Original author: Nancy, PANews
Reprinted: Lawrence, Mars Finance
Listing fees have always been a controversial focus in the market, especially as exorbitant listing fees are often seen as a major obstacle to market innovation. Therefore, more and more emerging projects choose to launch on DEX (decentralized exchanges) as their first choice, but at the same time, Rug risks have also significantly increased.
Recently, the derivatives DEX Hyperliquid successfully staged a textbook airdrop, not only yielding bright performance in multiple data points but also setting a new high for its spot listing auction prices, further enhancing the platform's market advantage. Under strong data, according to PANews, many projects have already turned their attention to listing on Hyperliquid.
The auction price for listing has significantly increased after the airdrop, and spot trading liquidity is concentrated in HYPE.
On December 6, a token ticket named 'SOLV' refreshed Hyperliquid's auction record at approximately $128,000, drawing attention from many investors, and was suspected to be related to the Solv Protocol, which announced an upcoming TGE (Token Generation Event).
According to official documents, for a project team to list on Hyperliquid, they must obtain the deployment rights for the native HIP-1 token. HIP-1 is the native token standard established by the protocol for spot trading and creates an on-chain spot order book, similar to ERC20 on Ethereum. However, to gain permission for new token issuance, projects typically need to participate in a Dutch auction, which usually takes place every 31 hours, meaning a maximum of 282 token codes can be deployed each year.
This auction fee can also be understood as the Gas fee for deployment, currently paid in USDC. During the 31-hour auction period, the deployment Gas fee gradually decreases from the initial price to a minimum of 10,000 USDC. If the previous auction was not completed, the initial price is 10,000 USDC; otherwise, the initial price will be twice the last final Gas price. The introduction of this auction mechanism not only avoids excessive speculation and irrational price increases due to high prices but also dynamically adjusts the listing speed of new tokens based on demand. It is precisely this mechanism that ensures that the number of tokens on the Hyperliquid market will not be excessive, prioritizing high-quality projects for listing.
From past auction situations, ASXN data shows that as of December 10, Hyperliquid has conducted over 150 auctions since May of this year. Looking at the auction prices, Hyperliquid's airdrop has become an important turning point, with auction prices before December generally below $25,000, and even some reaching millions of dollars. The tokens participating in the auctions were mostly MEME tokens, such as PEPE, TRUMP, FUN, LADY, and WAGMI. However, this month's auction prices have risen significantly, with auction prices for SOLV at about $112,000, BUBZ at about $118,000, GENES at about $87,000, etc. This also reflects that the market demand and interest in Hyperliquid have seen noticeable growth following the airdrop.
However, from the liquidity of the hundreds of HIP-1 tokens that have been launched, it is mainly concentrated in a few projects. Hyperliquid trading data shows that as of December 10, the platform had launched over a hundred HIP-1 tokens, with a total trading volume of about $240 million in the past 24 hours, of which the Hyperliquid token HYPE accounted for 85.9% of the total trading volume. The leading MEME project in its ecosystem, PURR, accounted for over 6.7%, while the remaining projects combined only accounted for 7.4% of the liquidity. This is related to Hyperliquid's primary focus on derivatives trading, with the spot market gradually taking shape after the rise of MEME.
'Compared to CEXs, Hyperliquid currently has very few spot trading opportunities. If a major project wins a Hyperliquid spot position through an auction, it would actually be a strong partnership. As an on-chain exchange, we are happy to see more high-quality large projects listed or launched through auctions; the USDC asset accumulation above can also focus more on the speculation of newly launched assets,' analyst @defioasis recently pointed out.
Multiple data points performed brilliantly after the airdrop, potentially making it a strong competitor for listings.
With outstanding market performance and innovative listing strategies, Hyperliquid may become one of the important competitors for listing applicants.
On the one hand, the wealth effect of Hyperliquid's airdrop and the continuous surge in token prices have become the best marketing strategy, resulting in a surge in project popularity while Hyperliquid's performance in multiple data points remains strong.
From the performance of token prices, compared to most projects that experienced a general drop in prices after the airdrop, Hyperliquid's token HYPE's FDV (Fully Diluted Valuation) has skyrocketed. CoinGecko data shows that HYPE's circulating market cap once reached $4.96 billion, now slightly rebounded, and the current FDV has reached $13.21 billion, peaking at $14.85 billion.
At the same time, Hyperliquid has a strong competitive advantage in the derivatives DEX sector. According to data from The Block on December 9, Hyperliquid's trading volume reached $9.89 billion that day, accounting for 58.4% of the entire sector (approximately $16.92 billion).
Currently, Hyperliquid has also accumulated a significant amount of asset volume. According to DeFiLlama data, as of December 10, Hyperliquid Bridge's TVL reached $1.54 billion. With the platform's large asset pool, if Hyperliquid launches more high-quality projects, it may further unleash trading potential.
In addition, in terms of fundraising ability, Hyperliquid has demonstrated strong profitability. According to research analysis by Yunt Capital's @stevenyuntcap, Hyperliquid's revenue includes instant listing auction fees, profits and losses from HLP market makers, and platform fees. The first two are public information, but the team recently explained the last revenue source. Based on this, it can be estimated that Hyperliquid's revenue from the beginning of the year to date is $44 million. When HYPE launched, the team used the Assistance Fund wallet to purchase HYPE in the market; assuming the team doesn't have multiple USDC AF wallets, the USDC AF's profit and loss from the beginning of the year to date is $52 million. Therefore, adding HLP's $44 million and USDC AF's $52 million, Hyperliquid's revenue from the beginning of the year to date is about $96 million, surpassing Lido and becoming the 9th most profitable crypto project in 2024.
All of these data also showcase Hyperliquid's attractiveness and competitiveness in the market.
On the other hand, Hyperliquid's listing mechanism is more transparent and fair. It is well known that the controversy over listing fees has a long history, including a recent widespread debate within the community regarding the listing fees charged by Binance and Coinbase.
Opponents argue that rising listing fees undoubtedly impose a heavy economic burden on the early development of projects, often forcing them to sacrifice their long-term development potential, thereby impacting the overall health of the ecosystem. Arthur Hayes once disclosed in his article that among the leading CEXs, such as Binance, the highest fee charged is 8% of the total token supply for listing, while most other CEXs charge between $250,000 to $500,000, typically paid in stablecoins. He believes that there is nothing wrong with CEXs charging listing fees, as these platforms invest a significant amount of capital to build a user base, which needs to be recouped. However, as advisors and token holders, if a project gives tokens to a CEX instead of to users, it will harm the project's future potential and negatively impact the token's trading price.
However, proponents argue that listing fees are part of the operational costs of exchanges and can serve as an effective tool for screening project quality. By charging certain fees, exchanges can not only ensure the sustainable operation of the platform but also ensure that listed projects have a certain economic strength and market recognition, thereby reducing the influx of low-quality projects and maintaining market order and healthy development.
In response, IOSG partner Jocy has previously put forward several suggestions. First, exchanges need to enhance information transparency and impose strict penalties on problematic projects; second, exchanges should implement departmental interest isolation to avoid conflicts of interest; finally, thorough due diligence must be conducted to ensure a diversified decision-making process and to say 'no' to any form of project fraud.
In addition to exchanges, project teams should not rely on CEX listings, but rather depend on user participation and market recognition. For example, Binance founder CZ recently stated, 'We should strive to reduce such 'quote attacks' in the industry. Bitcoin has never paid any listing fees. Focus on the project, not the exchange.' Arthur Hayes also noted that the biggest problem with current token issuance is the excessively high initial price. Therefore, regardless of which CEX obtains the initial listing rights, it is almost impossible to achieve a successful issuance. At the same time, for those project teams that blindly pursue listings on CEX, selling tokens to the listing trading platform can only be done once, while the positive flywheel effect created by increasing user participation will continue to yield returns. Crypto researcher 0xLoki has also stated that to forge iron, one must be strong, and any sufficiently good project will be listed by any exchange. If one has to accept extremely harsh terms to list on an exchange, the motivations of the project team must be considered: Is the project really good enough? What is the true purpose of listing on an exchange? Who ultimately bears the cost?
Ultimately, the controversy over listing fees revolves around the transparency and fairness of the fees, as well as the project's potential for sustainable development. Compared to the opacity and high costs faced in the CEX listing process, Hyperliquid's listing auction mechanism can reduce listing costs and enhance market fairness, thereby ensuring that assets on the platform possess higher value and market potential. At the same time, Hyperliquid returns listing fees to the community, which also helps incentivize more users to participate in trading.
Overall, in the current market environment, how to balance listing fees with the long-term development of projects has become a core issue that the industry urgently needs to think about and resolve.
