Author: Bondin, Unlocks Insights; Translator: Golden Finance Xiaozou

Note: Recently, Hyperliquid's TGE and the airdrop to the community saw its token HYPE rise from $2 to a peak of $9.8, with a FDV near $10 billion. Currently, HYPE is fluctuating around $8.3. This article reviews the Hyperliquid TGE event and the current landscape of decentralized perpetual contract DEXs.

The cryptocurrency market has begun to show signs of bullish trends, with memes and artificial intelligence capturing most of the current attention. However, Hyperliquid's recent token generation event (TGE) has shifted focus back to decentralized finance (DeFi). The project directly airdropped over one-third of its total token supply to the community, without allocating tokens to exchanges or private investors, and the token has maintained a steady price increase since its launch.

This success has increased the likelihood of renewed market attention on DeFi, particularly concerning decentralized perpetual protocols like Hyperliquid. Recent data from DefiLlama supports this potential trend, showing a significant increase in the total locked value (TVL) of derivative protocols. This growth highlights the increasing relevance of these platforms within the DeFi ecosystem.

In this article, we explore:

  • Hyperliquid: Key Features, Token Economics, and Growth Potential.

  • Perpetual Protocols: A close examination of notable protocols in the perpetual space, including dYdX (high market cap), GMX (medium market cap), and HMX (low market cap), with selection criteria based on their key metrics within their respective categories.

1. Introduction to Hyperliquid

Hyperliquid is a high-performance Layer 1 blockchain designed for a fully on-chain open financial system. Its infrastructure combines the speed of centralized exchanges with the transparency and trustlessness of DeFi, providing fast, transparent, and scalable trading with block delays of under one second and throughput of up to 100,000 orders per second.

(1) Token Economics

Hyperliquid's token economics emphasize community-driven growth. Its recent token generation event (TGE) introduced the native token HYPE, with over one-third of the total supply directly airdropped to the community. Notably, there were no token allocations for private investors or exchanges, ensuring the project's value is rooted in community participation.

The main highlights of its token economics are as follows:

  • Total Supply: 1,000,000,000 HYPE tokens.

  • Allocation Details:

  • Future Emissions and Community Rewards: 38.888%

  • Genesis Allocation: 31.0%

  • Core Contributors: 23.8%

  • Hyper Foundation Budget: 6.0%

  • Community Grants: 0.3%

  • HIP-2 Allocation: 0.012%

  • Standard allocation details for token economics:

  • Community: 76.2%

  • Founders/Team: 23.8%

(2) Supply Plan

Hyperliquid's supply plan supports high initial circulating supply for immediate liquidity, while ensuring controlled token emissions over time:

  • Community Allocation: Over 30% of the total supply will enter circulation through airdrops at the time of token release. The remaining tokens will be gradually emitted over time. Some tokens are allocated for foundation budgets and community grants to support ecosystem development at launch.

  • Team Allocation: Locked for one year, then gradually unlocked monthly over two years, with full release completed between 2027 and 2028. The unlocking period on the release schedule lasts for two years.

High initial circulating supply has facilitated liquidity and active market participation from day one, distinguishing it from the general trend of low circulating/high FDV tokens. The year following the genesis, when team tokens begin to unlock, will be a key event to observe its potential market impact.

(3) Bullish Catalysts

  • High Initial Circulating Supply: At the time of token issuance, over 30% of the total supply enters circulation—without allocations to venture capital or private investors—differentiating Hyperliquid from the trend of low-circulation venture-backed tokens. With no private entities holding pre-allocated tokens, anyone interested in acquiring HYPE outside of the airdrop must purchase directly on the market. This initiative has received strong support from the community, generating bullish sentiment and further boosting market confidence.

  • Market Dominance: Hyperliquid has shown remarkable growth in user stickiness and trading volume. Total users exceed 190,000, with total trading volume surpassing $300 billion. Data from Dune Analytics indicates that Hyperliquid currently dominates the perpetual protocol market, leading with over 35% of trading volume among all perpetual protocols.

  • Ecosystem Development: HyperEVM introduces Ethereum compatibility, attracting over 30 projects, including dApps and GambleFi applications. Collaboration with Ethena and integration with stablecoins like USDe further enhance utility, liquidity, and developer engagement.

These catalysts highlight Hyperliquid's growth potential and its leading position in decentralized perpetual trading.

2. Exploring the Current State of Perpetual Protocols

In addition to Hyperliquid, several other protocols are actively shaping the perpetual protocol space, driving their development through adoption and innovation. In this section, we will examine key players across different market capitalizations:

  • dYdX (high market cap): An OG leader with a strong user base, focusing on application chains.

  • GMX (mid market cap): A leader on Arbitrum, known for its unique liquidity model and stable growth.

  • HMX (low market cap): A protocol offering high-leverage trading with impressive performance valuation metrics.

By analyzing their token economics and catalysts, we have formed a comprehensive perspective on the decentralized perpetual protocol space.

(1) dYdX: The OG market leader with an application chain vision

Introduction to dYdX:

dYdX has become a leading decentralized perpetual exchange with advanced features and a professional trading experience. The protocol was originally launched on Ethereum and evolved to StarkWare (v3) in 2021 to overcome scalability issues caused by high gas fees. To fully realize decentralization, dYdX launched the v4 iteration on an independent dYdX chain built using the Cosmos SDK, ensuring that all components of the protocol are fully decentralized.

Token Economics:

The DYDX token was launched on August 3, 2021, and its tokenomics continue to evolve through team decisions and community governance. Notably, the one-year re-locking mechanism for investor and team tokens has greatly boosted market confidence and driven up token prices.

  • Standard Allocation:

  • Reserve: 31.3%

  • Private Investors: 27.7%

  • Founders/Team: 22.3%

  • Community: 18.7%

  • Supply Plan:

  • Team and investor tokens will start unlocking this year, with a significant cliff followed by monthly unlocks until completion in June 2026.

  • Approximately 20% of the total supply is still unallocated, leaving room for future ecosystem incentives.

  • Current token emissions are stagnant at about 80 million DYDX per month (less than 1% of total supply), ensuring controllability of supply growth.

Bullish Catalysts:

  • Controllable Emissions: A stable monthly emission rate of about 1.4% of the circulating supply ensures limited dilution and provides confidence to long-term holders.

  • Flexible Allocation: Over 20% of the unallocated tokens provide opportunities for future ecosystem incentives, supporting potential growth and adoption.

  • dYdX Unlimited: The launch of dYdX Unlimited allows users to trade on any market, expanding its appeal and creating more trading opportunities within the ecosystem.

(2) GMX: A Mid-Cap Leader on Arbitrum

Introduction to GMX:

GMX is a decentralized exchange (DEX) operating on Arbitrum and Avalanche, offering spot and perpetual futures trading with up to 100x leverage. Its standout feature is the GLP multi-asset liquidity pool, which supports fees for market making, swap trading, and leveraged trading, providing a sustainable and scalable liquidity model.

Token Economics:

  • Standard Allocation:

  • Founders/Team: 1.9%

  • Reserve: 37.7%

  • Community: 60.4%

  • Supply Plan:

  • GMX was launched in July 2021, developed from XVIX and Gambit tokens. Most of its token supply has already been unlocked, with the remaining emissions mainly used for esGMX rewards under the community pool to incentivize the protocol's usage.

Bullish Catalysts:

  • Low Supply Emissions: GMX's annual emission rate is only 1.5%, making it one of the most conservative supply plans in the perpetual protocol space, minimizing inflation and preserving token value.

  • Growth in Key Metrics: GMX has recently shown strong growth trends, including a recovery in TVL, a significant increase in open interest over the past three months, and a 130% increase in 30-day earnings driven by increased trading activity and robust fee revenue.

(3) HMX: A Strong Indicator of a Low Market Cap Project

Introduction to HMX:

HMX is a decentralized perpetual contract trading platform operating on Arbitrum, enabling users to trade cryptocurrencies and commodities with high leverage. It supports multi-asset collateral and full-margin trading, enhancing capital efficiency and user flexibility.

Token Economics:

  • Standard Allocation:

  • Community: 40%

  • Reserve: 30.6%

  • Founders/Team: 15%

  • Public Investors: 8%

  • Private Investors: 6.4%

  • Supply Plan:

HMX launched its token generation event (TGE) through public sales in August 2023.

  • Team and private investor tokens begin unlocking this year, with a significant cliff followed by monthly unlocks until completion in June 2026.

  • Community Allocation: Allocated to platform rewards according to a detailed schedule.

  • Reserved Allocation: For ecosystem growth plans, such as marketing, partnerships, and exchange listings. These tokens will not directly enter circulation upon unlocking and will only be used as needed.

Bullish Catalysts:

  • Strong Indicators in the Arbitrum Ecosystem:

  • Growth Potential: HMX's market cap/TVL ratio is half that of GMX, with a P/E ratio of 0.39 (annual fees: $14 million), and a market cap of around $5.5 million, whereas GMX has a P/E ratio of 3.4 (annual fees: $90 million) and a market cap exceeding $300 million. Its fundamentals are strong, and its valuation is significantly lower than GMX and dYdX ($1.2 billion), indicating substantial room for growth.

  • High Fees and Revenue: HMX ranks second in fees and revenue dimensions, demonstrating strong user stickiness and platform efficiency despite a lower TVL.

  • New Roadmap:

HMX's recently announced roadmap introduces significant updates to enhance its ecosystem and competitiveness:

  • CLOB Model: Set to launch in Q1 2025, this model will bring deeper liquidity, better price discovery, and advanced trading features.

  • Improved Token Economics: Including token burning, governance-driven inflation, and airdrop activities to enhance demand and user participation.

  • Brand Revamp: The new branding will reflect HMX's position as an innovator in the perpetual DEX space and its transformative power.

3. Conclusion

With innovative platforms like Hyperliquid, dYdX, GMX, and HMX leading the way, the perpetual protocol space is gaining momentum in the DeFi sector, with all platforms driving growth through their respective unique features and strategies. As the space continues to evolve, it will play a key role in decentralized trading.