A new altcoin, Hyperliquid (HYPE), is quickly making waves in the cryptocurrency market and is currently ranked as the 28th largest cryptocurrency by market cap. This rise has seen HYPE surpass established coins such as Near Protocol (NEAR), with its value surging 204% in just two weeks to a market cap of approximately $8.93 billion.
Explore the Hyperliquid Protocol
Studying the altcoin’s offering is crucial to better understanding the increased attention it has received over the past week.
HYPE is the native token of Hyperliquid, a layer 1 (L1) blockchain that uses HyperBFT technology. The tool reportedly allows Hyperliquid to facilitate “fast, secure and transparent transactions,” bridging the gap between centralized exchanges (CEX) and decentralized exchanges (DEX).
Specifically, Hyperliquid addresses the performance limitations typically associated with other blockchains (such as Solana (SOL) and Ethereum (ETH)) by being able to process over 100,000 transactions per second with a delay of less than one second.
The tokenomics of HYPE includes a burn mechanism to control supply and support price stability, a common practice in tokens like Shiba Inu (SHIB). A strict vesting schedule has also been established to balance liquidity and alleviate sell pressure.
The token offers investors various utility options, including trading fee discounts, staking opportunities, and governance participation. HYPE holders can enjoy reduced trading fees, which can significantly enhance profitability, while staking tokens allows them to earn rewards or provide liquidity in trading pools.
Will the new product launch and HyperEVM introduction drive speculation?
The latest insights from cryptocurrency analyst Ericonomic also highlight several compelling reasons to remain optimistic about HYPE, despite a short-term adjustment in layer 1 altcoins.
Analysts pointed out that the deposit amount of Hyperliquid's Circle stablecoin USDC has reached an all-time high, indicating strong demand, while auction prices have also reached unprecedented levels, with well-known entities like MON Protocol making significant purchases.
The total amount of USDC held on Hyperliquid surged, indicating strong liquidity. Additionally, many savvy traders have invested millions of dollars in HYPE and publicly supported the token, demonstrating confidence in its future potential.
Retail investors have not yet entered the market on a large scale, as HYPE has not been listed on primary centralized exchanges. If these traders' attention to HYPE's price is high enough, it could become a significant catalyst for its price.
Ericonomic further compared HYPE with Binance Coin (BNB) and noted that HYPE holders enjoy a fairer fee distribution, as all generated fees are directly returned to the Hyperliquid protocol.
Furthermore, the community expects several catalysts to emerge, including new listings on major cryptocurrency exchanges and the introduction of HyperEVM, which can significantly enhance the platform's functionality.
At the time of writing, HYPE has pulled back from its historical high of $42 set on December 12 and stabilized at a level of $26.91.
Despite this adjustment, the token's weekly increase has still exceeded 105%, with trading volume reaching $342 million. Looking ahead, it remains to be seen whether there are sufficient catalysts to support the token after the recent adjustment.
