. The TGE of the HYPE token occurred at 07:30 UTC on November 29, and Hyperliquid itself is the only trading venue and does not provide any chips for the exchange to list the currency.

As for the token economics part:

38.888% for community rewards, 31.0% for genesis airdrop, 23.8% for core contributors, 6.0% for the Hyper Foundation for budget provision, 0.3% for community grants, and 0.012% for HIP-2 (which can be understood as Hyperliquid providing liquidity).

Hyperliquid is a high-performance Layer 1. It has its own proof-of-stake consensus algorithm, HyperBFT. It can process 200,000 transactions per second, and the final confirmation time is about 0.2 seconds. HYPE will be used to pay for on-chain gas fees and for PoS staking purposes.

The announcement emphasizes that there is no allocation for private investors, centralized exchanges, or market makers, aligning with the narrative against VC and centralized exchanges charging listing fees since the second half of this year. The tokens for core contributors will be locked for one year. Most of the unlocking will occur between 2027 and 2028, with some continuing after 2028. It's worth mentioning that Hyperliquid co-founder Jeff Yan previously worked at Hudson River Trading, so he is quite familiar with high-frequency market making.

I love places with fewer people; the HYPE points system benefits early users.

We will meticulously review Hyperliquid's airdrop plan. The first phase of Hyperliquid's points program starts on November 1, 2023, distributing one million points weekly to active users. The distribution shares will be determined by trading volume. The points from the first phase snapshot will be distributed on April 15, 2024. Initially, Hyperliquid did not have much mention among the Chinese community, so the points during the first few weeks were relatively less competitive. If this phase is missed, retail investors may not be able to compete with large holders and market makers later on.

The second phase will distribute 700,000 points weekly for four months. Subsequently, the official announcement on May 29 stated that points would be doubled during the activity period from May 1 to 28. The first snapshot time for the second phase covers May 29 to June 4. Additionally, Hyperliquid has a referral code system, and before the airdrop, the official announcement indicated that witch addresses would be severely punished.

HYPE has thrown 1.8 billion USD, making it the largest airdrop this year.

Before the deadline, the price of HYPE tokens has skyrocketed since TGE, reaching about 8.24 USD before the deadline, with an FDV of 8.24 billion USD and a circulating market value of 2.79 billion USD, all from airdrop shares. In contrast, dydX has an FDV of about 1.28 billion USD, and Jupiter has an FDV of 11.66 billion USD. However, some believe that the trading of this token is limited to Hyperliquid itself, and its price may be somewhat inflated.

From another perspective, Hyperliquid's TVL of 1.43 billion USD ranks tenth among all public chains. As a public chain that has emerged unexpectedly within a year without institutional funding, this is quite an achievement. Besides announcing from the start that there is no VC participation, leaving no chips for market makers and listing fees for exchanges, these features resonate well with retail investors. A substantial 31% of tokens were allocated to airdrop players, which is significant in building good relationships with the community and creating topics for the protocol; however, the 31% airdrop could also lead to considerable selling pressure in the future.

The daily coin research team also pointed out that Hyperliquid became the project with the largest airdrop share after TGE, with an airdrop equivalent to 1.8 billion USD. In comparison, Starknet had 1.6 billion USD, Arbitrum had 1.5 billion USD, dYdX had 1 billion USD, Wormhole had 1 billion USD, and Eigenlayer had 850 million USD.

Recently, the Movement that announced the token economics also stated that it would provide 10% of tokens for airdrop, and the wealth effect it could create is worth looking forward to. However, former Scroll researchers have also hinted that Movement provides a large amount of chips to exchanges as listing fees, although this part has not yet been verified, it also serves as a warning.

(Crypto 8 PM: From technical disputes to macro L2 value issues, what are Rushi and former Scroll researchers arguing about?)

This article reviews the most successful airdrop of the year: How did Hyperliquid become a narrative and token economics textbook? Originally appeared in Chain News ABMedia.