Author: Thor Hartvigsen
Translation: Azuma, Odaily Planet Daily
Background
Since the launch of HYPE, Hyperliquid has seen significant growth in both trading volume and revenue.
HYPE officially launched on November 29, with an opening price of around 2 dollars, and experienced significant increases in December, only recently experiencing a slight decline (down about 34% from the historical peak).
What’s next for HYPE and Hyperliquid?
This article will delve into the fundamentals of Hyperliquid and HYPE, exploring the bullish expectations for HYPE and analyzing potential valuations in conjunction with trading volume and revenue growth trends in 2025.
Trading Volume Data
Although some people expect that after the HYPE airdrop, trading volume on Hyperliquid will decline (this has historically occurred with other derivative exchanges), the opposite has happened. Since then, Hyperliquid's trading volume has increased significantly, repeatedly setting new daily trading volume highs exceeding 10 billion dollars.
The HYPE airdrop accounts for 31% of the total supply. An estimated 42.81% of the supply is expected to be available for future distribution and community rewards. While it is foreseeable that a portion of the remaining shares will be used for staking incentives and HyperEVM Layer 1 ecological incentives, the possibility for future traders and HYPE holders to receive some kind of reward again without knowing is not zero.
At a price of 25 dollars, 42.81% of the HYPE supply amounts to approximately 11 billion dollars.
Since the launch of HYPE, in addition to contract trading volume, Hyperliquid's spot trading volume has also significantly increased, with daily trading volume on most trading days ranging from 250 million to 500 million dollars.
Hyperliquid vs CEX
For a long time, I have been tracking the trading volume comparison between Hyperliquid and centralized exchanges (CEX) like Binance.
Over time, more and more users and trading volume are starting to shift to on-chain, and Hyperliquid's bullish expectations involve an increase in market share. Compared to Binance, there is clearly a long way to go. However, as shown in the chart below, Hyperliquid's market share showed a significant upward trend in December. Over the past two weeks, Hyperliquid's relative market share has been about 5-8%.
According to Coingecko data, Binance's recent daily derivatives trading volume ranges from 60 billion to 150 billion dollars. However, these trading volume figures cannot be verified from the CEX side, so caution is warranted.
Relative to Bybit, Hyperliquid's market share recently reached as high as 25% of the latter (peak data).
Transaction Fees and Revenue
Contract Trading
The fees above Hyperliquid are paid by trading users on the platform. Compared to other exchanges like Binance, Hyperliquid has lower fees, aimed at incentivizing more trading activity. For most users in perpetual contract trading, the fee for market orders is 0.035%, and for limit orders, it is 0.01%. The larger the trading volume, the lower the fees.
These fees are collected by the HLP market making vault, insurance fund, assistance fund (primarily responsible for repurchases), and several miscellaneous addresses on Hyperliquid. The Hyperliquid team has not publicly disclosed specific allocation details of the platform's trading fees, making it difficult to accurately estimate HYPE's repurchase data.
Spot Trading
Users pay transaction fees in the spot market to purchase and burn the specific tokens being traded. Unsurprisingly, HYPE currently accounts for a significant portion of Hyperliquid's spot trading volume. So far, the spot trading fees for HYPE have exceeded 100 thousand HYPE (over 2 million dollars at current prices).
Overall, compared to the repurchase from the aid fund, this has no substantial impact on HYPE's supply (at least not at the moment).
Spot Auctions
Hyperliquid has also generated significant revenue from spot auctions. Based on an auction price of 500 thousand dollars, Hyperliquid can generate an additional 141.29 million dollars annually.
Aid Fund and HYPE Repurchase
Although it is unclear how the revenue distribution from spot auctions and contract trading works, we can measure daily HYPE repurchase data through the aid fund.
Two weeks ago, I published an analytical article on X, analyzing the HYPE repurchase situation of the aid fund within 48 hours. At that time, a total of approximately 151,000 HYPE was repurchased within 48 hours, equivalent to an annual repurchase effort of about 686 million dollars.
During those two days, Hyperliquid's average daily trading volume reached 8 billion dollars.
Valuation Framework
Entering 2025, the bullish expectation for HYPE is a bet on the continued growth of Hyperliquid's trading volume and the ongoing demand for spot auctions, as this will lead to increased revenue for Hyperliquid, thereby amplifying the repurchase efforts of HYPE.
One key reason for the continuous growth in Hyperliquid's trading volume is that Hyperliquid still has billions of dollars available for future rewards, which will make it a very profitable trading venue. Other potential catalysts include spot listings on CEX and the launch of HyperEVM.
@fmoulin 7 did a great analysis on HYPE's potential valuation, assuming a P/E ratio of 30, with corresponding HYPE price expectations under different scales of contract trading fee income and auction revenue.
Hyperliquid's average daily trading volume over the past 14 days was approximately 4.89 billion dollars, with auction prices around 500 thousand dollars.
In light of this, we have arrived at a projected annual revenue of 587.5 million dollars for Hyperliquid, assuming a price-to-earnings ratio (P/E) of 30, which means HYPE could potentially reach 52.78 dollars. Please note that this calculation is based on market capitalization rather than FDV, as future unlocks are mostly related to community incentives rather than internal group unlocks.
Additionally, two points are worth noting: as of now, almost all of this revenue will be used to repurchase HYPE; an increasing amount of HYPE has been staked (currently about 25%), which effectively reduces the liquid supply.
In summary, if you believe that Hyperliquid's trading volume and adoption rate will continue to grow, there are many reasons to be bullish on HYPE over a longer time frame.