XPL's Pre-Launch Frenzy Sparks $4.5B Valuation Gamble

Hyperliquid’s XPL contract has witnessed significant trading activity in the past 24 hours, with total volume surpassing $158 million and a notable increase in the funding rate to 0.15%. This spike in volume and the rising funding rate underscore the intense speculative interest in the token ahead of its broader market debut.

The XPL token, associated with the Plasma project, is currently trading at $0.45 on Hyperliquid, which implies a fully diluted valuation of approximately $4.5 billion, a substantial increase from its initial public-sale valuation. Plasma, a stablecoin-focused Layer 1 blockchain, secured $373 million in commitments during its token sale, offering 10% of the total 1 billion XPL supply at $0.05 per token. The current trading activity represents a 10x valuation from the public-sale price, highlighting the speculative fervor in pre-listing markets.

On Hyperliquid, the XPL-USD contract allows traders to take leveraged long or short positions. The platform uses a unique funding mechanism, where funding is set against a moving average of the contract’s own mark price, rather than relying on external index oracles. This approach is designed to mitigate the risk of market manipulation, a common concern in pre-launch futures.

Trading volume for the XPL contract surged rapidly after its listing, with $49 million in volume and $33 million in open interest recorded in the initial period. Analysts have noted that the high funding rate and the sharp increase in open interest suggest strong market sentiment and significant short-term volatility.

Further evidence of the intense trading activity is seen in the actions of several key wallet addresses. One prominent address executed a large long position, sweeping the order book and generating $16 million in profit within a minute. Subsequently, the price of XPL surged over 200% within a two-minute period, reaching $1.80. Other addresses, believed to be operating in coordination, began closing positions for profit after the price reached a short-term high. These actions have drawn attention from the market for their scale and speed, with some observers characterizing it as one of the most dramatic liquidation events on the platform.

The surge in XPL trading activity is also supported by promotional efforts from Binance, the world’s largest centralized crypto exchange. Binance has launched a Plasma USDT Locked Product, offering daily USDT yield and future XPL rewards, which quickly filled its initial 250 million USDT subscription quota. In response to the overwhelming demand, Binance increased the total threshold to 1 billion USDT and opened additional subscription tranches.

Plasma itself, as a Layer 1 blockchain, is designed to provide fee-free USDT transfers and has a trust-minimized Bitcoin bridge. While it was initially planned to integrate Bitcoin’s UTXO model with the Ethereum Virtual Machine, the project has shifted to operate as an independent Layer 1 chain. Plasma is backed by Bitfinex and has attracted significant institutional interest, given its potential to offer scalable and cost-effective stablecoin solutions.

The rapid rise in XPL’s value and the high trading activity on Hyperliquid reflect the broader trend of speculative trading in pre-listing markets, where leverage and high volatility can lead to substantial short-term gains or losses. As the token prepares for its centralized-exchange debut, market participants are closely watching for signs of continued momentum or potential correction.

Source: [1] XPL surged 200% on Hyperliquid in a short time, a certain ... (https://www.chaincatcher.com/en/article/2200940) [2] Plasma's XPL token trades above $4.5 billion fully diluted ... (https://www.theblock.co/post/367929/plasmas-xpl-token-trades-above-4-5-billion-fully-diluted-valuation-in-pre-markets) [3] Suspected four main addresses jointly targeted XPL ... (https://www.chaincatcher.com/en/article/2200999) [4] Hyperliquid platform XPL suddenly saw a spike in prices ... (https://www.panewslab.com/en/articles/72f77d18-a4ba-4d63-9da0-b1d22f65aa57)