Author: Bondin, Unlocks Insights; Translator: Jinse Finance Xiaozou
Note: Recently, Hyperliquid conducted its TGE and distributed airdrops to the community, with its token HYPE rising from $2 to a peak of $9.8, reaching an FDV of nearly $10 billion. Currently, HYPE is fluctuating around $8.3. This article reviews the TGE event of Hyperliquid and the current state of the decentralized perpetual contract DEX landscape.
The cryptocurrency market is beginning to show signs of bullish trends, with Meme and AI drawing most attention currently. However, Hyperliquid's recent token generation event (TGE) has shifted focus back to decentralized finance (DeFi). The project directly airdropped over a 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 release.
This success raises the likelihood of the market refocusing on DeFi, especially with decentralized perpetual protocols like Hyperliquid. Recent data from DefiLlama supports this potential trend, showing a significant increase in total locked value (TVL) of derivative protocols. This growth underscores the increasing relevance of these platforms within the DeFi ecosystem.
In this article, we will explore together:
Hyperliquid: Key features, tokenomics, and growth potential.
Perpetual protocols: A close examination of notable protocols in the perpetual space, including dYdX (high market cap), GMX (mid market cap), and HMX (low market cap), selected based on their significant 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 less than one second and throughput of up to 100,000 orders per second.
(1) Tokenomics
Hyperliquid's tokenomics emphasizes community-driven growth. Its recent token generation event (TGE) introduced the native token HYPE, with over a third of the total supply directly airdropped to the community. Notably, there were no token allocations directed towards private investors or exchanges, ensuring the project's value is rooted in community participation.
The main highlights of its tokenomics 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 of the tokenomics:
Community: 76.2%
Founders/Team: 23.8%
(2) Supply plan
Hyperliquid's supply plan supports high initial circulating supply for instant liquidity while ensuring controlled token emissions over time:
Community allocation: More than 30% of the total supply will enter circulation through airdrops at the time of token launch. The remaining tokens will be gradually released over time. Some tokens are allocated to foundation budgets and community grants to support ecosystem development at launch.
Team allocation: Locked for one year, followed by monthly gradual unlock over two years, with full distribution completed in 2027-2028. The unlock timeline on the distribution schedule spans 2 years.
High initial circulating supply promoted 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 impact on the market.
(3) Bullish catalysts
High initial circulating supply: At the time of token issuance, over 30% of the total supply enters circulation—without allocation to venture capital or private investors—distinguishing Hyperliquid from the trend of low circulating, venture-backed tokens. With no private entities holding pre-allocated tokens, anyone interested in acquiring HYPE beyond the airdrop must buy directly on the market. This initiative has received strong community support, igniting 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 across all perpetual protocols.
Ecosystem development: HyperEVM introduces Ethereum compatibility, attracting over 30 projects, including dApps and GambleFi applications. Collaborations with Ethena and integrations 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 the perpetual protocol space
In addition to Hyperliquid, several protocols are actively shaping the perpetual protocol space, driving its development through adoption and innovation. In this section, we will examine the key players across different market caps:
dYdX (high market cap): An OG leader with a strong user base focused 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 tokenomics and catalysts, we have formed a comprehensive view of the decentralized perpetual protocol space.
(1) dYdX: An OG market leader with a vision for application chains.
Introduction to dYdX:
dYdX has become a leading decentralized perpetual exchange with advanced features and a professional trading experience. The protocol was initially launched on Ethereum and evolved to StarkWare (v3) in 2021 to overcome the scalability issues caused by high gas fees. To fully realize decentralization, dYdX launched its v4 iteration on an independent dYdX chain built using the Cosmos SDK, ensuring that all components of the protocol are fully decentralized.
Tokenomics:
The DYDX token was launched on August 3, 2021, and its tokenomics has evolved 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 began unlocking this year, leading to a significant cliff, followed by monthly unlocks until completion in June 2026.
Approximately 20% of the total supply remains 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 for long-term holders.
Flexible allocation: Over 20% of unallocated tokens provide opportunities for future ecosystem incentives, supporting potential growth and adoption.
dYdX Unlimited: The launch of dYdX Unlimited allows users to trade any market on the platform, expanding its appeal and creating more trading opportunities within the ecosystem.
(2) GMX: A mid-market 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 leverage up to 100x. Its standout feature is the GLP multi-asset liquidity pool, which supports fees for market-making, swap trades, and leveraged trading, providing a sustainable and scalable liquidity model.
Tokenomics:
Standard allocation:
Founders/Team: 1.9%
Reserve: 37.7%
Community: 60.4%
Supply plan:
GMX was launched in July 2021, evolving from the XVIX and Gambit tokens. Most of its token supply has been unlocked, with remaining emissions primarily used for esGMX rewards under the community pool to incentivize protocol usage.
Bullish catalysts:
Low supply emissions: GMX's annual emission rate is only 1.5%, one of the most conservative supply plans in the perpetual protocol space, minimizing inflationary pressures and retaining token value.
Growth in key metrics: GMX has recently shown strong growth trends, including a recovery in TVL, significant increases in open interest over the past three months, and a 130% growth in 30-day earnings fueled by increased trading activity and strong fee generation.
(3) HMX: A low market cap project with strong metrics.
Introduction to HMX:
HMX is a decentralized perpetual contract trading platform operating on Arbitrum, providing users with the ability to trade cryptocurrencies and commodities with high leverage. It supports multi-asset collateral and full-margin trading, enhancing capital efficiency and user flexibility.
Tokenomics:
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 investors: Following a 6-month cliff, there is a 42-month team unlocking period and a 12-month investor unlocking period.
Community allocation: Distributed according to a detailed schedule for platform rewards.
Reserved allocation: For ecosystem growth programs, such as marketing, partnerships, and exchange listings. These tokens will not enter circulation directly upon unlocking, only to be used as needed.
Bullish catalysts:
Strong metrics 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, while GMX's P/E ratio is 3.4 (annual fees: $90 million), with a market cap exceeding $300 million. Its fundamentals are strong, and the valuation is far below that of GMX and dYdX (which has a market cap of $1.2 billion), indicating substantial growth potential.
High fees and earnings: HMX ranks second in terms of fees and earnings, demonstrating strong user stickiness and platform efficiency despite 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 tokenomics: Including token burning, governance-driven inflation, and airdrop activities to boost demand and user engagement.
Brand revamp: The new brand will reflect HMX's status 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 realm, with all platforms driving growth through their unique features and strategies. As the space continues to evolve, it will play a key role in decentralized trading.
