Hyperliquid: The Future of Perpetual DEX in Market Trends

By: crypto insight|2025/11/21 04:30:09

Key Takeaways

Hyperliquid employs an aggressive token buyback model where 97% of its fees are used to repurchase its token, HYPE.
The platform has shown remarkable growth, with daily trading volumes reaching billions of dollars and significant annual revenue.
HyperEVM enhances the ecosystem by implementing gas fees paid in HYPE, introducing an additional deflationary mechanism.
Market scenarios suggest potential HYPE price ranges from $45–180, depending on the market conditions.

Introduction to Hyperliquid

As the decentralized exchange (DEX) landscape evolves, Hyperliquid has carved out a unique niche by focusing on perpetual contracts. This focus, combined with an aggressive buyback model, presents a compelling argument for its future growth potential. The crux of Hyperliquid’s strategy lies in its ability to leverage trading fees for token buybacks, offering investors both a deflationary mechanism and potential upside in market share.

An Overview of Hyperliquid’s Mechanics

Hyperliquid’s approach is straightforward yet revolutionary. The exchange channels 97% of its trading fees into repurchasing its token, HYPE, on the open market. This model creates a persistent demand for the token, aligning stakeholders’ interests with the platform’s growth. Additionally, on the HyperEVM—a layer integrated with Hyperliquid—gas fees are also paid in HYPE, leading to further supply reduction as these tokens are periodically burned.

Daily Operations and Revenue

The platform, as of late 2025, boasts a daily trading volume of approximately $80 billion, generating annual revenues between $12 to $13 billion. With these impressive metrics, Hyperliquid has established itself as a significant player in the DEX market. The platform’s market capitalization stands at roughly $100 billion, with a diluted valuation estimated at $380 billion.

Strategic Use of Fees: The Heart of Hyperliquid

At the core of Hyperliquid’s strategy is its fee utilization model. By directing 97% of its fees toward HYPE buybacks, the platform effectively creates continuous buying pressure. This aspect of its design is crucial, as it not only incentivizes existing investors but also attracts new participants looking for growth opportunities in the decentralized finance (DeFi) space.

The Role of HyperEVM

HyperEVM represents an expansion of Hyperliquid’s ecosystem. It demands gas fees in HYPE, further cementing the token’s use case within the platform. This EVM layer not only facilitates the execution of smart contracts but also ensures that a portion of the HYPE tokens used are destroyed, enhancing the deflationary nature of the tokenomics.

Market Scenarios and Projections

Hyperliquid’s future is closely tied to its market share and the overall growth of the perpetual DEX sector. Here are the potential scenarios:

Bear Market Scenario

In a conservative environment where market expansion is limited, Hyperliquid maintaining its current market share suggests a HYPE price between $45 to $50. This assumes the total DEX trading volume increases by 1.5 times the current size.

Baseline Scenario

Should the ecosystem’s trading volume double, with Hyperliquid’s market share improving to approximately 30%, the HYPE token is projected to reach a price point between $80 to $90.

Bull Market Scenario

In a bullish context, where trading volumes triple and Hyperliquid secures 40% of the market share, HYPE could appreciate significantly, ranging from $160 to $180. These estimates are contingent upon maintaining the current buyback model and market valuation metrics.

The Investment Proposition

What makes Hyperliquid particularly intriguing is its transparent and aggressive approach to token economics. The tangible, visible cash flow—where the platform annually channels over $13 billion into HYPE repurchasing—suggests a robust economic model. This framework not only supports price appreciation but also adds an element of predictability to long-term valuations.

The Appeal of Hyperliquid

Hyperliquid’s core appeal lies in two main areas: its perpetual DEX market dominance and the strategic value of HyperEVM. The latter brings increased utility to the token, potentially driving demand through new applications and initiatives. The combination of these factors makes Hyperliquid a noteworthy entity within the decentralized finance landscape.

Conclusion

Hyperliquid exemplifies a strategic blend of innovation and traditional market mechanics. Its focus on continual HYPE repurchase and deflationary models enhances its attractiveness as a growth investment. While the crypto markets are inherently volatile, Hyperliquid’s operational model and strategic initiatives provide a foundational stability that could yield significant long-term gains for investors.

FAQ Section

What is Hyperliquid’s primary business model?

Hyperliquid operates as a decentralized exchange specializing in perpetual contracts. It utilizes trading fees to repurchase its HYPE token, creating a deflationary effect.

How does HyperEVM contribute to the ecosystem?

HyperEVM serves as an execution layer that requires gas fees in HYPE, which are partially burned. This adds an additional deflationary pathway and utility for the HYPE token.

What are the potential price projections for HYPE?

Depending on market conditions, HYPE is projected to range from $45 to $180. Key factors include trading volume growth and market share.

Why is Hyperliquid’s buyback strategy significant?

The buyback strategy redirects 97% of trading fees towards token repurchase, ensuring constant demand for HYPE, potentially supporting price increases.

How does Hyperliquid stand out in the DEX market?

Hyperliquid differentiates itself through its aggressive fee utilization for buybacks and the integration of HyperEVM, which enhances token utility and ecosystem robustness.

Over the past 24 hours, the crypto market has shown strong momentum across multiple dimensions. The mainstream discussion has focused on Coinbase's official entry into the prediction market through the acquisition of The Clearing Company, as well as the intense controversy within the AAVE community regarding token incentives and governance rights.

In terms of ecosystem development, Solana has introduced the innovative Kora fee layer aimed at reducing user transaction costs; meanwhile, the Perp DEX competition has intensified, with the showdown between Hyperliquid and Lighter sparking widespread community discussion on the future of decentralized derivatives.

I. Mainstream Topics

1. Coinbase Acquires The Clearing Company, Officially Entering Prediction Market

This week, Coinbase announced the acquisition of The Clearing Company, marking another significant move to deepen its presence in this field after last week's announcement of launching a prediction market on its platform.

The Clearing Company's founder, Toni Gemayel, and the team will join Coinbase to jointly drive the development of the prediction market business.

Coinbase's Product Lead, Shan Aggarwal, stated that the growth of the prediction market is still in its early stages and predicts that 2026 will be the breakout year for this field.

The community has reacted positively to this, generally believing that Coinbase's entry will bring significant traffic and compliance advantages to the prediction market. However, this has also sparked discussions about the industry's competitive landscape.

Jai Bhavnani, Founder of Rivalry, commented that for startups, if their product model proves to be successful, industry giants like Coinbase have ample reason to replicate it.

This serves as a reminder to all entrepreneurs in the crypto space that they must build significant moats to withstand competition pressure from these giants.

2. Kalshi Launches Kalshi Research and Integrates BSC Network

Regulated prediction market platform Kalshi launched its research arm, Kalshi Research, this week, aimed at opening its internal data to the academic community and researchers to facilitate exploration of prediction market-related topics.

Its inaugural research report highlights Kalshi's outperformance in predicting inflation compared to Wall Street's traditional models. Kalshi co-founder Luana Lopes Lara commented that the power of prediction markets lies in the valuable data they generate, and it is now time to better utilize this data.

Meanwhile, Kalshi announced its support for the BNB Chain (BSC), allowing users to deposit and withdraw BNB and USDT via the BSC network.

This move is seen as a significant step for Kalshi to open its platform to a broader crypto user base, aiming to unlock access to the world's largest prediction market. Furthermore, Kalshi also revealed plans to host the first Prediction Market Summit in 2026 to further drive industry engagement and development.

3. AAVE Token Incentive Controversy Persists as Founders and Whales Increase Holdings Against the Market Trend

The AAVE community recently engaged in heated debates around an Aave Improvement Proposal (AIP) titled "AAVE Tokenomics Alignment Phase One - Ownership Governance," aiming to transfer ownership and control of the Aave brand from Aave Labs to Aave DAO.

Aave founder Stani Kulechov publicly stated his intention to vote against the proposal, believing it oversimplifies the complex legal and operational structure, potentially slowing down the development process of core products like Aave V4.

The community's reaction was polarized. Some criticized Stani for adopting a "double standard" in governance and questioned whether his team had siphoned off protocol revenue, while others supported his cautious stance, arguing that significant governance changes require more thorough discussion.

This controversy highlights the tension between the ideal of DAO governance in DeFi projects and the actual power held by core development teams.

Despite governance disputes putting pressure on the AAVE token price, on-chain data shows that Stani Kulechov himself has purchased millions of dollars' worth of AAVE in the past few hours.

Simultaneously, a whale address, 0xDDC4, which had been quiet for 6 months, once again spent 500 ETH (approximately $1.53 million) to purchase 9,629 AAVE tokens. Data indicates that this whale has accumulated nearly 40,000 AAVE over the past year but is currently in an unrealized loss position.

The founder and whale's increased holdings during market volatility were interpreted by some investors as a confidence signal in AAVE's long-term value.

4. Top Articles: DeFi Curators and Ethereum Annual Summary

In this week's top article, Morpho Labs' "Curator Explained" detailed the role of "curators" in DeFi.

The article likened curators to asset managers in traditional finance, who design, deploy, and manage on-chain vaults, providing users with a one-click diversified investment portfolio.

Unlike traditional fund managers, DeFi curators execute strategies automatically through non-custodial smart contracts, allowing users to maintain full control of their assets. The article offered a new perspective on the specialization and risk management in the DeFi space.

Another widely circulated article, "Ethereum 2025: From Experiment to Global Infrastructure," provided a comprehensive summary of Ethereum's development over the past year. The article noted that 2025 is a crucial year for Ethereum's transition from an experimental project to global financial infrastructure. Through the Pectra and Fusaka hard forks, Ethereum achieved significant reductions in account abstraction and transaction costs.

Furthermore, the SEC's clarification of Ethereum's "non-securities" nature and the launch of tokenized funds on the Ethereum mainnet by traditional financial giants like JPMorgan marked Ethereum's gaining recognition from mainstream institutions. The article suggested that whether it is the continued growth of DeFi, the thriving L2 ecosystem, or the integration with the AI field, Ethereum's vision as the "world computer" is gradually becoming a reality.

II. Mainstream Ecosystem Updates

1. Solana: Launches Kora Fee Layer and propAMM Data Research

The Solana Foundation engineering team released a fee layer solution called Kora this week.

Kora is a fee relayer and signatory node designed to provide the Solana ecosystem with a more flexible transaction fee payment method. Through Kora, users will be able to achieve gas-free transactions or choose to pay network fees using any stablecoin or SPL token. This innovation is seen as an important step in lowering the barrier of entry for new users and improving Solana network's availability.

Additionally, a deep research report on propAMM (proactive market maker) sparked community interest. The report's data analysis of propAMMs on Solana like HumidiFi indicated that Solana has achieved, or even surpassed, the level of transaction execution quality in traditional finance (TradFi) markets.

For example, on the SOL-USDC trading pair, HumidiFi is able to provide a highly competitive spread for large trades (0.4-1.6 bps), which is already better than the trading slippage of some mid-cap stocks in traditional markets.

Research suggests that propAMM is making the vision of the "Internet Capital Market" a reality, with Solana emerging as the prime venue for all of this to happen.

2. Perp DEX: Hyperliquid vs. Lighter Competition Intensifies

The competition in the perpetual contract DEX (Perp DEX) space is becoming increasingly heated.

In its latest official article, Hyperliquid has positioned its emerging competitor, Lighter, alongside centralized exchanges like Binance, referring to it as a platform utilizing a centralized sequencer. Hyperliquid emphasizes its transparency advantage of being "fully on-chain, operated by a validator network, and with no hidden state."

The community widely interprets this as Hyperliquid declaring "war" on Lighter. The technical differences between the two platforms have also become a focal point of discussion: Hyperliquid focuses on ultimate on-chain transparency, while Lighter emphasizes achieving "verifiable execution" through zero-knowledge proofs to provide users with a Central Limit Order Book (CLOB)-like trading experience.

This battle over the future direction of decentralized derivatives exchanges is expected to peak in 2026.

Meanwhile, discussions about Lighter's trading fees have surfaced. Some users have pointed out that Lighter charged as much as 81 basis points (0.81%) for a $2 million USD/JPY forex trade, far exceeding the near-zero spreads of traditional forex brokers.

Some argue that Lighter does not follow a B-book model that bets against market makers, instead anchoring its prices to the TradFi market, and the high fees may be related to the current liquidity or market maker balance incentives. Providing a more competitive spread for real-world assets (RWA) in the highly volatile crypto market is a key issue Lighter will need to address in the future.

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Upcoming Lighter TGE: What Is a Reasonable Valuation? As a finance and blockchain translation expert, you are familiar with the field's slang and terminology.

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Key Market Insights from December 19th, How Much Did You Miss Out?

1. On-chain Funds: $572.8M USD flowed into Arbitrum today; $459.1M USD flowed out of Hyperliquid 2. Largest Price Swings: $FTN, $DREAM 3. Top News: Base App fully opens with over 12,000 new users on the first day, setting a new daily record

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