Summary
Hyperliquid is an innovative decentralized platform focused on efficient perpetual contract trading. It provides perpetual contracts, spot trading, and a low-latency and high-throughput Layer 1 chain trading environment. It uses HIP-1 and HIP-2 to enhance liquidity, does not require KYC, has low handling fees, supports HyperEVM to develop DeFi applications, and incentivizes community participation through HYPE tokens. As of December 2024, it has 230,000 users, a trading volume of US$500 billion, and an asset deposit of 1.12 billion USDC. The ecosystem includes projects such as PURR, HFUN, and farm. The total supply of HYPE tokens is 1 billion, which will be distributed in a variety of ways to incentivize ecological development. The team is composed of experts in the field of trading, led by Jeff, and refuses external investment. It is committed to becoming a top high-performance public chain, focusing on user experience and decentralization principles, and attracting more users and developers to enrich its ecosystem.
Project Introduction
Hyperliquid is an innovative decentralized trading platform that focuses on efficient perpetual contract trading. It has attracted a large number of users and investors through its unique liquidity aggregation technology and the distribution strategy of its native token HYPE.
Website: https://app.hyperliquid.xyz/
Twitter: https://x.com/HyperliquidX
Figure 1 Hyperliquid product development
1. Product Features
Perpetual Futures Trading: Users can trade perpetual futures with no expiration date on Hyperliquid, supporting up to 50x leverage.
Spot Trading: In addition to derivatives, Hyperliquid also supports spot trading, enabling users to buy and sell crypto assets directly.
High-Performance L1 Chain: Hyperliquid is built on its own Layer 1 blockchain, which supports high throughput and low latency, providing a near-instant transaction experience.
HIP-1 and HIP-2 standards: HIP-1: Allows native tokens to be deployed on the chain and creates spot order books.
HIP-2: The “Hyperliquidity” mechanism provides an innovative way to ensure liquidity, permanently locking HIP-1 tokens in the spot order book.
Transactions without KYC: As a decentralized platform, Hyperliquid does not require users to undergo identity verification (KYC), providing higher privacy protection.
Low fees: Hyperliquid’s transaction fees are set low, especially the negative fee model for market makers, which encourages users to provide liquidity.
HyperEVM support: Hyperliquid supports an enhanced EVM, allowing developers to build various DeFi applications on it while seamlessly connecting with native components.
Community participation and rewards: Through a points system and airdrops, Hyperliquid encourages users to participate and contribute to the development of the ecosystem. The distribution strategy of HYPE tokens is also designed to incentivize long-term community participation.
2. Advantages of HyperLiquid
Decentralization and transparency: As a decentralized platform, Hyperliquid provides fully transparent transaction records and a KYC-free trading experience, enhancing user privacy and security.
High-performance trading: Built on its dedicated Layer 1 chain, Hyperliquid supports high throughput and low latency, providing fast trade execution with reduced slippage.
Innovative liquidity mechanism: Through the HIP-1 and HIP-2 standards, Hyperliquid introduced a new liquidity model, “Hyperliquidity” to ensure market depth and stability.
Low transaction fees: The negative fee strategy for market makers and the overall low fee structure significantly reduce transaction costs and attract more traders.
Multiple trading products: Support perpetual contracts and spot trading to meet the trading needs of different users.
User Incentives: Through the distribution of HYPE tokens and community participation rewards, Hyperliquid incentivizes users to participate and contribute in the long term to build an active ecosystem.
Community governance: A community governance mechanism will be introduced in the future, allowing users holding HYPE tokens to participate in the platform's decision-making process.
EVM compatibility: HyperEVM supports developers and applications in the EVM ecosystem, expanding its application possibilities in the DeFi field.
Compliance and openness: Despite being decentralized, Hyperliquid is committed to compliance, ensuring its services can operate legally around the world.
Figure 2 Technical principle of HyperLiquid
Source: HyperLiquid
3. Data Analysis
Hyperliquid is customized as a high-performance derivatives exchange Layer 1 and is compatible with EVM. Depositing assets in Hyperliquid is mainly done through Arbitrum Bridge, which currently supports USDT, USDC.e, and USDC assets on Arbitrum, but only supports USDC as collateral. As of December 14, the assets in the Hyperliquid Deposit Bridge contract: 0x 2 D…3d F 7 reached 1.12 billion USDC and are still growing. If Hyperliquid's capital is compared with CEX's clean assets, Hyperliquid can rank as the 14th largest exchange in the world, surpassing MEXC (about 1.09 billion US dollars), and its next target is Bitget (about 3.27 billion US dollars).
Figure 3 Comparison of asset deposits between HyperLiquid and various cex
Source: @defloasis
Overall data: As of December 14, the total number of HyperLiquid users has reached 230,000, and the total transaction volume has reached 500 billion US dollars.
Figure 3 HyperLiquid overall data
Source: HyperLiquid
Hyperliquid Assistance Fund, which has made over $82 million
The funds of Hyperliquid Assistance Fund mainly come from the contract transaction income of the Hyperliquid platform, that is, part of the USDC fees will go into this fund to support various activities of the platform, mainly including the repurchase of HYPE tokens. According to hypurrscan browser, from December 5 to December 9 at 19:00 UTC+8, Assistance Fund repurchased 567,083.22 HYPE from the secondary market, with a repurchase value of US$7,364,369.45, and an average price of about US$12.99.
Figure 4 Hyperliquid Assistance Fund funding changes
Source: defioasis
4. Token Ticket Auction to Obtain Spot Seats
Projects that want to go online on Hyperliquid need to obtain the right to issue new tokens through the Dutch auction mechanism, which is usually held every 31 hours. For a long time, Hyperliquid has focused more on derivatives trading, and most of the participants in the Dutch auction of Token Tickets are Memes, and the auction price will hardly exceed $20,000. However, with the wealth effect and popularity brought about by HYPE TGE, and with the opening of Hyperliquid EVM, it is expected that more types of projects will consider issuing tokens on Hyperliquid. In addition, some important Tickets that were once auctioned at low prices may be selected by a regular project of the same name in the future, becoming a shell for listing on Hyperliquid, and then bought back from the original project at a high price.
In recent auctions, the final price has risen sharply. The token ticket of "SOLV" set a new record of Hyperliquid auction at $128,000 on December 6. Considering that Solv Protocol is about to hold TGE, it is very likely that this "SOLV" is the same SOLV. If so, Solv Protocol will become the first major project to log in to Hyperliquid.
Hyperliquid Ecosystem Analysis
Many people think that Hyperliquid is a decentralized derivatives exchange, but its essence is a 0g as high-performance L1 public chain. And the market value of $HYPE tokens has reached 20 billion US dollars, which can be directly compared with Sui and Solana. Many high-quality projects have emerged in the ecosystem:
1. Ecosystem meme leader: PURR
Twitter: https://x.com/hyperintern
This is Hyperliquid's leading meme project, with a market value of 340 million US dollars and a daily trading volume of 65 million US dollars, which is already a very large scale.
2. Token launch platform in the ecosystem: HFUN
Website: https://hypurr.fun/
It can be simply understood as the pumpfun on the Solana chain. The current market value is 150 million US dollars, and the daily trading volume is 20 million US dollars.
3. The first AI agent project: farm
Twitter: https://x.com/thefarmdotfun
It can be simply understood as a project like ai16z or virtual. The current market value is 36 million US dollars and the daily trading volume is 43 million US dollars.
Overall, HyperLiquid's decentralized derivatives business has been very well developed. Both the user experience and liquidity are top-notch. However, the ecosystem is still on the eve of an explosion.
Figure 5 HyperLiquid market data
Data source: HyperLiquid
Token Economic Model
Total Supply: The total supply of HYPE tokens is 1 billion.
Token Distribution: Genesis Distribution: 31% of the tokens (310 million) were allocated to users who participated in the Genesis event, and these tokens have been fully unlocked.
Future Emissions and Community Rewards: 38.888% of tokens are used for future emissions and community incentives, including distribution through activities, points and participation rewards.
Core Contributors: 23.8% are allocated to the team and early contributors. These tokens will be locked for one year after genesis, most will be unlocked in 2027-2028, and some will continue to be unlocked after 2028.
Hyper Foundation Budget: 6% is used to support the development and ecosystem construction of Hyperliquid.
Community Grants: 0.3% are used to provide funding for community projects.
Hyperliquidity (HIP-2): 0.012% is allocated to the Hyperliquidity mechanism for permanent liquidity locking.
Usage: Transaction Fees: HYPE tokens can be used to pay transaction fees for transactions on the Hyperliquid platform.
Governance: A governance mechanism may be introduced in the future, and users holding HYPE tokens can participate in the decision-making of the platform.
Incentives: Points systems and airdrops are used to incentivize user participation and liquidity provision.
Points system: Earn points through trading volume, participation in activities, etc. These points can be converted into HYPE tokens or other rewards to promote user activity and the healthy development of the platform ecosystem.
No Private Offerings or Centralized Exchange Allocations: Hyperliquid has not reserved HYPE tokens for private investors, centralized exchanges, or market makers in order to maintain its decentralized ethos.
Team Background
Hyperliquid's team is composed of experts who have served as market makers in centralized exchanges and have provided services to multiple large platforms between 2020 and 2022. Currently, the only real name is the founder of HyperLiquid, Jeff (https://x.com/chameleon_jeff)
Investment and Financing Background
No, no investment was accepted from any institution.
Project Summary
HyperLiquid’s ultimate goal is to build a top-level high-performance L1 public chain. Founder Jeff learned from the dilemma of no one trading after the airdrop of other decentralized derivatives exchanges that only by putting users first can the project be truly guaranteed to go further and better. Therefore, the project rejected all investment institutions and cooperation. And did not actively go online on any centralized exchange. 31% of the tokens were directly airdropped to users. And the project maintains the characteristics of ultra-low transaction fees and 0g as fees. This is the final form of a decentralized derivatives exchange. With the improvement of the project ecosystem, more top developers and users will enter the HyperLiquid ecosystem.
