Summary Hyperliquid is a fast-growing L1 blockchain and DEX, recently surpassing Chainlink in market value and ranking 8th by fully diluted cap. HYPE's strong network usage, competitive trading fees, and deflationary tokenomics drive robust trading volume and user growth, but only 33% of the supply is circulating. Valuation concerns persist as HYPE trades at a high fully diluted revenue multiple compared to peers, with long-term dilution risk due to future token unlocks. I'm initiating HYPE with a 'hold' rating, despite promising catalysts like the upcoming native stablecoin USDH. One of the best-performing digital assets year-to-date is the native token of Hyperliquid ( HYPE-USD ). HYPE is not a token that I have covered in the past. But, it remains a fast riser among cryptos, having recently passed Chainlink ( LINK-USD ) for the 11th most valuable token, according to CoinMarketCap. FD Cap Rankings (CoinMarketCap) In fact, by the fully diluted market, HYPE is actually the 8th most valuable token in the digital asset market. In this article, we'll get into what Hyperliquid is, the tokenomics of the HYPE token, and I'll elaborate on why I'm initiating coverage of HYPE with a 'hold' rating. What Is Hyperliquid? Hyperliquid can probably best be described as an L1 blockchain blended with a decentralized exchange, or DEX. Unlike many other DEXes in the market that are built on top of Layer 1 blockchains like Ethereum ( ETH-USD ) or Solana ( SOL-USD ), Hyperliquid utilizes its own L1 chain for trading. What separates a protocol like Hyperliquid from a more traditional DEX like Uniswap ( UNI-USD ) is that Hyperliquid primarily functions more like a trading platform than a token swapping application. For instance, users typically execute trades with perpetual futures and withdraw winnings in stablecoin USDC ( USDC-USD ). Depending on the asset, traders can get as much as 50x leverage on their positions while paying for gasless trades through an order book that lives on-chain. Competing platforms include dYdX ( DYDX-USD ) and GMX ( GMX-USD ). The network was launched by Harvard classmates Jeff Yan and "Iliensinc." Yan serves as CEO of Hyperliquid Labs - the core developer of Hyperliquid. Network Usage Usage of the network has been very strong so far in 2025. Cumulatively, Hyperliquid has onboarded nearly 700k users, with somewhere between 1.5k and 2k new users trading on the platform on a daily basis. Hyperliquid users (stats.hyperliquid.xyz) So far, over $2.6 trillion has been traded through Hyperliquid, with open interest currently sitting close to $14 billion, which is just shy of the all-time high for Hyperliquid. Open Interest (stats.hyperliquid.xyz) During the month of August, Hyperliquid produced $114.6 million in fees. Which was actually slightly more than the fees generated by Solana and Ethereum combined. Chains by Monthly Fees (Artemis) Hyperliquid did more than 8x the fees generated by Bitcoin in the month of August. Finally, August was the 6th consecutive month that Hyperliquid produced more fees than the three blockchains mentioned. HYPE Token Details At least to this point, the Hyperliquid platform has been highly successful as a perp trading DEX, and the 135% year-to-date performance of the HYPE token reflects that. Token data below is from CoinMarketCap and as of article submission on September 12th, 2025. Token Price: $56.00 Circulating Supply: 333,928,180 Circulating Market Cap: 11 Circulating Cap Rank: $18.8b Total Supply: 1,000,000,000 Fully Diluted Market Cap: $55.4b Fully Diluted Cap Rank: 8 As with any blockchain network or crypto token, the economics of the token itself should hold some weight for prospective investors. The HYPE token offers voting governance over the platform to tokenholders as well as a deflationary buyback program where revenue generated from the trading fees is used to burn the HYPE token. Thus, the more traders use Hyperliquid to make their wagers, the greater the potential deflation of the HYPE token. Importantly, the 33% circulating supply of HYPE is quite low relative to other L1s or order book platforms. Tokens in Millions Circulating Supply Total Supply Circulating % HYPE 333.92 1,000 33.4% DYDX 782.61 1,000 78.3% GMX 10.29 13.25 77.7% Source: CoinMarketCap The token allocation has 23.8% of HYPE coming to core contributors - all of which are still locked: HYPE Token Distribution ( CryptoRank ) Community rewards/emissions have 38.9% of the forthcoming supply, and the original distribution to users was 31% of HYPE tokens. Per CryptoRank, the next unlock is expected November 29th, when 216.6k HYPE will come out of lockup. This is a very small percentage of the total HYPE supply. While long-term dilution is certainly something investors should consider, the immediate dilution through the rest of the year appears to be minimal, and the burn mechanism should continue to propel HYPE higher so long as usage of Hyperliquid continues to grow. Valuation Part of the reason why Hyperliquid has grown to the degree that it has is due to the platform's take rate being so competitive compared with digital asset trading alternatives. The taker fee on the platform is just 2.5 basis points, which is lower than most centralized exchanges and decentralized exchanges, as far as I can tell. From a valuation standpoint, the HYPE token is trading at roughly 12.3x revenue and 45x fully diluted revenue. Hyperliquid vs Peers (Artemis) This makes HYPE cheaper than something like Raydium (RAY-USD) on Solana but considerably more expensive than several peers, including GMX. Also consider that a fully diluted market cap of $55 billion means HYPE is already valued higher than Nasdaq ( NDAQ ), Experian ( EXPGF ), and Standard Chartered ( SCBFF ). USDH Catalyst One of the more interesting imminent catalysts for Hyperliquid is the proposed native stablecoin USDH. Currently, Hyperliquid relies on externally minted stablecoins like USDC and Tether ( USDT-USD ). That will be soon changing when validators vote on an issuer for USDH on Sunday, September 14th. There have been numerous bids for USDH; including Ethena, Sky, and Agora, among others. Paxos has a quite compelling bid as well because it offers PayPal ( PYPL ) and Venmo integration of the coin. Something else to consider is the broader implications of USDH issuance. At this point, Hyperliquid is home to roughly 8% of the total USDC supply: Billions Hyperliquid Supply Total Supply % on Hyperliquid USDC $5.77 $72.01 8.0% USDT $0.18 $169.68 0.1% Source: DeFi Llama The rationale behind issuing a native stablecoin to the platform rather than using pre-existing coins from issuers like Circle Internet Group ( CRCL ) is that Hyperliquid can have greater control over the yield-generating collateral of USDH in addition to the trading fees. Thus, it would theoretically be bad for Circle for Hyperliquid to get into the stablecoin game with a different issuer, as it could limit USDC supply growth and, by extension, Circle's revenue expectations. Summary Hyperliquid is a very interesting L1 platform for a variety of reasons. It has the potential to disrupt the trading services of centralized exchanges as well as stablecoin issuers. There is no question users are growing and trading volume is robust. That said, my view is dilution is a long-term concern, and the fully diluted market valuation is quite elevated relative to peers. Some of that valuation is likely in anticipation of US Treasury yields from USDH being used to burn HYPE and further drive deflationary pressures on the token. For now, I'm going to call HYPE a 'hold' due to both valuation being high and circulating supply being low. In the shorter term, we might see HYPE continue its aggressive rally. But in the more medium term, I think Digital Asset investors may want to see confirmation that Hyperliquid can grow into its valuation before getting too exposed to the token.
