Written by: Alvis, Mars Finance
Undoubtedly, Hyperliquid is the hot topic in the recent cryptocurrency market, creating significant attention not only through a shocking airdrop but also propelling its native token $HYPE to astonishing valuations. However, what risks are hidden behind this celebration? Can Hyperliquid stand out from the hype and move towards true value creation? Let's analyze from the beginning.
Hyperliquid's airdrop: Value creation or short-term speculation?
The Hyperliquid team initially designated 310 million HYPE for the airdrop, with over 94,000 addresses qualifying for the claim. As of now, according to ASXN data, 87% (270.94 million) of the tokens have been successfully claimed, with a total book value of up to $7.6 billion. This data officially breaks the record set by Uniswap's $UNI airdrop launched in September 2020.
Price performance: Short-term surge
Since the airdrop, $HYPE has risen from an initial $3.81 to its current $25, an increase of over 5 times. This has brought $HYPE's circulating market cap to $8.4 billion, with a fully diluted market cap (FDV) of up to $25.2 billion, only 11% lower than the peak market cap of the $UNI airdrop.
Comparison with Uniswap airdrop
Comparative book value: At the market peak in May 2021, Uniswap's airdrop book value reached $6.4 billion, while the current value of Hyperliquid's $HYPE airdrop has exceeded $1 billion.
Differences in participation scope and distribution:
$UNI airdrop covered over 250,000 addresses, with nearly 94% of addresses receiving only 400 UNI, which was worth about $6,500 at the time.
The $HYPE airdrop is more concentrated, with about 12% of recipients receiving 5,000 to 10,000 tokens, with book values ranging from $140,000 to $280,000; 4.3% of recipients received more than 10,000 tokens, while 57% received only up to 100 tokens (about $2,800).
Whale-level distribution and market impact
$UNI airdrop once awarded over 250 addresses up to 250,000 UNI (valued at $4 million at the time). A similar distribution pattern also appeared in the $HYPE airdrop but showcased a greater market impact in a shorter time frame. Less than three weeks after the airdrop ended, the price of $HYPE rose from $3.81 to $28, achieving a nearly 6-fold increase, pushing its circulating market cap to exceed $90 billion at its peak, with a fully diluted market cap (FDV) nearing $30 billion.
Market behavior and sell-off pressure after the airdrop
Although the early performance of $HYPE is eye-catching, market data indicates that some airdrop recipients have already chosen to take profits, leading to potential sell-off pressure in the short term:
According to ASXN data, among the top 500 addresses receiving the airdrop, 182 addresses have completely liquidated their holdings, with some addresses netting profits of $1.95 million to $2.8 million.
58 addresses (11%) have increased their holdings since the airdrop, showing some investors' confidence in the long-term potential of $HYPE, but the overall trend leans towards short-term arbitrage.
Additionally, Hyperliquid's total locked value (TVL) has grown to $1.9 billion, ranking just after Arbitrum and before Sui. However, whether this growth can be sustained remains to be observed, depending on the market's further recognition of $HYPE and the Hyperliquid ecosystem.
Compared to the data after the Uniswap airdrop, $HYPE may repeat a similar fate: within two years after the $UNI airdrop, 93% of recipients sold all their tokens, and only 1% increased their holdings. This short-term arbitrage behavior may become an important driver of price volatility after the Hyperliquid airdrop.
Hyperliquid's latest collaborations and ecosystem expansions
After attracting heat from the airdrop, Hyperliquid is taking concrete actions to establish its ecosystem, with the most notable being its collaboration with Solv Protocol.
Joining Solv Protocol
Solv Protocol is a mature DeFi project with a locked value (TVL) exceeding $3 billion and 500,000 users. Solv chose to debut on the Hyperliquid platform, a decision that not only shows Solv's recognition of Hyperliquid's ecosystem potential but also brings more diversification to Hyperliquid's asset portfolio.
The important significance of collaboration:
Enhancing ecosystem attractiveness: By introducing projects like Solv with technical backgrounds, Hyperliquid is moving away from relying solely on $HYPE and memecoins, and is starting to attract more assets with real value, forming a more robust ecosystem.
User expansion: Solv's debut attracted significant attention, bringing more high-quality user traffic and community support to Hyperliquid.
A feasible alternative to decentralized exchanges: Hyperliquid, through collaboration with mature projects, demonstrates that DEX platforms are not just places for speculative tokens but can also become stable trading environments similar to CEXs.
Hyperliquid aims to become a fully on-chain exchange, positioning itself similarly to "Binance on-chain." However, achieving this goal requires attracting more high-quality projects and stable liquidity support. The addition of Solv undoubtedly lays a solid foundation for Hyperliquid.
Valuation analysis: The warning of overvaluation
Despite showing tremendous potential in technological innovation and ecosystem layout, the current price of its token $HYPE may be overvalued, posing a risk of short-term correction.
Comparison with CEXs
Binance: As the largest cryptocurrency exchange globally, Binance has a market cap of about $100 billion, having accumulated a wide user base, product line, and market influence over 7 years of development. In contrast, Hyperliquid, as a newly launched DEX, has a valuation only about 3 times lower than Binance, yet its user scale and ecosystem depth cannot be compared to Binance.
Medium-sized CEXs like Bybit: Medium exchanges similar to Bybit have valuations comparable to Hyperliquid, reflecting the market sentiment speculation component present in $HYPE's valuation.
Why would I consider reducing my holdings of $HYPE?
1. Sustainability of trading volume growth is questionable
Although Hyperliquid's recent trading volume reached $13 billion, with estimated annual revenue of $710 million from transaction fees, this growth may be driven more by short-term speculation, lacking the support of a long-term user base. High trading volume may not be sustainable, especially in the context of increased competition in the DEX market.
2. Revenue growth expectations are overly optimistic
Listing fee risk: A listing fee of 500,000 USDC may cause project parties to turn to other lower-cost competitive platforms, affecting revenue growth expectations.
Dependence on transaction fees: A decline in trading volume or user migration will directly threaten the sustainability of transaction fee income, and the current valuation relies on this single source of income, which poses high risks.
3. Misleading nature of the P/E ratio indicator
Although the price-to-earnings ratio based on this month's revenue is less than 10 times, it ignores the market bull-bear cycles, revenue fluctuations, and the fact that the platform has not yet experienced a complete cycle. Compared to mature platforms like Binance, Hyperliquid’s revenue and profits lack long-term validation.
4. Sell-off pressure
As more airdrop recipients choose to take profits and exit, the price of $HYPE may face significant pullback pressure.
5. Potential pullback risk under high valuation
$HYPE currently has a circulating market cap of $8.4 billion, with an FDV of up to $25.2 billion, nearing Uniswap's historical high point. Compared to the mature market of Binance, its valuation appears disproportionate, indicating overvaluation and significant correction pressure.
Conclusion and recommendations
The $HYPE airdrop from Hyperliquid has indeed created a new record in crypto history and demonstrated the potential for ecosystem building through collaborations with projects like Solv Protocol. However, the current market enthusiasm may mask the true risks of valuation. In terms of circulating market cap and fully diluted valuation, the price of $HYPE is already approaching or even exceeding that of some established exchanges and DEXs, while the platform has not yet accumulated a sufficient user base and trading data to support this high valuation.
For potential investors, the risks and returns of $HYPE in the short term are asymmetrical, and the market may experience a round of pullback. If you are optimistic about Hyperliquid's long-term development, it may be wise to patiently wait for the market to cool down and for price adjustments before seizing opportunities. Investment should return to rationality, avoiding blind chasing of highs during market enthusiasm.
(The above content is excerpted and reprinted with the authorization of partner MarsBit, original link)
Statement: The article only represents the author's personal opinions and does not represent the views and positions of Block客. All content and opinions are for reference only and do not constitute investment advice. Investors should make their own decisions and trades; the author and Block客 will not bear any responsibility for direct or indirect losses caused by investor trading.
"Hyperliquid: From the most valuable airdrop in history to high valuation warning" was first published on (Block客).
