Provide an answer to the question "Is HYPE really expensive?"

Written by: Lawrence Lee

1. Introduction

Hyperliquid can be considered the biggest highlight in the recent crypto market aside from AI and Memes. Its strategy of not accepting VC investments, allocating 70% of tokens to the community, and returning all revenue to platform users has attracted market attention. The strategy of using its revenue to repurchase HYPE has rapidly pushed HYPE's circulating market cap beyond UNI, placing it among the top 25 cryptocurrencies, while also causing its platform business data to soar across the board.

This article aims to describe the current state of Hyperliquid's development, analyze its economic model, and evaluate the current valuation of HYPE, providing an answer to the question "Is HYPE really expensive?"

This article reflects the author's thoughts as of the publication date and may change in the future. The views expressed are highly subjective and may contain errors in facts, data, or reasoning logic. Criticism and further discussion from peers and readers are welcome, but this article does not constitute any investment advice.

A significant portion of this article references the Hyperliquid research report published by ASXN in September, which is the most comprehensive and in-depth Hyperliquid report the author has read. Readers interested in more details about Hyperliquid's mechanisms can refer to this report.

The following is the main text.

2. Overview of Hyperliquid's Business

Hyperliquid's current business mainly consists of two parts: derivatives exchange and spot exchange. They also plan to launch a universal EVM—HyperEVM—in the future.

Hyperliquid Architecture Source: ASXN

2.1 Derivatives Exchange

The derivatives exchange is the first product launched by Hyperliquid and serves as its flagship product, occupying a core position in its entire product ecosystem.

In terms of the core product mechanism for derivatives, Hyperliquid has not adopted other innovative product logic (like GMX, SNX, etc.) due to on-chain performance bottlenecks, but has instead chosen the Central Limit Order Book (CLOB) mechanism, which is the most widely used by various exchanges globally and is familiar to all trading users and market makers, while focusing on performance.

Their decentralized derivatives exchange operates on Hyperliquid L1, which is a PoS chain composed of a consensus layer HyperBFT and an execution layer RustVM.

HyperBFT is a consensus algorithm modified by the Hyperliquid team based on LibraBFT developed by Meta's previous blockchain team, capable of supporting up to 2 million TPS. With strong performance support at the underlying level, Hyperliquid has put core components of derivatives exchanges, such as order books and clearinghouses, on-chain, ultimately forming its decentralized derivatives exchange architecture.

For end users, Hyperliquid's experience is almost identical to centralized exchanges like Binance, not only in terms of trading experience and product structure but also in trading fees and discount rules. The only difference from centralized exchanges is that Hyperliquid does not require KYC.

Hyperliquid's Fee Structure

In addition to trading products, Hyperliquid has provided Vault functionality since the initial establishment of the product. The Vault is similar to "copy trading" in centralized exchanges, where anyone can invest funds into any Vault, managed by a Vault manager who invests the funds. 10% of the profits will be allocated to the Vault manager, and to maintain aligned interests, the manager must hold at least 5% of the Vault's shares.

Source: Hyperliquid Official Website

However, based on the current TVL, 95% of the TVL is in the official Vault HLP.

Unlike general Vaults, HLP, being the official Vault, effectively acts as a counterparty for many trades on the platform, allowing HLP to earn a portion of various platform fees (trading fees, funding fees, clearing fees). From this perspective, HLP is somewhat similar to GMX's GLP, with the distinction that GLP acts as a counterparty for all trades on the platform with a passive and public strategy, while HLP's strategy is non-public, meaning the counterparty for user trades could be HLP or other users, and HLP's strategy can be adjusted at any time.

Since its launch in July 2023, HLP has almost always maintained a net short position, providing liquidity for retail trading and remaining profitable with a net short position during a long-term bull market. Currently, the TVL is $350 million, with a PNL of $50 million. From the overall PNL curve of HLP and the PNL of three strategy addresses, the Hyperliquid team is using fees to maintain a relatively positive APR for HLP.

Source: Hyperliquid Official Website

In terms of trading volume and open interest, Hyperliquid has developed rapidly, especially in the last two months. With the $HYPE airdrop and continuous price increases, various platform data peaked between December 17-20.

Hyperliquid's trading volume, open interest, and number of traders since 2024 Source: Hyperliquid Official Website

In the decentralized derivatives market, Hyperliquid has held a leading position since June of this year, and the gap between Hyperliquid and other decentralized derivatives exchanges has further widened in the last two months, now reaching an order of magnitude difference.

Decentralized Derivatives Exchange Trading Volume Share Source: Dune

Decentralized Derivatives Exchanges 7-Day Trading Volume Ranking Source: DeFiLlama

In terms of valuation and trading volume, Hyperliquid is currently more comparable to centralized exchanges.

Screenshot Time: December 28, 2024 Source: Coingecko

Hyperliquid's recent data has shown a significant decline (with a peak single-day trading volume of $10.4 billion, and recent daily trading volumes below $5 billion), but its open interest still accounts for 10% of Binance's, and its trading volume is about 6% of Binance's; open interest and trading volume are roughly at the 15% level of Bitget and Bybit. At its peak (December 17-20), Hyperliquid's open interest reached 12% of Binance's, and trading volume reached 9% of Binance's; both open interest and trading volume data were close to 20% of Bybit and Bitget.

Overall, Hyperliquid's derivatives exchange is developing rapidly, having established a relatively solid leading advantage in the decentralized derivatives exchange field, and the gap compared to leading centralized exchanges has narrowed to within 10 times.

2.2 Spot Exchange

Hyperliquid's spot exchange also adopts an order book model, consistent with the product architecture and fee standards of the derivatives exchange.

Currently, Hyperliquid's spot exchange only lists native assets that meet the HIP-1 standard and does not list tokens from other chains.

Currently, Hyperliquid's top market cap spot tokens

HIP-1 (Decentralized Token Listing)

HIP-1 is similar to ERC-20 or SPL-20 and is the token standard for the Hyperliquid network. However, unlike ERC-20 and SPL-20, the cost of creating a HIP-1 token is quite high, as the successful creation of a HIP-1 token also means eligibility for listing on Hyperliquid's spot exchange.

The HIP-1 tokens of Hyperliquid are publicly conducted through a Dutch auction, specifically:

Anyone can participate in the auction, with the initial price set at twice the last auction's closing price, and it will linearly decrease to 10,000 USDC over 31 hours (this value is adjustable, previously lower, recently adjusted to 10,000 USDC). The first developer to successfully bid will obtain a qualification to create a TICKER, which can be listed on Hyperliquid's spot exchange, with the auction amount paid in USDC.

Recent auctions and closing prices:

Source: ASXN

Notable created Tickers include (in descending order of auction amount):

• GOD: A game invested in by Pantera

• CREAM: The well-established lending project Cream, troubled by hackers, associated with Machibigbrother

• ANIME: The token ticker for Azuki, rumored to have been acquired by the AZUKI team, but not yet officially confirmed

• MON: Issuer of the game Pixelmoon

• SWELL: A staking & re-staking protocol in the Ethereum ecosystem

• RIFT: A gaming protocol based on Virtual by J3ff

• GAME: Rumored to be based on Virtual, but not yet officially confirmed

• ANZ: A stablecoin protocol on the base chain

• SOVRN: Formerly BreederDAO (a gaming asset platform invested by a16z and Delphi in the previous cycle), will soon launch a game on Hyperliquid

• FARM: Hyperliquid's native AI pet game, launched through the Hyperfun platform

• ETHC: A mining project associated with Machibigbrother

• SOLV: A Bitcoin ecosystem staking protocol, backed by BN labs, currently has not issued tokens.

SOLV can be seen as a dividing line for HIP-1 auctions, which previously focused on meme and domain logic, with tickers often having symbolic significance, and the hype centered around uniqueness within the ecosystem.

After SOLV, most projects are competing for ecological positions and listing qualifications, with prices gradually increasing, the highest being GOD, which auctioned for nearly 1 million dollars. The projects are primarily focused on entertainment, with games and NFTs making up the majority, but there are also DeFi projects like Solv, Swell, and Cream.

Additionally, as an exchange, Hyperliquid's recent spot "listing fee" has stabilized above 100,000 dollars, which is now quite close to the listing fees of some second-tier centralized exchanges.

Through HIP-1, Hyperliquid has established a public mechanism for "decentralized token listing," where the listing fees are determined by market participants, avoiding the listing issues faced by centralized exchanges. On the other hand, the collected listing fees will be used for HYPE repurchase and destruction, which is beneficial for HYPE's price performance and valuation metrics.

HIP-2 (Hyperliquid's AMM)

Since Hyperliquid's spot trading operates in an order book format, it is challenging to ensure liquidity for new tokens. Hyperliquid has proposed HIP-2 to address the initial liquidity issues for tokens created through HIP-1.

In simple terms, HIP-2 provides a set of automated market-making systems that allow developers to automatically market-make for tokens generated through HIP-1. The market-making logic involves linear market-making within a specified range, where developers set the upper and lower price limits for market-making, as well as the buy-sell boundary. The system automatically market-makes at every 0.3% price change within the range.

The following image shows an order book using HIP-2 and its parameter settings:

Since the launch of HIP-2, many newly created Hyperliquid ecosystem tokens have chosen to use this Hyperliquid AMM mechanism. Currently, the total USDC amount for HIP-2 has exceeded 25 million dollars.

Hyperliquid's average daily spot trading volume over the last 30 days is around 400 million dollars, ranking in the top ten among DEXs, comparable to the trading volumes of Curve, Lifinity, and Orca.

Source: DeFillama

2.3 HyperEVM

HyperEVM has not yet been launched. In Hyperliquid's official documentation, the current derivatives and spot exchanges running on RustVM are referred to as Hyperliquid L1, while HyperEVM is referred to as EVM. According to the definitions in its official documentation, HyperEVM is not an independent chain:

Hyperliquid L1 has a general EVM as part of the blockchain state. Importantly, HyperEVM is not a standalone chain but is secured by the same HyperBFT consensus mechanism as other parts of L1. This allows the EVM to interact directly with L1's native components, such as spot and perpetual order books.

The ASXN report describes Hyperliquid's architecture as follows:

Hyperliquid operates two execution layers (RustVM and HyperEVM) on a consensus layer (HyperBFT), with its core functions for contracts and spot trading hosted on RustVM, which will focus on these two core dApps, while other dApps will be hosted on HyperEVM.

Regarding HyperEVM, we know from the team's documentation that:

• Unlike RustVM, where Hyperliquid's current spot and exchange operate, HyperEVM is permissionless, meaning any developer can develop applications and issue assets (FT or NFT) on it.

• HyperEVM is interoperable with Hyperliquid's L1, such as L1's oracles being available for HyperEVM, and transfers of certain tokens can also be conducted between the two VMs (not all can be interchanged, as assets on L1 are "permitted," only including USDC and assets generated through HIP-1, while HyperEVM has many more assets).

• HyperEVM will use Hyperliquid's native token $HYPE as Gas, while Hyperliquid's current L1 does not require users to pay Gas.

The author has not previously seen a similar product architecture in the crypto world, and it remains unclear how typical cases of DeFi composability on the Ethereum network, such as "depositing ETH into Lido to obtain stETH, then depositing stETH into Aave to borrow USDC, and then using USDC to buy the meme token PEPE," will be implemented on HyperEVM and Hyperliquid L1 (this may define whether it is one chain or two). However, in the author's current understanding, the relationship between HyperEVM and Hyperliquid L1 may be more akin to that of "an L2 with certain interoperability and an L1," or the relationship between a centralized exchange and its exchange EVM chain (like Binance and BNB Chain or Coinbase and Base Chain).

Currently, the HyperEVM testnet is running normally, and many validators have begun participating in the HyperEVM testnet validation, including well-known names like Chorus One, Figment, B Harvest, Nansen, etc.

HyperEVM Testnet Validator Node List Source: ASXN

Since RustVM is not open to all developers, there are currently few applications developed based on Hyperliquid's RustVM, mostly trading auxiliary tools:

Such as the Telegram trading bot Hyperfun (token HFUN), the Telegram social trading bot pvp.trade, trading terminals tealstreet and Insilico, and the derivatives trading aggregator Ragetrade, among others.

HyperEVM, being open to all developers, has many projects planned for release on it. In addition to the previously mentioned projects that successfully obtained HIP-1 tokens, the following image and the Hypurr.co website list a considerable number of them.

The specific mechanisms of HyperEVM and its relationship with Hyperliquid L1 remain to be seen once it officially launches. Currently, the official timeline for HyperEVM's launch has not been provided.

Summary: Hyperliquid's overall business positioning is currently similar to that of leading trading groups, with its core business being trading + L1 operations, making it a direct competitor to major trading groups. Although the business model is consistent, what sets Hyperliquid apart from existing leading trading groups is its choice to build its trading business on-chain. Compared to centralized exchanges (CEX) that require permission and have opaque data, Hyperliquid's trading platform offers advantages such as permissionless access (no KYC), transparent and verifiable business data, better composability, and lower overall operational costs, which enables it to allocate more revenue and profits to its token HYPE.

3. Hyperliquid Team, Token Economic Model, and Valuation

3.1 Team

Hyperliquid has two co-founders, Jeff Yan and iliensinc, who are alumni of Harvard University. Before entering the crypto industry, Jeff worked at Google and Hudson River Trading. The Hyperliquid team is quite lean; according to ASXN's report from September, the team consists of 10 members, 5 of whom are engineers, which is particularly notable for a derivatives exchange with a daily trading volume exceeding 10 billion.

From the process of building the entire product by the Hyperliquid team, especially their commitment to self-funded R&D, building a high-performance chain to achieve a fully on-chain order book, and the highly innovative HIP-1, it is impressive that despite being a small team, they consistently solve problems based on first principles.

3.2 $HYPE Economic Model

The total supply of $HYPE is 1 billion tokens, officially released on November 29, 2024. Since there was no financing, there are no investor shares, and the specific distribution is as follows:

• 31.0% Genesis distribution, airdropped to early users of Hyperliquid based on their points, fully circulating.

• 38.888% for future emissions and community rewards

• 23.8% allocated to the team, locked for 1 year before starting to release, with most being released between 2027-2028, and some continuing to be released after 2028

• 6.0% Hyper Foundation

• 0.3% community grants

• 0.012% HIP-2

The overall distribution between the team and the community is in a 3:7 ratio. The current distribution of token holding addresses is as follows:

Excluding community addresses, team addresses, and foundation addresses, the address with the most tokens currently is the Assistance Fund (AF), which holds 1.16% of the total HYPE supply and 3.74% of the circulating supply.

Currently, the parts of the entire Hyperliquid ecosystem that involve fees consist of two parts: trading fees and HIP-1 auction fees. Trading fees include spot and contract trading commissions, contract funding fees, and contract liquidation fees. Since Hyperliquid L1 does not charge users gas fees and HyperEVM has not yet launched, Hyperliquid's current revenue does not include trading gas fees.

According to the team's documentation:

On most other protocols, the team or insiders are the main beneficiaries of fees. On Hyperliquid, fees are entirely directed to the community (HLP and the assistance fund). For security, the assistance fund holds a majority of its assets in HYPE, which is the most liquid native asset on the Hyperliquid L1.

In most other protocols, the team or insiders are the main beneficiaries of fees. In Hyperliquid, fees are entirely allocated to the community (HLP and the Assistance Fund). The Assistance Fund holds most of its assets in HYPE, as it is the most liquid native asset on Hyperliquid L1.

All fees are allocated to HLP and AF. However, the team has not explicitly disclosed the ratio of fees between HLP and AF.

Fortunately, the data on Hyperliquid L1 is publicly accessible. According to the logic inferred by @stevenyuntcap, as of early December, Hyperliquid has subsidized HLP with a total of 44 million dollars since its launch, while the initial AF used to purchase HYPE was 52 million dollars. This leads to the conclusion that Hyperliquid's cumulative revenue from its launch to early December is 96 million dollars, meaning the total revenue distribution between HLP and AF is 46%:54%. (Additionally, we can calculate that Hyperliquid's cumulative trading volume during this period is 428 billion dollars, which translates to an average contract fee rate of about 0.0225%).

Since the AF has repurchased all USDC for HYPE, we can simplify it to say that 46% of Hyperliquid's perpetual contract trading revenue during this period is allocated to the supply side (HLP holders), and 54% is used to repurchase $HYPE tokens.

Of course, in addition to perpetual contract trading fees, Hyperliquid will also have two additional sources of income that will benefit HYPE holders: auction fees from HIP-1 and a portion of USDC from spot trading commissions. Currently, both of these income sources are also fully directed to AF for HYPE repurchase (this also includes the HYPE portion of HYPE-USDC spot trading fees, which is currently being directly burned, with a cumulative burn of 110,000 HYPE tokens).

Currently, the AF's strategy remains to periodically purchase all accumulated USDC for HYPE, allowing us to simplify tracking Hyperliquid's profit situation and the intensity of HYPE repurchases based on AF's USDC inflow data. According to hyperdata.info, the AF has accumulated over 77 million dollars in USDC inflows, with more than 25 million dollars in the last month, averaging about 1 million dollars in HYPE repurchases daily.

On December 30, 2024, Hyperliquid officially launched the HYPE staking feature, with the current yield for HYPE staking being around 2.5%. This yield only includes fixed PoS consensus layer returns, with the yield consensus referencing the yield consensus of Ethereum's consensus layer (the yield is inversely proportional to the square of the amount of staked HYPE). Currently, in addition to the 300 million tokens held by the team and foundation, nearly 30 million user tokens are also participating in staking.

Looking ahead, there are still many potential adjustments to the economic model of HYPE, such as:

• Launch of HyperEVM,

• $HYPE used as gas for HyperEVM

• Distribution of execution layer revenue to HYPE stakers (currently, HYPE staking rewards only include fixed returns)

• Redistribution of fees to $HYPE holders

• Discount on $HYPE staking fees

3.3 Valuation

Next, we will explore two valuation frameworks for Hyperliquid. Before we begin, it is important to note:

• Hyperliquid's data is highly volatile—its market cap, TVL, revenue, user data, etc., have seen several-fold or even ten-fold increases over the past month, followed by a 50% retracement. The degree of fluctuation in its own metrics far exceeds what is shown in the valuation metrics listed below. The following valuation frameworks are more suitable for long-term valuation reference.

• The price of HYPE is currently Hyperliquid's most significant fundamental factor; the surge in various data is more a result of the rise in HYPE's price rather than "because Hyperliquid has such good data, it has such a price."

Framework 1: Comparison with BNB

Hyperliquid's main thesis is the "on-chain Binance" proposed by Messari:

This analogy is generally reasonable and may indeed serve as a good framework; Binance/BNB is likely the most suitable comparison for Hyperliquid/HYPE.

• Hyperliquid's core business is derivatives and spot exchanges, which aligns with Binance's main business;

• HyperEVM can be compared to BNBChain; although HyperEVM has not yet launched, based on the current design, both HYPE and BNB can be used as gas for EVM chains and can be staked for returns;

• Both HYPE and BNB can directly benefit from platform trading fees;

Next, we will compare Hyperliquid's structure in terms of derivatives exchanges, spot exchanges, and EVM with Binance.

• Derivatives Exchange:

As mentioned earlier, recent data on Hyperliquid's positions and trading volumes are around 10% of Binance's corresponding data, so we roughly estimate that in the derivatives exchange module, HYPE = 10% BNB.

• Spot Exchange:

Hyperliquid's average daily spot trading volume over the past thirty days is around 400 million dollars, while Binance's average daily spot trading volume is approximately 26 billion dollars after excluding the fee-free FDUSD trading pairs, leading to HYPE = 1.5% BNB.

• EVM:

Based on the logic above, we believe that the relationship between HyperEVM and Hyperliquid L1 is more similar to that between Binance Exchange and BNBChain.

Since HyperEVM has not yet launched, we cannot confirm how much TVL will migrate from RustVM to HyperEVM. However, from the product architecture and corresponding experience, the overall logic still relies on migrating existing users from the exchange. We list the data from Binance and Coinbase, and considering the market's enthusiastic sentiment towards HYPE, we assume that 10% of Exchange TVL will migrate to the chain (still optimistic, but most articles using TVL valuation currently assume that 100% of Hyperliquid TVL will migrate to HyperEVM). Based on this calculation, HYPE = 3% BNB.

• Economic Model

In addition, we need to consider the differences between the economic models of HYPE and BNB.

From the analysis of the HYPE economic model above, it can be seen that currently, HYPE converts 54% of the platform's gross profit and 100% of the net profit into repurchases or burns of HYPE.

Previously, BNB was repurchased using 20% of Binance Exchange's net profit according to the white paper. After the decoupling of repurchase and platform net profit in 2021, we have no way of knowing the proportion of net profit allocated to BNB. However, based on the trend of destruction data and Binance's market position during the same period, the proportion of net profit destruction has likely remained at a similar level.

From the perspective of the (to holders) economic model, HYPE significantly outperforms BNB.

BNB Historical Destruction Data

Additionally, it is worth mentioning that the proportion of Hyperliquid's revenue flowing to the HYPE token is currently 54%, and this value still has room for further increase. Due to mechanical reasons, HLP has held a large number of cryptocurrency short positions collateralized by USDC during the bull market since July 2023, where BTC has risen over 200%. Although HLP's strategy has been appropriate and has managed to maintain a break-even point, it still needs to pay an annualized APR of over 30% to retain funds within HLP.

HLP Historical Net Positions Source: Hyperliquid Official Website

In the future, as the market gradually peaks, the overall trend of crypto users as net longs in derivatives will not change. The probability of HLP's strategy returns increasing in a volatile or bear market will rise (we can see a similar trend from the historical returns of GMX's GLP and GNS's Vault). Hyperliquid may not need to allocate such a large proportion of its revenue as rent payments to HLP, and Hyperliquid's net profit margin is still expected to improve further.

Speaking of net profit margin, we cannot know the specific net profit margin of Binance. However, we can glean some insights into the operating costs of centralized exchanges from the reports of publicly listed companies like Coinbase.

Coinbase Quarterly Report Q3 2024

It can be seen that in 2023, Coinbase's operating expenses (R&D, management, sales expenses, and transfer fees) averaged over 600 million dollars per quarter, which is roughly equivalent to all of its revenue, resulting in a net profit margin close to 0. In 2024, as the market exploded, its net profit margin improved significantly, but it still fell short of 30%.

From the above numerical comparisons, we can clearly see Hyperliquid's net profit margin (economic model) advantages relative to centralized trading. We can also look at a specific event: the handling of listing issues to see this advantage in detail.

In centralized exchanges, there is usually a dedicated listing team responsible for tracking market trends and negotiating with various project teams to collect listing fees and/or project tokens. Centralized exchanges need to pay substantial salaries and commissions to the listing team, as well as salaries to the internal control team that monitors potential conflicts of interest during the listing process.

In contrast, Hyperliquid's listing process, HIP-1, as mentioned earlier, operates automatically based on pre-defined code, making the operational cost of new listings approach zero, allowing its income from "listing fees" to be fully allocated to HYPE holders.

In summary, as of the end of December 2024, we have the following comparisons:

• Derivatives Trading: HYPE = 10% BNB

• Spot Trading: HYPE = 1.5% BNB

• EVM (Estimated): HYPE = 3% BNB

• Economic Model: HYPE significantly outperforms BNB

• Circulating Market Cap: HYPE = 9% BNB

• Fully Circulating Market Cap: HYPE = 27% BNB

Derivatives trading is currently Hyperliquid's primary business and should carry a relatively high weight in valuation comparisons. In my opinion, while HYPE's current market cap cannot be considered cheap, it is also not overly expensive.

Framework 2: P/S

HYPE has a token repurchase and burn mechanism that directly affects the HYPE token, allowing for valuation using the P/S metric, as follows:

• Contract Trading Fees:

We estimate based on an average contract trading fee of 0.0225% and a profit distribution of 46:54 between HLP and AF.

In the past month, Hyperliquid's contract revenue = 154.7 billion dollars * 0.0225% = 34.8 million dollars, of which about 54% goes to AF for repurchasing HYPE, resulting in a repurchase amount of 18.79 million dollars, corresponding to an annualized net profit of 225.5 million dollars.

• HIP-1 Auction Fees:

In the past month, revenue was 6.1 million dollars, and with the 46:54 distribution ratio between HLP and AF, this portion corresponds to an annualized net profit of 39.5 million dollars.

• Spot Trading Fees:

Hyperliquid's spot trading fee structure is the same as that of contract trading, and the distribution of the USDC portion of the fees is also the same as that of contract trading, meaning profits are distributed between HLP and AF at a 46:54 ratio. The fees for other tokens in spot trading (for example, in HYPE-USDC trading, the HYPE buyer pays USDC fees, and the HYPE seller pays HYPE fees) are directly burned.

Therefore, we need to calculate the net profit from spot trading fees for HYPE in two parts:

• HYPE Portion: This can be directly queried through a block explorer. The TGE of the HYPE token was exactly 30 days ago, and the number of HYPE tokens burned is 110,490, corresponding to an annualized burn of 1,325,880 tokens, which at the current price is approximately 37 million dollars.

• USDC Portion: In the past 30 days, Hyperliquid's spot trading volume was 11.5 billion dollars, and the portion used for repurchasing HYPE in spot trading = 11.5 billion dollars * 0.0225 * 54% = 1.397 million dollars, corresponding to an annualized net profit of 16.77 million dollars.

Combining the above three fee components, we calculate the annualized amount allocated for repurchasing HYPE based on the most recent month’s data, resulting in a total of 318,770,000 dollars.

Based on the circulating market cap, HYPE's P/S is 29.4, and based on the fully circulating market cap, HYPE's P/S is 88.

We have listed some comparable crypto projects with certain similarities to Hyperliquid's circulating P/S metrics:

It can be seen that the P/S valuation of L1 is significantly higher than that of applications, while Hyperliquid's P/S valuation is significantly lower than that of comparable other L1s.

The above presents two frameworks for valuing HYPE. It is important to remind again that:

Hyperliquid's data is highly volatile—its market cap, TVL, revenue, user data, etc., have seen several-fold or even ten-fold increases over the past month, followed by a 50% retracement. The degree of fluctuation in its own metrics far exceeds what is shown in the valuation metrics listed below. The above valuation frameworks are more suitable for long-term valuation reference.

The price of HYPE is currently Hyperliquid's most significant fundamental factor; the surge in various data is more a result of the rise in HYPE's price rather than "because Hyperliquid has such good data, it has such a price."

4. Risks

Hyperliquid faces the following risks:

• Financial Risk: Currently, all of Hyperliquid's funds are stored in its bridge on the Arbitrum network. The security of this smart contract and the safety of the 3/4 team multi-signature managing all funds are crucial.

• Code Risk: This includes the current L1 risks and the risks associated with HyperEVM. Hyperliquid employs an innovative architecture and consensus, and its L1 is currently not open source, which reduces the likelihood of being attacked. However, as Hyperliquid's scale and influence grow, and with the launch of HyperEVM, the potential for attacks or code vulnerabilities will gradually increase.

• Oracle Risk: This is an inherent risk for all derivatives exchanges.

• Regulatory Risks: The loss of comparative advantage due to regulation. The lack of KYC is currently Hyperliquid's main comparative advantage over centralized exchanges. As Hyperliquid continues to grow, there may be regulatory requirements related to anti-money laundering and other regulations.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。