HYPE’s Buybacks and Bull Run Fuel DeFi’s New King

Hyperliquid’s native token, HYPE, reached an all-time high of $51 on August 27, driven by record-breaking trading volumes and a robust buyback mechanism. The decentralized exchange has become a dominant force in decentralized finance (DeFi), with derivatives trading volume surging to $357 billion in August, up from $319 billion in July. This represents a nearly tenfold increase compared to the same period in 2024, according to DefiLlama data. The exchange’s spot trading volume also hit a weekly record, surpassing $3 billion in the week ending August 24, as reported by Blockworks.

The surge in activity has translated into substantial revenue for Hyperliquid, which generated $105 million in trading fees during August. A significant portion of these earnings is allocated to the protocol’s Assistance Fund, an automated on-chain mechanism designed to buy back HYPE tokens from the open market. Since its launch in January, the fund’s holdings have grown from 3 million tokens to 29.8 million, now valued at over $1.5 billion. This consistent reduction in circulating supply has contributed to sustained upward pressure on the token’s price.

HYPE’s rapid ascent has also been bolstered by institutional developments, including support from digital asset custodian BitGo for the HyperEVM network. This integration expands institutional access to Hyperliquid’s ecosystem, potentially increasing demand for the token. As of August 27, HYPE had gained 8% in the last 24 hours and was up 430% since its April low. It has surged over 15 times from its initial trading price of around $3 in late November 2024.

Analysts have acknowledged Hyperliquid’s strong fundamentals, including its dominant market share in decentralized perpetual futures and record-breaking fee generation. ByteTree analysts described the protocol as one of the most compelling in DeFi, citing its robust on-chain activity and growing institutional adoption. However, they also highlighted valuation concerns, noting that HYPE’s fully diluted valuation (FDV) exceeds $50 billion, with only a third of the supply currently in circulation. Scheduled token unlocks beginning in November could introduce selling pressure, testing the resilience of demand.

Hyperliquid’s Layer 1 blockchain, HyperEVM, has also demonstrated impressive growth, with total value locked (TVL) reaching new weekly highs. The TVL currently stands at $2.65 billion, placing HyperEVM as the sixth-largest Layer 1 chain by DeFi TVL. Galaxy Digital, a prominent player in the DeFi space, has further supported the ecosystem by becoming a validator on Hyperliquid, following an expansion of its validator set from 21 to 24.

Despite these developments, the token’s performance remains subject to market dynamics. Arthur Hayes, co-founder of BitMEX, has forecasted a 126x upside for HYPE over the next three years, based on his expectations for stablecoin expansion and increased decentralized exchange usage. He estimated that Hyperliquid’s annualized fees could rise to $258 billion, compared to its current annualized revenue of $1.2 billion. While such predictions are bullish, they are attributed to Hayes’ analysis and should not be interpreted as guarantees.

Source: [1] HYPE Hits ATH as Trading Surges (https://www.coindesk.com/markets/2025/08/27/hyperliquid-s-hype-hits-record-high-above-usd50-on-trading-boom-token-buybacks) [2] Hyperliquid spikes as Arthur Hayes predicts 126x upside in ... (https://cointelegraph.com/news/hyperliquid-hype-spikes-arthur-hayes-predicts-126x-upside) [3] HYPE Hits New All-Time High as Hyperliquid Dominates ... (https://thedefiant.io/news/defi/hype-hits-new-all-time-high-as-hyperliquid-dominates-defi-revenue)