Hyperliquid’s Buyback Flywheel Could Reshape Crypto Trading

Hyperliquid, a decentralized exchange specializing in perpetual futures, has emerged as a dominant player in the crypto derivatives market, capturing 70–80% of trading volume in this space. The platform, which operates on its own blockchain, has outpaced major rivals like Robinhood in recent months, generating $300 billion in July versus Robinhood’s $237.8 billion. Hyperliquid’s native token, HYPE, has seen substantial gains, with its market cap nearing $12 billion. The platform’s success is attributed to its efficient execution, low costs, and a generous token airdrop to early users, which has helped fuel a flywheel effect of trading activity and buybacks. Over $7.5 billion worth of HYPE tokens were distributed in an airdrop to 94,000 early users, a move that significantly boosted user engagement and liquidity. The tokenomics model further strengthens this dynamic, as 99% of Hyperliquid’s trading fees are reinvested into buybacks, creating downward pressure on supply while potentially increasing token value. Analysts from crypto data firm Artemis note that this approach is rare and particularly community-driven compared to other platforms.

The platform’s buyback program has already seen over 30 million HYPE tokens repurchased, with recent data indicating that Hyperliquid spent nearly 50,000 HYPE—worth over $2 million—on 3 September alone. This represents 99% of the exchange’s daily revenue, signaling a significant commitment to token appreciation. Market observers believe this aggressive buyback strategy could drive a breakout above the $50 price level, which HYPE has been consolidating around for over two months. The token surged 400% in the first half of 2025 before entering a consolidation phase, with key support levels identified at $41.8 and $49.6. On-chain data from platforms like Coinglass shows net outflows from exchanges during HYPE’s recent pullback, suggesting a "buy the dip" sentiment among investors who are accumulating the token during price corrections.

Hyperliquid’s expansion beyond perpetual futures into spot markets has also added to its momentum. In late August, the platform hit $3.4 billion in daily spot trading volume, with nearly half of that in Bitcoin alone, making it the second-largest venue for the asset. The platform is also developing a broader range of tradable assets, with upcoming upgrades potentially allowing users to trade perps on gold, the S&P 500, and even equities like Palantir. This “everything exchange” strategy, similar to Coinbase’s approach, could further diversify Hyperliquid’s revenue streams and attract a wider user base.

The growing competition in the perpetuals space, however, remains a challenge. Major players like Coinbase and Robinhood have entered the market with regulated offerings, providing U.S. and EU traders access to leveraged crypto bets. While these platforms offer less leverage than Hyperliquid, their large user bases and trusted brand identities pose a threat. Smaller exchanges are also following Hyperliquid’s playbook, but analysts suggest the market is cyclical, with new winners emerging as older platforms struggle to maintain token performance.

Despite the competitive landscape, Hyperliquid’s unique model—combining high leverage, generous token distribution, and aggressive buybacks—has positioned it as a key player in crypto trading. With a lean team of 11 and a revenue run rate of $1.4 billion, the platform has demonstrated a level of efficiency and innovation that sets it apart in a rapidly evolving market.

Source: [1] Why Hyperliquid Is Crypto's New Killer App (https://www.forbes.com/sites/digital-assets/2025/09/01/why-hyperliquid-is-cryptos-new-killer-app/) [2] Will daily buybacks trigger HYPE's breakout above $50? (https://ambcrypto.com/hyperliquid-will-daily-buybacks-trigger-hypes-breakout-above-50/)