From November to early December 2024, as the altcoin market strengthens, decentralized trading platforms are ushering in a new round of development opportunities. Binance has successively launched several DEX native tokens, including COW, AERO, and VELO, and the trading performance of these tokens has been impressive. Users are becoming increasingly accustomed to trading on DEX platforms. Market hotspots are also rapidly rotating: as the popularity of meme tokens in the Solana ecosystem cools, trading activity is beginning to shift to the Base chain and BSC chain. The rising star Hyperliquid has even attracted on-chain funds from Solana, with its total locked value (TVL) surging 14 times within a week, surpassing $2.8 billion, jumping to eighth place among all Layer 1 public chains.
I. Overview of the Hyperliquid Project
Project Background:
Hyperliquid is an innovative Layer 1 blockchain that utilizes the HyperBFY consensus algorithm, aiming for 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 offers a focus on an order book perpetual futures platform, bringing significant profit opportunities. At the same time, Hyperliquid also provides an auction mechanism to give new tokens a chance to be listed.
Industry Background:
Although the project has not publicly disclosed detailed team backgrounds and financing information, from its significant scale of capital inflow and professional quantitative trading systems, the market rumors about the founding team's background in Wall Street quantitative trading seem to have some 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 tried to establish decentralized trading platforms in the perpetual contract field in the past, CEX still dominates this market. Hyperliquid is gradually breaking this pattern through innovative trading mechanisms and optimized user experiences, capturing significant shares in the perpetual contract market and 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. With some cross-chain protocols, the previous total TVL had exceeded $3 billion, but ecosystem projects are lacking.
Significant funds have flowed into Hyperliquid, with $1.87 billion flowing in over the past week, ranking third in capital inflow, second only to Bitcoin and Ethereum. From the perspective of total TVL of DEX, Uniswap still dominates, with a market share of 23.95%, while Hyperliquid has surpassed Raydium with a share of 8.95%.
The total TVL of Dexes is: $ 27.6 Billion, among which:
Uniswap: 6.61 B (23.95%)
Hyperliquid: 2.47 B (8.95%)
Raydium: 2.3 2B (8.41%)
In all on-chain futures trading markets, Hyperliquid ranks first in trading volume, with a trading volume of $5.95 billion in the last 24 hours, and the platform's total trading volume has reached $532.88 billion.
II. Ecosystem Projects
The Hyperliquid ecosystem tokens have recently performed brilliantly, with the platform token HYPE once exceeding $29 and continuously setting new historical highs; currently, three tokens have market capitalizations exceeding $100 million, namely HYPE, PURR, and HFUN; and there are 17 tokens with market capitalizations exceeding $10 million. Accompanied by Hyperliquid's open and transparent token listing mechanism, and the emergence of platforms similar to Pump, many projects have sprung up like mushrooms after rain. The daily trading volume market share of HYPE has fallen from the initial approximately 92% to about 70%. Next, let's understand some of the tokens in the Hyperliquid ecosystem.
1) PURR
PURR is the first native token on Hyperliquid to implement the HIP-1 standard, a meme coin themed around cats. The token did not undergo an initial sale, but 50% of the tokens were airdropped to users based on their holding ratio, while the remaining 50% was added to the PURR/USDC liquidity pool (subsequently, under community suggestion, 40% of the tokens were burned). 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 closely related to its open and transparent token listing mechanism. First, if the project party wants to list on the spot, they need to apply for the deployment permission of the HIP-1 native token (HIP-1 is the token standard set by Hyperliquid), and then a Dutch auction mechanism will be used to determine who will finally get the token ticker.
In response to Hyperliquid's token listing auction mechanism, Hypurr Fun was born, where participating users invest funds and then compete for listing spots on Hyperliquid. We can check Hypurr token information and trading situations through the web version, including project introductions, token prices, market capitalization, trading volumes, 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 clearly very underdeveloped, and there is significant room for improvement, which makes it incomparable to other mature pump-type ecosystems. Because of this, there may be many Alpha opportunities.
3) FARMFARM is the first GenAI-related AI agent game built on Hyperliquid. Through the Genai model (Cryptokitties 2.0) + Stardew Valley (simulation game) + Pokemon GO (combat/e-sports), it supports users to carry out bio-synthesis on-chain through AI.
Official website: https://www.thefarm.fun/
The current product roadmap is designed in three phases, which will be launched consecutively. The first phase has already been launched on December 13, 2024, at 08:00 AM Eastern Time. Its token economic model allocates 20% to MM for ultra-liquidity, and 80% is distributed to participants of Hypurr Pump through a fair launch. 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.
4) RAGERage Trade is a derivatives and yield aggregation platform in the DeFi field. It launched on Arbitrum around 2022, known for its 'Delta Neutral GLP' strategy, which integrates GLP (GMX's LP token) and corresponding hedge positions to provide users with stable returns in volatile market conditions. Its core features include: ETH perpetual contracts with 10x leverage, full-chain circulating liquidity, and an 80-20 vault that generates returns. In August of this year, RAGE completed its public offering, raising $6 million in 15 minutes. According to previous news, Rage Trade released its tokenomics, where: 35% for token sales, 30% for community treasury, 15% for the team, 13.5% for private buyers, and 6.5% for airdrops. Currently, RAGE's market capitalization is approximately $22 million.
Summary
Currently, Hyperliquid has captured the largest market size for on-chain Perps, with a daily trading volume reaching $6 billion, and the market size is still growing. The platform attracts users with zero gas fees and a transaction fee of only 0.03%, and its trading execution speed can rival that of centralized exchanges, significantly reducing user trading costs. However, it seems that the platform's volume and revenue situation is not transparent to the outside world; it cannot be temporarily queried on DefiLlama, and its data can only be obtained on the Hype official website. According to public reports, the platform has over 50,000 active users per month. Despite Hyperliquid's impressive performance in user activity and daily usage, its operating model is closer to centralized exchanges, and there is still room for improvement in decentralized characteristics. This 'CEX-like' nature has also sparked community discussions about its actual level of decentralization.
