From November to early December 2024, as the altcoin market strengthened, decentralized trading platforms welcomed a new round of development opportunities. Binance has gradually launched several DEX native tokens, including COW, AERO, and VELO, all of which have performed remarkably well in trading. Users are increasingly accustomed to trading on DEX platforms. Market hotspots are also shifting rapidly: as the popularity of meme tokens in the Solana ecosystem cools, trading activity has begun to shift towards the Base chain and BSC chain. The rising star Hyperliquid has drained on-chain funds from Solana, with its total locked value (TVL) surging 14 times in just one week, surpassing $2.8 billion, making it the eighth among all Layer 1 public chains.

I. Overview of Hyperliquid Project

Project Background: Hyperliquid is an innovative Layer 1 blockchain that utilizes the HyperBFY consensus algorithm, aiming to achieve high throughput and low-cost transactions, with block delays of less than one second, designed for DeFi applications. With its native token HYPE and a fully on-chain decentralized exchange, Hyperliquid provides a platform focused on order book perpetual futures, offering significant profit opportunities. At the same time, Hyperliquid also provides an auction mechanism to give new tokens the chance to be listed.

Industry Background: Although the project has not publicly disclosed detailed team backgrounds and financing information, based on its significant inflow of capital and professional quantitative trading system, the rumors about the founding team having a Wall Street quantitative trading background hold a certain degree of credibility.

Competitors: Hyperliquid's core business focuses on order book perpetual futures trading, competing with platforms like Uniswap and Jupiter in the DEX track while also challenging traditional centralized exchanges like Binance and Coinbase. This strategic positioning reflects the market's growing demand for trading transparency and security. Although several projects have attempted to establish decentralized trading platforms in the perpetual contract field, CEX still dominates this market. Through innovative trading mechanisms and optimized user experiences, Hyperliquid is gradually breaking this pattern and gaining significant market share in the perpetual contract market, challenging the dominance of CEX.

Ecosystem Data:

The ecosystem TVL ranks 8th among all Layer 1 blockchains, with a current total locked value (TVL) of $2.466 billion. Previously, the total TVL had surpassed $3 billion, but ecosystem projects remain scarce.

Significant funds have flowed into Hyperliquid, with $1.87 billion inflows in the past week, ranking third in fund inflows, only behind Bitcoin and Ethereum. From the perspective of total DEX TVL, Uniswap still dominates, with a market share of 23.95%, while Hyperliquid has surpassed Raydium with a share of 8.95%.

Total TVL of Dexes: $27.6 Billion, including

Uniswap: $6.61B (23.95%)

Hyperliquid: $2.47B (8.95%)

Raydium: $2.32B (8.41%)

In all on-chain futures trading markets, Hyperliquid ranks first in trading volume, with a recent 24-hour trading volume reaching $5.95 billion, and the platform's total trading volume has accumulated to $532.88 billion.

II. Ecosystem Projects

The recent performance of Hyperliquid ecosystem tokens has been impressive, with the platform token HYPE once exceeding $29 and continuously setting historical highs. Currently, three tokens have a market capitalization exceeding $100 million, namely HYPE, PURR, and HFUN; additionally, 17 tokens have a market capitalization exceeding $10 million. Along with Hyperliquid's open and transparent listing mechanism and the emergence of platforms similar to Pump, many tokens have surged like mushrooms after rain. HYPE's daily trading volume market share has decreased from the initial approximately 92% to about 70%. Next, let's explore some of the tokens in the Hyperliquid ecosystem.

1) PURR

PURR is the first native token on Hyperliquid to execute the HIP-1 standard, a meme coin with a cat theme. This token did not conduct an initial sale but airdropped 50% of the tokens to users based on their holding ratios, while the remaining 50% was added to the PURR/USDC liquidity pool (subsequently, 40% of the tokens were burned at the community's suggestion). As of December 18, PURR's market capitalization is approximately $296 million, making it the official meme token on Hyperliquid with high community consensus.

2) HFUN

This project can be seen as Pump.fun on Hyperliquid, with a Telegram trading bot designed specifically for it. As we know, Hyperliquid's success is largely due to its open and transparent listing mechanism. Firstly, if a project wants to go live with spot trading, it must apply for the deployment rights of the HIP-1 native token (HIP-1 is the token standard set by Hyperliquid). Then, a Dutch auction mechanism will be used to determine which token ticker will ultimately be assigned.

In response to the listing auction mechanism of Hyperliquid, Hypurr Fun was born, allowing participating users to invest funds and then compete for a spot for spot tokens on Hyperliquid. We can query Hypurr token information and trading conditions through the web version, including project introduction, token price, market capitalization, trading volume, and other basic information. Currently, trading is only supported through the Telegram Bot.

Website: https://app.hypurr.fun/launches

Trading bot: https://t.me/HypurrFunBot

Currently, Hypurr Fun is still in its early stages and is continuously rising. The tools are noticeably very incomplete, with significant room for improvement, and cannot be compared to other mature pump-type ecosystems. Because of this, there may be many Alpha opportunities.

3) FARM

FARM is the first GenAI-related AI agent game built on Hyperliquid. It supports users to conduct bio-synthesis on-chain through a Genai model (Cryptokitties 2.0) + Stardew Valley (simulation game) + Pokemon GO (battle/eSports).

Official website: https://www.thefarm.fun/

Currently, the product roadmap includes three phases, which will be continuously launched. The first phase has already gone live on December 13, 2024, at 08:00 AM Eastern Time. Its token economic model allocates 20% to MM for ultra liquidity and 80% through a fair launch method to participants of Hypurr Pump. Its supply is fixed, and FARM will not be minted further. Additionally, 50% of the fees collected in FARM will be automatically burned, and 50% of the profits will be used to repurchase circulating supply and burn it.

4) RAGE

Rage Trade is a derivatives and yield aggregation platform in the DeFi space. It was launched on Arbitrum around 2022 and is known for its 'Delta Neutral GLP' strategy, which provides users with stable returns in volatile market conditions by integrating GLP (GMX's LP token) with corresponding hedging positions. Its core features include: ETH perpetual contracts with 10x leverage, cross-chain circular liquidity, and an 80-20 vault that generates yield.

In August of this year, RAGE completed a public offering, raising $6 million in 15 minutes. According to previous news, Rage Trade released its token economics, which includes: 35% token sales, 30% community treasury, 15% team, 13.5% private buyers, and 6.5% airdrop. Currently, RAGE's market capitalization is approximately $22 million.

Summary

Currently, Hyperliquid has captured the largest scale of the on-chain Perps market, with daily trading volumes reaching as high as $6 billion, and the market scale is still growing. The platform attracts users with zero gas fees and only a 0.03% trading fee, and its trading execution speed can rival that of centralized exchanges, significantly reducing trading costs for users. However, the platform's volume and revenue situation seem not transparent, as it is temporarily unavailable on DefiLlama, and its data can only be obtained on Hype's official website. According to public reports, the platform has over 50,000 monthly active users. Although Hyperliquid shows impressive performance in user activity and daily usage, its operating model is closer to that of a centralized exchange, indicating room for improvement in decentralized characteristics. This 'CEX-like' attribute has also sparked community discussions regarding its true level of decentralization.