Exploring the Future of HYPE in the Perpetual DEX Space

By: crypto insight|2025/11/21 10:00:12

Key Takeaways

Hyperliquid stands out in the decentralized exchange (DEX) space with a distinctive model, allocating 97% of its revenue towards buying back its own token, HYPE.
Hyperliquid generates an annualized revenue exceeding $13 billion, showing significant potential for growth in the DEX market.
Various market scenarios suggest the price range for HYPE could be between $45 and $180, depending on market conditions.
The platform’s innovative design with two engines – perpetual contract trading and HyperEVM – drives HYPE’s value through increased trading volume and token buybacks.
Hyperliquid’s efficient tokenomics model is backed by visible cash flow and aggressive buyback strategy, indicating strong future prospects for HYPE.

Understanding Hyperliquid’s Market Position

In the bustling decentralized exchanges (DEXs) realm, Hyperliquid has emerged as a dominant player in the perpetual DEX segment. Its distinction lies in a simple yet compelling economic model: 97% of all generated trading fees are funneled back into purchasing its native token, HYPE, from the open market. This potent buyback mechanism offers an enticing narrative for investors considering the long-term potential of DEX platforms.

Current Status and Financial Health

Hyperliquid’s marketplace achievements are illustrated by robust figures: daily trading volumes soar to over $80 billion, contributing to an annualized income surpassing $13 billion. With a market capitalization around $10 billion and a fully diluted valuation nearing $380 billion, the systemic strength is clear. A significant portion of HYPE, approximately 42%, is staked, while the treasury is solid with a balance of 35 million HYPE tokens.

The core mechanics that bolster investor interest are primarily its buyback strategy. Hyperliquid ensures that nearly every dollar earned through exchange operations translates into purchasing pressure on HYPE, thereby increasing its demand and potentially its value over time. The practice of burning a portion of HYPE through gas fee payments on its proprietary HyperEVM further enhances the deflationary pressure, favoring token holders.

Hyperliquid’s Dual Engines for Growth

Engine 1: Perpetual Contract Trading

The traditional engine for Hyperliquid revolves around perpetual contract trading. This avenue transforms incoming trading fees into nearly constant buyback momentum, driven by high trading volumes and the associated 0.04% fee on these transactions.

Engine 2: HyperEVM

The introduction of HyperEVM adds a second dimension to Hyperliquid’s growth strategy. Users pay gas fees within this EVM layer using HYPE, creating an additional demand for the token. These fees are not only consumed but partially burned, reinforcing the deflationary trend of HYPE.

HyperEVM also extends utility by hosting on-chain applications, further increasing block space demand and subsequently, HYPE’s relevance in fees.

Market Scenarios for HYPE Valuation

To appreciate Hyperliquid’s potential, several predictive scenarios offer insight into future HYPE pricing based on market growth and platform’s expansion.

Scenario 1: Bear Market

In a conservative market outlook where the total DEX trading volume grows modestly and Hyperliquid maintains its current market share:

Total DEX trading volume might multiply by 1.5 times.
HYPE’s implied price settles between $45 and $50 with an annual buyback of approximately $18 billion.

Scenario 2: Base Case

In a standardized scenario of steady growth:

Perpetual DEX trading doubles, with Hyperliquid increasing its market stake to around 30%.
This results in an estimated HYPE price of $80 to $90, supported by a $33.4 billion annual buyback.

Scenario 3: Bull Market

A highly optimistic scenario projects:

A threefold increase in market activity with Hyperliquid capturing a 40% share.
Predicting HYPE’s value could soar between $160 and $180, driven by an annual buyback amounting to $66.8 billion.

While these projections outline plausible pathways, they represent potential scenarios rather than definitive outcomes. Market dynamics and new technological or product developments could further influence HYPE’s trajectory.

The Bullish Perspective on HYPE

HYPE’s compelling allure lies within Hyperliquid’s revenue visibility and the simplicity of its aggressive buyback model. In leveraging perpetual contract growth, the platform has effectively turned a significant portion of its fees into a reliable mechanism for value appreciation.

The anticipation of 2026 as a pivotal altcoin season adds to this bullish narrative, with the groundwork laid for a potential HYPE price target of $250 under a fully optimistic market scenario.

Conclusion

Hyperliquid’s proposition is far from merely narrative-driven technology hype; it embodies a structured approach with sound tokenomics that hinges on integrating a high liquidity DEX within a rapidly evolving decentralized finance landscape. With a significant portion of trading fees continually reinvested into HYPE buybacks, Hyperliquid offers a strategically sound investment possibility for those bullish on DEX growth and evolving crypto ecosystems.

FAQ Section

What makes Hyperliquid different from other DEX platforms?

Hyperliquid distinguishes itself by using 97% of its transaction fees to buy back its native token, HYPE, creating a continual upward price pressure. This strategic mechanism, along with its HyperEVM operations, draws significant interest from investors looking for reliable growth prospects in decentralized finance.

How does HyperEVM contribute to Hyperliquid’s value?

HyperEVM serves as a complementary engine to Hyperliquid’s main trading activities. Users pay transaction fees in HYPE, which are partially burned, reducing supply and boosting value. Additionally, increased adoption of on-chain applications raises the demand and relevance of HYPE.

Why is the buyback mechanism so crucial to HYPE’s value?

The buyback strategy ensures that trading revenues directly benefit token holders by increasing demand for HYPE on the open market. This model aligns the platform’s success with token value, giving investors a clear stake in Hyperliquid’s performance and growth.

What are the potential risks associated with investing in HYPE?

The primary risk lies in Hyperliquid’s ability to maintain its trading volume and enforce the 97% buyback policy consistently. Sudden shifts in the regulatory landscape or changes in competitive dynamics could also impact market perceptions and performance.

What are the implications of a potential bull market on HYPE’s growth?

A bull market scenario for DEXs, especially one as outlined for 2026, would likely drive substantial increases in trading volumes and market share for Hyperliquid. This would enhance HYPE’s value significantly as buybacks increase, making it a potentially lucrative investment under optimized conditions.

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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