Hyperliquid: The Most Debated Token of the Cycle
What Bulls Miss. What Bears Ignore. What the Data Actually Shows.
HYPE | $30.69 | December 6, 2025
✅ What’s undeniably good: $1.3B annualized revenue (verified), 75-80% perp DEX market share, $900M+ in buyback treasury, November unlock showed 77% retention/restaking
⚠️ What’s genuinely risky: Validator stake concentration (~80% foundation), JELLY precedent for governance override, 24-month team unlock schedule, closed-source client stack
HYPE is the most debated token of the cycle. Bulls call it the future of trading: a CEX-killer generating $1.3B in annualized revenue with an 11-person team. Bears call it a centralized time bomb: validators mostly controlled by the foundation, 68% of supply under insider control, and an insurance fund that nearly collapsed in March 2025.
Both narratives contain truth. Both miss what matters.
We pulled the primary source data. Verified the validator count. Analyzed the insurance fund mechanics. Mapped the supply distribution. Stress-tested the buyback math. Compared valuations to dYdX and GMX.
Our conclusion: Cautiously bullish. The infrastructure works, the revenue is real, and the valuation discount is material. The risks are genuine but quantifiable. Position sizing matters more than direction.
The Signal: HYPE trades at roughly 6-7x run-rate fee revenue (market cap divided by annualized fees — a rough “how many years of fees am I paying for?” metric) while commanding 75-80% of the decentralized perpetuals market. If this were a TradFi exchange, it would be considered cheap. The market is pricing in catastrophic risk. If that risk fails to materialize, the current price offers meaningful asymmetry.
At a Glance
| Metric | Reading | Signal |
|---|---|---|
| Price | $30.69 | 🟡 |
| Market Cap (Circ.) | $8.3B | 🟢 |
| FDV | $30.7B | 🟡 |
| Circulating Supply | 270.8M (CoinGecko) | 🟡 |
| TVL | $4.34B (core protocol) | 🟢 |
| 24H Perp Volume | $6.32B | 🟢 |
| Open Interest | $6.30B | 🟢 |
| Fees (Annualized) | $1.317B | 🟢 |
| Revenue (Annualized) | $1.283B | 🟢 |
| 30D Fees | $107.93M | 🟢 |
| Cumulative Fees | $679.9M | 🟢 |
| MCap/Revenue | ~6.5x | 🟢 |
| FDV/Revenue | ~24x | 🟡 |
| Validator Count | 24-27 active | 🟡 |
| Assistance Fund Holdings | ~$900M-$1.0B (est.) | 🟢 |
| HLP Vault | $448M | 🟢 |
Working Probabilities (subjective, not model outputs):
| Scenario | Probability | Price Target |
|---|---|---|
| 🟢 Dominance Continues | 45% | $55-80 |
| 🟡 Competition Erodes Share | 35% | $20-40 |
| 🔴 Black Swan / Regulatory / Insurance | 20% | <$15 |
Read Paths:
- 🏃 2 min: Read Opening Hook + At a Glance + Verdict
- 📖 8 min: Add Valuation Framework + JELLY Incident + Supply Structure
- 📚 18 min: Full report with all sections
What Everyone Thinks Is Happening (The Noise)
The Bull Consensus
Crypto Twitter’s bull case runs something like this: Hyperliquid is the first decentralized exchange to genuinely compete with Binance on execution quality. The platform processes $6B+ daily with sub-second finality. The team rejected VC funding, distributed 31% of tokens via airdrop to actual users, and directs 99% of perps and spot fees to buybacks via the Assistance Fund. No FTX-style conflicts. No token unlocks from early investors who need exits. Just a lean 11-person team building what traders actually want.
The numbers support this narrative. $1.3B annualized revenue. 75-80% market share in decentralized perps. A Nasdaq-listed treasury vehicle (PURR) backed by Bob Diamond and Paradigm raising capital specifically to accumulate HYPE. Arthur Hayes calling it hard to replicate.
The Bear Consensus
The bear case is equally coherent: Hyperliquid is a centralized exchange wearing DeFi clothes. The JELLY incident in March 2025 proved validators will override market outcomes when it suits the protocol. Stake distribution remains opaque, with more than half concentrated in foundation validators. The client stack is closed-source. $30.7B FDV prices in perfection.
And the supply structure? 23.8% to team with unlocks beginning November 2025. Monthly unlocks of ~1.75M tokens ($60M+) for 24 months. The buyback narrative only works if revenue stays elevated; a 50% volume decline breaks the math.
Both narratives are internally consistent. Neither is complete.
What the Data Actually Shows (The Signal)
Revenue Verification
Source: DefiLlama (Hyperliquid Combined)
| Metric | Value | Verification |
|---|---|---|
| Fees (Annualized) | $1.317B | ✅ |
| Revenue (Annualized) | $1.283B | ✅ |
| Fees 30D | $107.93M | ✅ |
| Fees 7D | $15.92M | ✅ |
| Fees 24H | $2.92M | ✅ |
| Cumulative Fees (All Time) | $679.9M | ✅ |
| Cumulative Revenue | $664.96M | ✅ |
The revenue is real. $108M in the last 30 days, verified on-chain. This puts Hyperliquid ahead of Ethereum on fee generation during peak periods and consistently in the top 3-5 protocols globally.
Fee Structure: 99% of perps and spot fees flow to the Assistance Fund for HYPE buybacks. 1% goes to HLP for market making/liquidation services.
Market Dominance Verification
Sources: OKX Research, NFTEvening, CCN, DefiLlama
| Period | Hyperliquid Share | dYdX Share | GMX Share |
|---|---|---|---|
| Jan 2025 | 64.8% | ~19% | ~5% |
| Mid-2025 | 75%+ | <5% | <5% |
| Dec 2025 | 75-80% | <2% | <3% |
Hyperliquid’s market share trajectory is unprecedented. dYdX dominated with 80%+ share just two years ago. By mid-2025, the positions inverted completely. Jupiter (Solana) now sits in second place, but still trails significantly.
Assistance Fund & Buyback Mechanics
Sources: OKX Research, DWF Ventures, CryptoRank, CoinGecko
We estimate the Assistance Fund currently holds roughly $900M-$1.0B of HYPE at current prices, based on DWF/OKX/CoinGecko data. The range reflects source differences and mark-to-market fluctuations.
| Metric | Value | Source |
|---|---|---|
| Total Buyback Spend (2025) | $644.64M+ | CoinGecko/OKX |
| Tokens Acquired | 28.5-34.7M HYPE | DWF Ventures |
| Current Fund Holdings | ~$900M-$1.0B | Multiple (est.) |
| Share of All Crypto Buybacks (2025) | 46% | CoinGecko |
| Average Acquisition Price | ~$14-19 | Calculated |
| Paper Gains | $500M-$600M+ | Calculated |
Critical Distinction: Tokens are bought into a treasury, not burned. The economic effect depends on long-term treatment.
| Scenario | Effect | Signal |
|---|---|---|
| Tokens restaked, never sold | Quasi-retirement; behaves like burn | 🟢 |
| Tokens used for grants/incentives | Effective dilution | 🟡 |
| Tokens sold in distress | Direct sell pressure | 🔴 |
November 2025 Unlock: The First Test
Sources: CryptoRank, Bitcoin/Ethereum News, On-chain analysis
The November 29, 2025 unlock distributed 1.75M HYPE (~$60M) to core contributors. This was the first major team unlock since the November 2024 airdrop.
| Action | Amount | % of Unlock |
|---|---|---|
| Sold OTC (to Flowdesk) | 609,100 HYPE | 23.4% |
| Restaked by Hyperlabs | 854,000 HYPE | 33% |
| Restaked by team members | ~234,600 HYPE | 9% |
| Held (not moved) | ~610,000 HYPE | 35% |
Key Finding: Only 23.4% sold. Over 40% immediately restaked. The market priced in $500M/month selling pressure (per Arthur Hayes); reality was ~$20M. This is bullish signal #1.
Future Unlock Math:
At current behavior (23% of unlocks sold), buybacks overwhelm unlock supply even with a 50% revenue drop. The system only breaks if both revenue collapses ~80% AND insiders materially increase sell-through.
| Scenario | Monthly Revenue | Buybacks | Selling (23%) | Net Flow |
|---|---|---|---|---|
| Current | $108M | $107M | ~$14M | +$93M |
| Mild Bear (-30%) | $75M | $74M | ~$14M | +$60M |
| Bear (-50%) | $54M | $53M | ~$14M | +$39M |
| Panic Sell (50%) | $108M | $107M | ~$30M | +$77M |
Note: Dollar values assume constant price. In practice, a 50% price drawdown would halve the dollar value of unlocks as well, creating a partially self-correcting dynamic.
What the Noise Concealed (The Pivot)
Valuation Disconnect Analysis
The surface narrative treats HYPE as expensive at $30.7B FDV. The data tells a different story.
| Protocol | Revenue (Ann.) | MCap | FDV | MCap/Rev | Share |
|---|---|---|---|---|---|
| Hyperliquid | $1.28B | $8.3B | $30.7B | 6.5x | 75-80% |
| dYdX | ~$45M* | ~$180M | ~$400M | ~4x | <2% |
| GMX | ~$30M* | ~$90M | ~$150M | ~3x | <3% |
*Estimates based on recent data; dYdX and GMX revenues have declined significantly.
The Multiple Gap: dYdX and GMX trade at 3-4x revenue with declining share. Hyperliquid trades at 6.5x revenue with 75%+ share and growing. The FDV/Revenue multiple (~24x) reflects future dilution, but the circulating cap multiple is competitive with peers that are actively losing market share.
Comparable Analysis (TradFi):
| Exchange | Revenue | MCap | P/Rev |
|---|---|---|---|
| CME Group | ~$5.5B | ~$85B | ~15x |
| ICE | ~$8.5B | ~$90B | ~11x |
| Coinbase | ~$3.5B | ~$45B | ~13x |
| Hyperliquid | ~$1.3B | $8.3B | ~6.5x |
By TradFi exchange comparables, HYPE is one of the cheapest high-growth exchange assets available.
The Team Factor
Source: IQ Wiki, DataWallet, PANews, Hyperliquid Wiki
| Person | Role | Background |
|---|---|---|
| Jeff Yan | Founder/CEO | Harvard Math/CS, Physics Olympiad Gold, Hudson River Trading |
| iliensinc | Co-founder | Harvard classmate, technical leadership |
| Team Size | 11 people | Mostly engineers, Singapore-based |
Jeff Yan’s background explains Hyperliquid’s execution quality: Physics Olympiad gold medalist, Harvard Math/CS double major, Hudson River Trading alumni. The 11-person team has processed $2+ trillion in volume without major technical failures.
No VC Structure:
- Zero external funding raised
- No investor unlocks
- 31% distributed to users via airdrop
- Team allocations (23.8%) vest over 24 months with year-one cliff
Hyperliquid Strategies (PURR): The Institutional Signal
Sources: GlobeNewswire, Nasdaq, SEC Filings
| Element | Detail |
|---|---|
| Ticker | PURR (Nasdaq) |
| Trading Start | December 3, 2025 |
| Structure | Digital asset treasury company |
| Chairman | Bob Diamond (former Barclays CEO) |
| Sponsors | Atlas Merchant Capital, Paradigm |
| CEO | David Schamis |
| Current Holdings | ~12.6M HYPE + $300M cash |
| Target | $1B for HYPE accumulation |
| Strategy | Stake + accumulate |
What It Signals: TradFi executives filed SEC paperwork, completed a Nasdaq listing, and are raising $1B specifically to accumulate HYPE. They clearly believe they can navigate the regulatory risk well enough to list a HYPE-accumulation vehicle on Nasdaq.
Caveat: The $1B isn’t deployed yet. If capital raising stalls, this catalyst weakens.
The JELLY Incident: Centralization Risk Crystallized
Sources: OAK Research, Halborn Security, CoinDesk, Arkham Intelligence
Timeline (March 26, 2025)
| Time (UTC) | Event |
|---|---|
| 10:00 | JELLY pumped 13% (test phase) |
| 12:15 | 30% dump; price falls from $0.1287 to $0.0083 |
| 12:50 | Attacker opens $4.5M short + $2.5M longs |
| 13:00 | Attacker forces liquidation, HLP inherits short |
| 13:30 | External pump begins; JELLY up 400%+ |
| 14:30 | HLP unrealized loss reaches $12-13.5M |
| 15:00 | Validators vote to delist |
| 15:15 | Positions settled at $0.0095 (not $0.50) |
The Precedent Problem
The JELLY intervention demonstrated the team’s willingness and ability to protect the protocol from catastrophic loss. It also crystallized the centralization risk rather than resolving it.
The risk here is not hidden insolvency or FTX-style fraud — it’s governance discretion. The same emergency power that saved HLP in March could, in theory, be mis-used elsewhere. If validators can delete a market and settle positions at an arbitrary price for JELLY, they retain the theoretical ability to intervene in any market.
Validator quorum was reached in 2 minutes with zero dissenting votes. This speed suggests either remarkable coordination or concentrated control.
| Perspective | Likely View |
|---|---|
| Institutional DD | Often disqualifying 🔴 |
| Traders (platform risk tolerance) | Acceptable with sizing 🟡 |
| DeFi purists | Fundamental compromise 🔴 |
| Pragmatists | Necessary evil 🟡 |
Post-Incident Improvements
| Change | Status | Signal |
|---|---|---|
| Isolated liquidator vault | ✅ Implemented | 🟢 |
| Lower ADL thresholds | ✅ Implemented | 🟢 |
| Dynamic OI caps | ✅ Implemented | 🟢 |
| Margin tiers by position size | ✅ Implemented | 🟢 |
| ADL fired in Oct 2025 stress | ✅ System worked | 🟢 |
ADL = auto-deleveraging, the forced reduction in winning positions to cover losses when the insurance fund is stressed.
The protocol learned. Whether the learning is sufficient remains to be tested.
Validator Decentralization: Degree, Not Existence
Sources: OAK Research, CryptoBriefing, The Block, Medium (Rabbit)
Validator Count Evolution
| Date | Validator Count | Notes |
|---|---|---|
| Launch | 4 | Heavy criticism |
| Jan 2025 | 16 | Staking launch |
| Mid-2025 | 24-27 | Current state |
| Target | 50+ | Q2 2026 goal |
The bear case citing “4 validators” is outdated. The concern about centralization is not.
Current State Assessment
| Question | Status | Signal |
|---|---|---|
| Validators operationally independent? | Unknown | 🟡 |
| Stake concentration | ~80% foundation (est.) | 🔴 |
| Geographic diversity | Unverified | 🟡 |
| Client stack open-source? | No | 🔴 |
| Validator selection merit-based? | Yes | 🟢 |
| Delegation program active? | Yes | 🟢 |
Bottom line: Validator count increased from 4 to 27. Stake distribution remains opaque and client stack closed-source. The decentralization concern is real; what’s changed is the degree, not the existence.
Supply Distribution: The “No VC” Reality Check
Sources: Tokenomist, CoinGecko, DropsTab
| Allocation | % | Control | Vesting |
|---|---|---|---|
| Genesis Airdrop | 31.0% | Community | Fully unlocked |
| Future Emissions (TBD) | 38.9% | Foundation discretion | Gradual |
| Core Contributors | 23.8% | Team | 1-year cliff + 24mo vest |
| Hyper Foundation | 6.0% | Foundation | Operational |
| Community Grants | 0.3% | Community | Ongoing |
Analysis: While no VCs received allocation, insiders control 68.7% of total supply (team + foundation + future emissions). The “community-owned” narrative is directionally true but overstated.
What matters: Unlock schedules are transparent, no external investor has a pre-arranged exit, and the first unlock showed 77% retention/restaking.
HyperEVM: The Ecosystem Bet
Sources: Nansen, deBridge, Galaxy Digital, The Defiant
Growth Metrics
| Metric | Launch (Feb 2025) | Mid-2025 | Signal |
|---|---|---|---|
| TVL | <$50M | ~$2B | 🟢 |
| Daily Transactions | Low | 200-400K | 🟢 |
| Daily Active Users | Low | 15-40K | 🟢 |
| Top 10 Chain by TVL | No | Yes (#9) | 🟢 |
Note: TVL figures vary depending on whether you include HyperEVM ecosystem TVL or only the core perps protocol. We default to CoinGecko’s narrower definition ($4.34B) in At a Glance and note the ~$5B ecosystem figure separately.
Leading Protocols
| Protocol | Category | TVL Share |
|---|---|---|
| Hyperliquid | DEX/Perps | 24.8% |
| Felix Protocol | CDP/Lending | 18.4% |
| HyperLend | Lending | 17.2% |
| HyperSwap | DEX | ~5% |
| HypurrFi | DeFi | ~3% |
Upcoming Catalysts
| Catalyst | Status | Impact |
|---|---|---|
| HIP-3 Permissionless Perps | Testnet | 🟢 |
| Ethena USDe Deployment | Live | 🟢 |
| USDT0 Integration | Announced | 🟢 |
| CoreWriter (HyperCore ↔ HyperEVM) | Live | 🟢 |
| beHYPE Liquid Staking | Pre-deposits | 🟡 |
Repricing Scenarios
🟢 Bull Case: $55-80
Required:
- Market share holds 65%+
- Revenue sustains $80M+/month
- No major security incidents
- HyperEVM TVL > $3B
- PURR capital raise completes
Catalysts:
- Major CEX listing
- HyperEVM DeFi ecosystem matures
- Regulatory clarity (CFTC perps guidance)
- Institutional adoption via PURR
Multiple Expansion: P/Revenue → 12-15x on circulating cap
🟡 Base Case: $25-40
Assumptions:
- Market share erodes to 50-60%
- Revenue -20-30% from peak
- Buybacks offset unlocks
- Competition gains ground
- No major incidents
Multiple Compression: P/Revenue → 6-10x
🔴 Bear Case: $8-15
Required (any one):
- SEC enforcement action
- Insurance fund failure (HLP wipeout)
- Team dumps >50% of unlocks
- Market share <40%
- Major security exploit
- State-sponsored-scale attack
Multiple Collapse: P/Revenue → 2-4x
Invalidation Triggers
| Trigger | Threshold | Timeframe | Signal |
|---|---|---|---|
| Market Share | <50% | 3 months | 🔴 |
| Monthly Revenue | <$40M | 2 consecutive | 🔴 |
| HLP Balance | <$200M | Any time | 🔴 |
| Team Selling | >50% of unlocks | 3 consecutive | 🔴 |
| Validator Progress | No 50+ by Q2 2026 | 6 months | 🟡 |
| Bridge Exploit | Any significant | Any time | 🔴 |
| Regulatory Action | SEC/CFTC enforcement | Any time | 🔴 |
The Verdict
Bear Case Risks (Weighted)
| Risk | Weight | Status | Signal |
|---|---|---|---|
| Centralization / Validators | 25% | Improving, not resolved | 🟡 |
| Regulatory | 20% | PURR suggests confidence | 🟡 |
| Competition | 15% | Share holding | 🟢 |
| Insurance Fund | 15% | Post-JELLY improvements | 🟡 |
| Unlock Pressure | 15% | Nov unlock bullish | 🟢 |
| Cyclicality | 10% | Revenue volatile | 🟡 |
Bull Case Catalysts (Weighted)
| Catalyst | Weight | Status | Signal |
|---|---|---|---|
| Revenue Efficiency | 25% | $1.3B verified | 🟢 |
| Buyback Mechanics | 20% | ~$900M-$1B accumulated | 🟢 |
| Market Dominance | 20% | 75-80% share | 🟢 |
| Institutional (PURR) | 15% | Nasdaq listed | 🟢 |
| No VC Overhang | 10% | Confirmed | 🟢 |
| HyperEVM Ecosystem | 10% | Growing fast | 🟢 |
Bottom Line
| Question | Answer | Signal |
|---|---|---|
| Infrastructure real? | Yes. $2T+ processed. | 🟢 |
| Revenue real? | Yes. $1.3B ann. verified. | 🟢 |
| Decentralization adequate? | Not yet. Trajectory exists. | 🟡 |
| Insurance adequate? | Marginal. ADL working. | 🟡 |
| Team aligned? | Nov unlock suggests yes. | 🟢 |
| Valuation justified? | At MCap, yes. FDV is rich. | 🟡 |
Closing
The data says both stories are partially true. The infrastructure works. The revenue is real. The dominance is undeniable. The risks are genuine but quantifiable.
The market is betting on one of four outcomes: (1) Competition destroys share, (2) Regulators shut it down, (3) Insurance catastrophe, or (4) Team dumps on retail.
If you believe any >50% likely → overpriced.
If you believe they navigate with 60%+ share → asymmetric upside.
The November unlock was the first real test. 77% of tokens were held or restaked. The team is betting on HYPE alongside you.
The asymmetry case: Downside is known and quantifiable (~$8-15). Upside is open-ended ($55-80+ if execution continues). Risk/reward favors position sizing, not binary bets.
Position Accordingly.
Sources
| Category | Source |
|---|---|
| Price / Market Data | CoinGecko, CoinMarketCap, Coinglass |
| Revenue / Fees | DefiLlama (Hyperliquid Combined) |
| TVL | DefiLlama, CoinGecko |
| Validator Data | OAK Research, CryptoBriefing, Hyperliquid Wiki |
| JELLY Incident | OAK Research, Halborn Security, Arkham Intel |
| Supply Distribution | Tokenomist, DropsTab, CoinGecko |
| Buyback Data | DWF Ventures, OKX Research, CoinGecko |
| Unlock Analysis | CryptoRank, Bitcoin/Ethereum News |
| Hyperliquid Strategies | SEC S-1, Nasdaq, GlobeNewswire |
| Team Background | IQ Wiki, DataWallet, PANews |
| Competitive Analysis | NFTEvening, OKX Research, 21Shares |
| HyperEVM | Nansen, deBridge, Galaxy Digital |
Disclaimer
This report is for educational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk including total loss of principal. All probabilities stated are subjective estimates, not model outputs. Analysis reflects data as of December 6, 2025.
Disclosure: Pierce & Pierce Research does not currently hold HYPE tokens. This disclosure will be updated if positions change.
Pierce & Pierce Research | Signal vs. Noise | December 2025
Appendix: Data Reconciliation Notes
Our cross-checks across data providers showed some discrepancies. Here’s how we reconciled them:
| Metric | CoinGecko | Coinglass | Used |
|---|---|---|---|
| Market Cap | $8.3B | $10.36B | $8.3B (CoinGecko official) |
| Circulating Supply | 270.8M | 336.68M | 270.8M (CoinGecko official) |
| Open Interest | N/A | $1.47B | $6.30B (CoinGecko Dec 5) |
| Price | $30.69 | $30.65 | $30.69 |
| TVL | $4.74B | N/A | $4.34B (CoinGecko Dec 5) |
Circulating vs Outstanding: CoinGecko reports 270.8M circulating (27% of total) vs 611M outstanding (~61% of total). The difference reflects tokens that are unlocked but held by foundation/treasury. We use the narrower “circulating” figure for market cap calculations.
TVL Definition: TVL figures vary depending on whether you include HyperEVM ecosystem TVL or only the core perps protocol. We default to CoinGecko’s narrower definition ($4.34B) in At a Glance and note the ~$5B ecosystem figure separately.
OI Discrepancy: The OI variance likely reflects different methodologies — Coinglass tracks CEX OI on HYPE pairs while CoinGecko tracks protocol-level OI. We use CoinGecko’s protocol metrics for consistency.
