Recently, Hyperliquid, this decentralized exchange, has become very popular. Some big influencers have even claimed that this is the narrative of this bull market, saying it will surpass Binance in this bull market. I don't know how much money they received or how many confused retail investors this will mislead, so I wrote this article to debunk their so-called reasons one by one and clarify the truth. I know this article will offend many KOLs, but it doesn't matter; I'm not part of your circle.

First, let's start with the airdrop that made Hyperliquid famous

Hyperliquid has distributed a total of 310 million tokens, with an opening price of 2 USD. Many supporters say this is a manifestation of decentralization and fairness. Now let's look at the airdrop; Hyperliquid's airdrop is in the form of points, with three sources.

perp (contract trading)

Contracts have data showing that with 2 million USD playing contracts, the final profit is 140,000 USD.

HLP (providing liquidity, acting as a counterparty for perp trading, with low risk and financial returns)

The later the Tvl rises, the lower the weight becomes, and the fewer points you get. If you are not an early user, you have to be a later large fund; retail investors can only participate early.

spot (spot trading)

Finally, the most suitable way for retail investors, personal testing in the last month:

Buying $30 of purr = 1 point

(1 point = 5.35 Hype)

Buying $12 of jeff = 1 point

Buying $51 of hfun = 1 point

Buying $15 of points = 1 point

In terms of results, Spot has pulled up across the board, but of course, you don’t know the outcome before buying, and you bear the risk of losing everything. Assuming you buy one of each, you get an average of 5.35 Hype for about 27 USD. The entry price is around 5 USD each. Overall, it's mainly the early users and large investors during the process that profit more, and there is the possibility of insider trading and front-running. The average airdrop of Hype is several thousand, while the median is only 60, which indirectly supports this viewpoint.

Now let's talk about Binance's BNB. When BNB was issued in July 2017, the quantity was 200 million. The token distribution plan was: founding team (40% or 80 million BNB), angel investors (10% or 20 million BNB), and public sale (50% or 100 million BNB) at a public issuance price of 0.15 USD each! Whether you knew this information early or later, as long as you participated in the ICO before the token was issued, you could buy one for 0.15 USD. This eliminates early insider trading, and later attracts large funds like a Ponzi scheme, leaving retail investors with nothing.

Then let's talk about security

Hyperliquid is a hot topic; it was established less than two years ago, has not experienced any black swan events, and has only recently become well-known, with little capital before.

Binance was established in July 2017 and has survived for 7 years. The various incidents like FTT will not be listed one by one. It has mainly experienced domestic liquidation, fines from the US, and has been targeted by both Eastern and Western powers, yet it still stands tall, maintaining the title of 'the largest exchange in the universe.' Before the collapse of FTX’s FTT token, its valuation was around 100 billion USD. FTX was discovered to have misappropriated 10 billion USD of user assets, causing a run and a gap of 5 billion USD. Unable to fill this gap and with the price drop, it formed a death spiral collapse. On November 21, 2023, Binance agreed to a fine of 4.3 billion USD, and the founder was arrested, yet they remain unharmed.

Next, let's talk about profitability

I think profitability is the most important and tangible aspect; you can tell whether it's a mule or a horse just by trying it out. Currently, Hyperliquid's contract volume is one-tenth of Binance's, with earnings of about 100 million USD since the beginning of the year.

Binance's revenue in 2023 is about 12 billion USD, while the current market value of BNB is 105.5 billion USD, and the diluted market value of Hype is 28.6 billion USD, with revenues differing by 120 times, but market values only differing by 3.5 times.

From the perspective of user numbers

The user data that Hyperliquid obtained varies widely; some say hundreds of thousands, others say twenty thousand, and because there is no KYC, the accuracy is unknown. Based on estimates from other projects with similar TVL amounts, the user count does not exceed 500,000.

Binance has 235 million users, and KYC verification is required.

Let's talk about the token economic model

Currently, I have not found the destruction mechanism for Hyperliquid

Binance will use 20% of its quarterly profits to buy back BNB and destroy it.

Finally, let's talk about circulation

The current circulation of Hype is 33%

BNB is fully circulated

Due to limited energy, I only compared a few important data points, but that is enough to illustrate the problem. So why can Hype support such a high market value? Is it based on those few hollow statements from KOLs that say Web3 needs DEX and decentralization? There are not just your DEX on the market; is there also a chain of your own besides being a DEX? The leading DEX from the last bull market, UNI, is also about to launch its own chain, and its diluted market value is 16 billion.