Seven Reasons to Be Optimistic About Hyperliquid: The Evolution from DEX to L1 Ecosystem
This article will deeply analyze the development logic and investment value of Hyperliquid. Just like the boom in the Solana ecosystem at the end of 2023, the Hyperliquid ecosystem is currently in a similar early explosion phase.Author: Aylo
Compiled by: Bernard, ChainCatcher
In the cryptocurrency space, there are very few decentralized projects that can truly challenge the dominance of centralized exchanges. Hyperliquid is one of the most notable, achieving breakthroughs not only at the product level but also showcasing unique competitive advantages in its economic model and ecosystem development. Just like the explosive growth of the Solana ecosystem at the end of 2023, the Hyperliquid ecosystem is currently in a similar early explosive phase.
01 Hyperliquid embodies the true spirit of crypto
Hyperliquid started as a DEX with no KYC, zero gas fees, and top-notch user experience, gradually building its own L1 ecosystem. Its success stems from a series of "combination punches":
- Self-funding: No exploitative private fundraising rounds; the TGE is merely a beginning, not a cash-out.
- Successful airdrop: The genesis airdrop allocated 30% of the total supply, and the HYPE token has risen over 10 times since its launch.
- Product first: Build products based on user needs → Attract long-term users → Airdrop rewards to users → Continue expansion through building on-chain ecosystems.
- Future incentives: 40% of the HYPE supply (worth billions of dollars) is reserved for future incentives, potentially including another airdrop.
- Strong token economics: 99% of protocol fees are used to buy back HYPE.
- Efficient and streamlined team: The Hyperliquid team consists of only 11 people, but the average revenue exceeds $100 million.
Unlike most projects that vanish after "mercenary mining," Hyperliquid has become even stronger after the airdrop. All metrics are soaring, and it is on its way to becoming the first DEX that can truly compete with giants like Binance.
02 Hyperliquid is a cash cow, HYPE is severely undervalued
Based on approximately $114 million in monthly fees, Hyperliquid's annualized revenue is about $1.37 billion. Since 99% of the revenue is used for HYPE buybacks, theoretically, all circulating HYPE could be completely bought back in less than 9 years—no other protocol in the crypto space has such a strong economic model.
03 Hyperliquid ecosystem is rapidly growing
The TVL chart of Hyperliquid says it all—growth is accelerating.
Some leading players in the DeFi space (Ethena, EtherFi, Pendle, Morpho) are expanding into HyperEVM. These "smart" teams are investing resources here, undoubtedly signaling that something significant is happening.
Meanwhile, Hyperliquid-native projects like Kinetiq and Liminal are also thriving, and the recent integration of native USDC into Hyperliquid has further cleared obstacles for ecosystem development.
04 HYPE is a powerful collateral asset
Just like Ethereum's ETH, Solana's SOL, and BNB Chain's BNB, any L1 that wants to thrive needs a strong collateral token. Most Layer 1s lack such a strong asset, limiting their DeFi growth. However, HyperEVM has HYPE, which is considered "one of the strongest assets in the crypto space."
05 Builder Codes: a brilliant distribution strategy
This mechanism allows developers to build trading applications using Hyperliquid's infrastructure and earn a share of the fees from the trades they guide, transforming DeFi builders into distribution partners for Hyperliquid, creating a true win-win model.
For example, Phantom has launched perpetual contract trading through Hyperliquid, and Rabby Wallet has hinted at similar initiatives, while protocols like Ranger Finance and Mass have also begun to leverage this mechanism.
06 HIP-3 is rewriting the rules of the game
Anyone can create a perpetual contract market by staking 1 million HYPE (approximately $42 million). Deployers can set parameters and earn up to 50% of the fees.
Unlike Builder Codes distribution, HIP-3 involves product expansion. More markets → more users → more fees → more buybacks → stronger attractiveness, creating a positive feedback loop.
07 The synergy between Hyperliquid and HyperEVM
Hyperliquid and HyperEVM are not two different concepts but two sides of the same coin—HyperEVM makes Hyperliquid programmable and combinable with the rest of DeFi, while Hyperliquid provides liquidity and cash flow, bringing instant trading volume, credibility, and revenue to the exchange.
This creates a unique feedback loop: DeFi protocols on HyperEVM can directly access Hyperliquid's deep liquidity and order book while using EVM smart contracts.
Part Two: A panoramic interpretation of Hyperliquid airdrop projects: uncovering golden opportunities in the HyperEVM ecosystem
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