CoinW Research Institute: In-depth Research Report on HyperLiquid
CONTENTS
Abstract..……………………………………………………………………………….2
Project Introduction……………………………………………………..………….4
1. Product Features..……………………………………………………………..….5
2. Advantages of HyperLiquid.…………………………………………………….6
3. Data Analysis..………………………………………………………………………7
4. Token Ticket Auction for Spot Trading Seats…………………………………9
Analysis of the Hyperliquid Ecosystem………………………………………….10
1. The leading meme project in the ecosystem: PURR………………………..11
2. The token launch platform in the ecosystem: HFUN……………………….11
3. The first AI agent project: farm………………………………………………….11
Token Economic Model………………………………………………………………12
Team Background……………………………………………………………………..14
Investment and Financing Background………………………………………….14
Project Summary……………………………………………………………………….14
Abstract
Hyperliquid is an innovative decentralized platform that focuses on efficient perpetual futures trading. It offers perpetual contracts, spot trading, and a Layer 1 chain trading environment with low latency and high throughput. It employs HIP-1 and HIP-2 to enhance liquidity, requires no KYC, has low transaction fees, supports the development of DeFi applications with HyperEVM, and motivates community participation through HYPE tokens. As of December 2024, it has 230,000 users, a trading volume of $500 billion, and $1.12 billion in USDC of asset deposits. Its ecosystem includes projects such as PURR, HFUN, and farm. The total supply of HYPE tokens is 1 billion, which is distributed in multiple ways to encourage the development of the ecosystem. The team consists of experts in the trading field and is led by Jeff. It refuses external investment and is committed to becoming a top high-performance public chain, focusing on user experience and the principle of decentralization to attract more users and developers and enrich its ecosystem.
Project Introduction
Hyperliquid is an innovative decentralized trading platform that focuses on efficient perpetual futures trading. It has attracted the attention of a large number of users and investors through its unique liquidity aggregation technology and the distribution strategy of the native token HYPE.
Website: https://app.hyperliquid.xyz/
Twitter:https://x.com/HyperliquidX
1. Product Features
Perpetual Futures Trading: Users can trade perpetual contracts with no expiration date on Hyperliquid, supporting leveraged trading up to 50 times.
Spot Trading: Besides derivatives, Hyperliquid also supports spot trading, allowing users to directly buy and sell crypto assets.
High-Performance L1 Chain: Hyperliquid is built on its proprietary Layer 1 blockchain, supporting high throughput and low latency, providing an almost instantaneous trading experience.
HIP-1 and HIP-2 Standards: HIP-1: Allows the deployment of native tokens and the creation of spot order books on-chain.
HIP-2: The “Hyperliquidity” mechanism provides an innovative way to ensure liquidity that is permanently locked in the spot order books of HIP-1 tokens.
No KYC Required for Trading: As a decentralized platform, Hyperliquid does not require user identity verification (KYC), offering greater privacy protection.
Low Transaction Fees: Hyperliquid sets relatively low transaction fees, especially the negative fee model for market makers, which motivates users to provide liquidity.
HyperEVM Support: Hyperliquid supports an enhanced EVM, allowing developers to build various DeFi applications on it while seamlessly integrating with native components.
Community Participation and Rewards: Through a points system and airdrops, Hyperliquid encourages users to participate in and contribute to the development of the ecosystem. The distribution strategy of the HYPE token is also designed to motivate the long-term participation of the community.
2. Advantages of HyperLiquid
Decentralization and Transparency: As a decentralized platform, Hyperliquid offers completely transparent trading records and a KYC-free trading experience, enhancing users’ privacy and security.
High-Performance Trading: Built on its proprietary Layer 1 chain, Hyperliquid supports high throughput and low latency, providing rapid trade execution and reducing slippage.
Innovative Liquidity Mechanism: Through HIP-1 and HIP-2 standards, Hyperliquid introduces a new liquidity model, “Hyperliquidity,” ensuring market depth and stability.
Low Transaction Fees: The negative fee strategy for market makers and the overall low fee structure significantly reduce trading costs, attracting more traders.
Diverse Trading Products: It supports perpetual contract and spot trading, meeting the trading needs of different users.
User Incentives: Through the distribution of HYPE tokens and rewards for community participation, Hyperliquid incentivizes long-term user involvement and contribution, building an active ecosystem.
Community Governance: In the future, a community governance mechanism will be introduced, enabling HYPE token holders to participate in the platform’s decision-making process.
EVM Compatibility: HyperEVM supports developers and applications in the EVM ecosystem, expanding its application possibilities in the DeFi field.
Compliance and Openness: Despite being decentralized, Hyperliquid is also committed to compliance, ensuring that its services can operate legally worldwide.
3. Data Analysis
Hyperliquid is customized as a high-performance derivatives exchange Layer 1 and is compatible with the EVM. Depositing assets into Hyperliquid mainly relies on the Arbitrum Bridge. Currently, it supports USDT, USDC.e, and USDC assets on Arbitrum, but only USDC is supported as collateral. As of December 14, the assets in the Hyperliquid Deposit Bridge contract (0x2D…3dF7) reached 1.12 billion USDC and are still on an upward trend. If we compare the asset deposits of Hyperliquid with the clean assets of centralized exchanges (CEXs), Hyperliquid can rank as the 14th largest exchange globally, surpassing MEXC (with approximately $1.09 billion), with its next target being Bitget (with approximately $3.27 billion).
The Hyperliquid Assistance Fund has already made a profit of over $82 million.
The funds of the Hyperliquid Assistance Fund mainly come from the futures trading revenue of the Hyperliquid platform. That is, a portion of the USDC fees will enter this fund to support various activities on the platform, mainly including the repurchase of HYPE tokens. According to hypurrscan browser, from December 5 to 11:00 on December 9 (UTC), the Assistance Fund repurchased 567,083.22 HYPE tokens from the secondary market, with a repurchase value of $7,364,369.45 and an average price of about $12.99.
4. Token Ticket Auction for Spot Trading Seats
Project parties that want to list on Hyperliquid need to obtain the permission to issue new tokens through the Dutch auction mechanism, and auctions are usually held once every 31 hours. For a long time, Hyperliquid has focused more on derivatives trading. Participants in the Token Ticket Dutch auctions are mostly Meme projects, with auction prices rarely exceeding $20,000. However, with the wealth effect and popularity brought about by the HYPE TGE, and along with the opening of Hyperliquid EVM, it is expected that more types of projects will consider issuing tokens on Hyperliquid. In addition, some important Tickets that were once auctioned at low prices may be selected by a formal project with the same name in the future and become a shell for listing on Hyperliquid, and then be repurchased from the original project parties at a high price.
In recent auctions, the final prices have risen, with the “SOLV” Token ticket setting a new record for Hyperliquid’s auction on December 6 at a price of $128,000, and considering the upcoming TGE of Solv Protocol, there is a high possibility that this “SOLV” is the same as that one. If that’s the case, Solv Protocol will become the first major project to list on Hyperliquid.
Analysis of the Hyperliquid Ecosystem
Many people think that Hyperliquid is a decentralized derivatives exchange, but in essence, it is a high-performance L1 public chain with zero gas fees. Moreover, the market value of the $HYPE token has reached as high as $20 billion, which can be directly compared to Sui and Solana. Many high-quality projects have emerged in the ecosystem:
1. The leading meme project in the ecosystem: PURR
Twitter:https://x.com/hyperintern
This is the leading meme project of Hyperliquid, with a market value of $340 million, and a daily trading volume of $65 million, which has a large scale.
2. The token launch platform in the ecosystem: HFUN
Website:https://hypurr.fun/
It can be simply understood as pumpfun on the Solana chain. Currently, it has a market value of $150 million and a daily trading volume of $20 million.
3. The first AI agent project: farm
Twitter: https://x.com/thefarmdotfun
It can be simply understood as a project like ai16z or virtual. Currently, it has a market value of $36 million and a daily trading volume of $43 million.
Overall, HyperLiquid’s decentralized derivatives business is already very well-developed. Whether it is user experience or liquidity, it is top-notch. But the ecosystem is still on the verge of an outbreak.
Token Economic Model
- Total Supply: The total supply of HYPE tokens is 1 billion.
- Token Distribution: Genesis Distribution: 31% of the tokens (310 million) were distributed to users who participated in the genesis event, and these tokens have been fully unlocked.
Future Emissions and Community Rewards: 38.888% of the tokens are reserved for future emissions and community incentives, including distribution through activities, points, and participation rewards.
Core Contributors: 23.8% are allocated to the team and early contributors. These tokens will be locked for one year after the genesis, and most of them will be unlocked between 2027 and 2028, while some will continue to be unlocked after 2028.
Hyper Foundation Budget: 6% are used to support the development and ecosystem construction of Hyperliquid.
Community Grants: 0.3% are used to provide funding for community projects.
Hyperliquidity (HIP-2): 0.012% are allocated to the “Hyperliquidity” mechanism for permanently locking liquidity.
- Uses: Transaction Fees: HYPE tokens can be used to pay transaction fees for trading on the Hyperliquid platform.
Governance: Governance mechanisms may be introduced in the future, allowing HYPE token holders to participate in platform decision-making.
Incentives: A points system and airdrop activities are used to motivate users to participate and provide liquidity.
- Points System: Points can be obtained through trading volume, participation in activities, etc. These points can be converted into HYPE tokens or other rewards, promoting user activity and the healthy development of the platform’s ecosystem.
- No Private Sale or Centralized Exchange Allocation: Hyperliquid has not reserved HYPE tokens for private investors, centralized exchanges, or market makers to maintain its decentralized philosophy.
Team Background
The team of Hyperliquid consists of experts who have served as market makers in centralized exchanges. They provided services for several large platforms between 2020 and 2022. The only identified individual is Hyperliquid’s founder Jeff (https://x.com/chameleon_jeff)
Investment and Financing Background
None. It has not accepted any investment from any institution.
Project Summary
HyperLiquid’s ultimate goal is to become a top-tier high-performance L1 public chain. Founder Jeff learned from the dilemma of other decentralized derivatives exchanges after airdrops, where no one trades, that only by putting users first can the project go further and better. Therefore, the project has rejected all investment institutions and partnerships. It has also not actively listed on any centralized exchanges. It directly airdropped 31% of the tokens to users. And it maintains the characteristics of extremely low transaction fees and zero gas fees. This is the ultimate form of a decentralized derivatives exchange. With the improvement of the project’s ecosystem, more top developers and users will enter the HyperLiquid ecosystem.
