A new altcoin, Hyperliquid (HYPE), is rapidly making waves in the cryptocurrency market, currently ranked as the 28th largest cryptocurrency by market cap. This rise has propelled HYPE past established currencies like Near Protocol (NEAR), surging 204% in just two weeks, with a market cap of approximately $8.93 billion.
Explore the Hyperliquid Protocol
Studying the products of altcoins is crucial for a better understanding of the increasing attention it has received over the past week.
HYPE is the native token of Hyperliquid, a Layer 1 (L1) blockchain that utilizes HyperBFT technology. Reportedly, this tool allows Hyperliquid to facilitate 'fast, secure, and transparent transactions,' bridging the gap between centralized exchanges (CEX) and decentralized exchanges (DEX).
Specifically, Hyperliquid addresses performance limitations typically associated with other blockchains (such as Solana (SOL) and Ethereum (ETH)) by being able to process over 100,000 transactions per second with a latency of less than one second.
The tokenomics of HYPE includes a burn mechanism to control supply and support price stability, which is a common practice among tokens like Shiba Inu (SHIB). A strict vesting schedule has also been established to balance liquidity and mitigate selling pressure.
The token offers investors a variety of utility options, including trading fee discounts, staking opportunities, and governance participation. HYPE holders can enjoy reduced trading fees, significantly enhancing profitability, while staking tokens can earn them rewards or provide liquidity in trading pools.
Will the launch of new products and HyperEVM boost the hype?
The latest insights from cryptocurrency analyst Ericonomic also highlight several compelling reasons to remain optimistic about HYPE, despite short-term adjustments seen in Layer 1 altcoins.
Analysts noted that deposits of Hyperliquid's Circle stablecoin USDC reached an all-time high, indicating strong demand, while auction prices have also reached unprecedented levels, with well-known entities like MON Protocol making substantial purchases.
The total amount of USDC held on Hyperliquid has surged, indicating strong liquidity. Additionally, many savvy traders have invested millions in HYPE and publicly support the token, showing confidence in its future potential.
Retail investors have not yet entered the market en masse, as HYPE has not yet been listed on major centralized exchanges. If these traders show sufficient interest in HYPE's price, it could become a significant catalyst for its price.
Ericonomic further compared HYPE with Binance Coin (BNB) and noted that HYPE holders enjoy a fairer fee distribution, as all generated fees are directly returned to the Hyperliquid protocol.
At the time of writing, HYPE has retraced from its historical high of $42 set on December 12, and has stabilized at a level of $26.91.
Despite this adjustment, the token's weekly increase still exceeds 105%, with trading volume reaching $342 million. Looking ahead, it remains to be seen whether there are enough catalysts to support the token following the recent adjustments.
