Hyperliquid Token Surges 300% in Two Months, Reaches All-Time High

Hyperliquid, a decentralized exchange (DEX) token, has seen a remarkable surge of over 300% in just two months, reaching an all-time high on June 17 before experiencing a slight decline. This meteoric rise has been driven by the growing usage of the Hyperliquid exchange and increasing investor interest. The platform has become a significant player in the decentralized perpetuals market, processing over 70% of the DEX perpetual volume. This dominance is further supported by the fact that 97% of the protocol fee revenue is reinvested into HYPE buybacks, aligning token incentives with platform growth.

Hyperliquid's success is evident in its rankings and market position. It currently ranks 8th among all blockchains by total value locked (TVL), with $1.75 billion locked. Its flagship product, a high-performance DEX, clears over $420 million in daily volume, placing it 6th among all decentralized exchanges. Additionally, the Nasdaq-listed Lion Group recently announced it will hold $600 million in reserves with HYPE as its primary treasury asset, further solidifying Hyperliquid's position in the market.

Hyperliquid was launched in 2023 by Harvard classmates Jeff Yan and Iliensinc, making it one of the few major crypto projects to launch without external funding. The platform aims to offer the self-custody and transparency of a decentralized exchange while replicating the speed and convenience typically found on centralized platforms. Features such as one-click trading, direct deposits from over 30 chains, and access to spot, margin, and perpetual markets contribute to a smooth user experience. However, the platform's design favors efficiency over composability and cross-chain interoperability, relying heavily on the accuracy of price oracles and funding rate mechanisms.

The Hyperliquid blockchain, a custom layer-1 using a variant of Byzantine fault tolerance (BFT) consensus called HyperBFT, supports up to 200,000 transactions per second. However, this high throughput comes at the cost of decentralization, as the network currently operates with just 21 delegated validators. The platform reached a critical inflection point in November 2024, when daily trading volume jumped tenfold, from $2 billion to over $20 billion, and now boasts more than 500,000 users.

The HYPE token, which serves as both the gas token and governance asset of the Hyperliquid chain, was launched via airdrop in November 2024, distributing 31% of the total supply of 1 billion tokens to users. The airdrop's value reached $11 billion just a month after its launch. Currently, 334 million HYPE tokens have a market cap of $12.4 billion, implying a fully diluted valuation of around $38 billion. The token can be staked on-platform, either directly or through validation, and the supply is carefully managed to ensure long-term value for holders.

Despite the impressive performance and market position, some analysts have raised concerns about the token's valuation. Moonrock Capital CEO Simon Dedic questioned the risk/reward ratio of the token's fully diluted valuation, which is nearly $50 billion. However, supporters argue that the valuation concerns overlook Hyperliquid's performance and the sector's potential. For instance, Hyperliquid currently commands 70% of all decentralized perpetuals trading but only 10% of Binance global volumes, indicating significant upside potential, especially if the regulatory climate in the US improves.

Hyperliquid's Assistance Fund has amassed $910 million in HYPE buybacks over the past 6 months, reinvesting roughly 97% of platform fee revenue into HYPE. Currently, only 34% of the total supply is circulating, with most of the team's tokens vested until 2027-2028. Additionally, almost 39% of the total supply is earmarked for "community rewards" to be distributed gradually. The project has never raised from VCs, eliminating external pressure to offload tokens. In this light, the $38 to $45 billion fully diluted valuation may be high but not necessarily irrational, particularly for long-term holders who believe in the protocol's trajectory.

While Hyperliquid appears well-positioned to attract capital, the platform's centralization risk is a potential concern. Investors and users have often favored centralized platforms for their convenience, only to be reminded later that decentralization is more than an ideological preference—it’s a design choice for resilience. Centralization risk rarely matters—until it suddenly does. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.