Hyperliquid achieved nearly 10% BTC volume and ETH in less than a single year. The company has even overtaken DeFi competitors and now challenges CEXs.
HYPE, despite its unmatched revenue growth, trades for a deep discount to Solana. This has sparked a debate about whether or not it is severely undervalued.
Underdog: What’s the hype?
In the past six months, Hyperliquid has collected $409 millions in fees from users. It is 23% higher than Ethereum, and 75% above Solana. Yet its token HYPE is trading at a discount of 88% to ETH, and a discount of 62% to SOL when fully diluted.
Experts in “The DeFi Report” point The gap could close soon due to the combination of unique tokenomics and product strength.
Hyperliquid, unlike many other crypto projects, launched its token distribution without the involvement of venture capitalists or angel investors. The company distributed 31% to its early users. This was worth $1.2 million at that time, and is now valued at over $4.7 Billion. This turned traders from investors and prevented the pressure of VC unlock cycle selling.
The project also set aside 6% of the foundation budget for operations, and diverted user fees to an Assistance Fund which purchases HYPE on the open market. It reduces the token float while promoting price discovery.
Hyperliquid’s main product is an on-chain, high-throughput central limit orderbook that offers perpetuals and spot trades. The system offers low fees and block times of less than a second. This system mimics the feeling of a central exchange, but it is transparent.
The platform is experiencing a surge in trading activity, with daily volume of $10-20 billion, and open interest of $13 billion across all assets. This represents 9-11% percent of the global BTC/ETH trades. Hyperliquid generated The fees collected in the last thirty days totaled $107 Million, which is more than Solana ($40 million) and Ethereum ($67 million).
The majority of revenue comes from token purchases. According to the report, in just one month alone $92.2 millions in fees resulted in $90.2 million worth of HYPE tokens being purchased. The analysts say that this is a form. “buyback yield” The revenue is directly attributed to the holders. This differs from traditional Fintech and tech valuations, where companies are responsible for collecting revenues.
In addition to expansion, the growing popularity of this project is also due to it. Hyperliquid’s development has gone beyond being a DEX that is perpetual, to establishing its own Layer 1 Ecosystem. HyperEVM is one example of how developers can build on deep liquidity in the order book for the protocol without running their own exchange. The combination of this strategy with the integrations between wallets like Phantom, Rabby and Rainbow as well as lending products and bridging services such as Hyperlend, Unit Protocol and Hyperlend, have widened and strengthened its network effects.
Hyperliquid’s BTC and ETH open interest represents 32% of CME’s, 7.6% of the total across both crypto-native exchanges and CME. Open interest in BTC and ETH is 32% higher than CME, and represents 7.6% more of all crypto exchanges combined.
Riscs of Mounting
There are still risks, particularly with the growing competition of Coinbase and Robinhood. Also, this system relies on a limited set of validators, which raises questions regarding sustainability.
Analysts note, however, that HYPE’s buyback model, combined with its market penetration, suggests the token is still undervalued compared to Solana or Ethereum.
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Source: cryptopotato.com
