Author: Michael Nadeau; Source: The DeFi Report; Compiler: BitpushNews

We believe that perpetual futures represent an important innovation that will ultimately lead to the evolution of the derivatives market structure—from fragmented, expiration-dated contracts to a continuous, funding rate-driven market.

This model is extremely suitable for trading macro assets (such as foreign exchange and interest rates, which are one of the largest markets in the world), because in these markets, traders are pursuing exposure rather than actual ownership. We also expect that real assets (RWAs) will first be put on-chain through perpetual futures, as this structure avoids many of the frictions associated with tokenization, custody, transfer agents, and corporate actions.

Hyperliquid, a perpetual futures decentralized exchange (DEX) and emerging L1 ecosystem, is built from first principles to bring these advantages on-chain.

This report will analyze the latest status of Hyperliquid's recent performance, including the construction progress of the HyperEVM Layer 1 blockchain. (The views expressed are the author’s own and should not be relied upon as investment advice.)

Let’s get started.

Perpetual contract DEX financial data

Fee income

- Cumulative handling fees in 365 days: US$915 million

- Cumulative handling fees in 90 days: US$230 million

- 30-day accumulated handling fees: US$57 million

Perpetual contract trading contributes approximately 97% of handling fees, while spot trading only accounts for 3%.

Key Points

Hyperliquid perpetual contract DEX’s fee income has declined, but the decline is much smaller than what we have seen with Solana and its head applications.

For example, in the fourth quarter, Hyperliquid achieved $270 million in fee income (a 16% decrease from the third quarter). During the same period, Solana's REV fell by 60%. So how did the top applications perform on Solana during the same period?

- Raydium: down 79%

- Jito: down 76%

- Axiom: down 61%

-Jupiter: down 37%

- Pump.Fun: down 19%

In an environment where risk aversion has increased and market interest in cryptocurrencies has plummeted, Hyperliquid's performance has been quite strong compared to other top public chains and applications. This is unique, especially for a high-flying app going through its first bear market.

Repurchase status

In the past year, Hyperliquid spent 93.3% of its handling fees on HYPE token repurchases, totaling US$854 million (average daily amount of US$2.3 million).

Key Points

If Hyperliquid can maintain its user base during a bear market, steady buying of the token may help offset any increased selling pressure, meaning its "cycle low" may be shallower than what we typically see from new projects in their first bear market.

More details about the token economic model and team unlocking will be elaborated in subsequent sections of the report.

Perpetual contract DEX fundamentals

Open Interest

Hyperliquid’s open interest is currently just under $10 billion, down from a peak of $15.8 billion last August.

Binance, the largest centralized perpetual contract exchange, currently has an open interest of US$29 billion, having reached a peak of US$44.5 billion in early October last year.

Compared to its decentralized competitors:

- Aster Open Interest = $2.5 billion

- Lighter Open Interest = $1.2 billion

- Drift Open Interest = $247 million

- Jupiter Open Interest = $181 million

Key Points

In just over a year, Hyperliquid has captured a significant share of the centralized perpetual exchange market (equivalent to 34% of Binance open interest and 54% of CME crypto futures open interest).

At the same time, its open interest is more than twice the size of its top four decentralized competitors combined.

Active address

At its peak, Hyperliquid Perpetual Contract DEX added approximately 2,600 new users every day. Over the past 30 days, that number has dropped to about 1,600 new users per day (a 38% drop).

The number of new addresses may not seem high, but it is consistent with our understanding of the unit economics of the crypto exchange market. A small group of highly active traders often contribute the majority of revenue. The key is to watch how this holds up in a bear market.

Perpetual contract trading volume

Over the past 30 days, Hyperliquid's futures average daily trading volume was $5.2 billion - a 47% drop from its peak of approximately $9.8 billion per day.

Interestingly, real assets (RWAs) currently drive the third-highest trading volume, behind BTC and Layer 1 tokens.

Key Points

The decline in futures trading volume (relative to fee revenue) was larger, indicating that clearing fees may have filled part of the gap. For reference, the DEX processed over $90 billion in liquidations on October 10 last year, generating over $10 million in fees (almost 2x Hyperliquid’s revenue on its second profitable day).

Spot trading volume

At its peak, Hyperliquid’s spot daily trading volume was approximately $820 million. Over the past 30 days, its average daily spot trading volume was $127 million (down 84%).

In the past 365 days, spot trading volume accounted for approximately 3% of Hyperliquid’s total handling fees.

Cross-chain bridging value

There is currently more than $4.1 billion in value locked on Hyperliquid DEX. That's down from a peak of $6 billion last September.

For reference, Solana's TVL is currently $8.7 billion.

Since launch, a cumulative $318 billion in value has been deposited for trading, of which $314 billion has been withdrawn.

HyperEVM fundamentals

Hyperliquid is unique in that it started as a perpetual contract DEX, but it is also a Layer 1 blockchain. In this section, we provide an update on HyperEVM as it takes shape but is still evolving.

REV (Revenue)

Since launch (last February), HyperEVM has generated $8.9 million in REV. Over the past 30 days, its daily average REV was only $11,700, down from the peak of $66,000 per day. On October 10 last year, the agreement generated $450,000 in fees.

In terms of TVL, Hyperliquid L1 currently guarantees a value of just under $12 billion. Among them, the liquidity pledge agreement Kinetiq has more than 500 million US dollars; the lending agreement Morpho has more than 300 million US dollars; the lending agreement HyperLend has more than 240 million US dollars.

Active address

In the past 30 days, the L1 has an average of approximately 12,000 independent active addresses per day. This is lower than the peak level of about 20,000 per day in September/October last year.

DEX trading volume

In terms of DEX trading volume, the L1’s average daily trading volume over the past 30 days was $62 million – minuscule compared to Ethereum and Solana.

Stablecoin supply

As of January 21, 2026, there are more than $674 million in stablecoins on Hyperliquid L1. The recent growth can be attributed to Circle (USDC) deploying on Hyperliquid and capturing 50% of the market share. Tether accounts for 21% of the stablecoins on Hyperliquid, Paxos accounts for 12%, and Ethena accounts for 11%.

Token Economic Model

This section covers the HYPE token - which represents interests in the Hyperliquid perpetual contract DEX and L1.

- Maximum supply: 1,000,000,000

- Released supply: 395,494,480

- Core contributors: 22.3M

- Hyper Foundation: 60M

- Genesis airdrop distribution: 310M

- HIP-2：120K

- Community: 3M

Token Allocation

- Genesis Airdrop: 31%

- Future release and community rewards: 38.88%

- Core contributors: 23.8% (unlocked starting in November 2025 and continuing until November 2027)

- Hyper Foundation budget: 6%

- Community Grant: 0.3%

- HIP-2 (Hyperliquidity): 0.012%

Token Unlocked

Team tokens began to be unlocked in November last year. From now until November 2027, the agreement will release 9,916,666 HYPE tokens to the team every month (valued at $213 million per month at the current HYPE price).

Hyperliquid is not venture capital backed, so there are no investors to unlock.

Repurchase

In the past 30 days, the average daily repurchase amount was US$1.7 million (average daily 79,000 HYPE). At this rate, approximately 2.3 million HYPE are removed from circulation each month, or 28 million HYPE per year.

Key Points

Hyperliquid’s repurchase program has provided solid buying support for the token, but the team’s monthly unlock volume is currently more than 4 times the repurchase amount. Of course, if user activity drops, repurchases will decrease accordingly.

See below for more analysis on "repurchase yield".

Relative performance

HYPE is up 71% relative to BTC since launch. From April to September last year, its performance outperformed BTC by 278%.

However, HYPE has lagged BTC by 52% since its peak in September last year.

For reference, ETH fell by 21% relative to BTC during the same period, and SOL fell by 47% relative to BTC.

Valuation Analysis

HYPE's current fully diluted valuation is $20.5 billion. Its 365-day fee income was US$915 million. That means its fully diluted price-to-sales (P/S) ratio is 22.4x (down from 66x in August).

In terms of price-to-sales ratio calculated by float market capitalization, it is 7.1 times (down from 21.9 times in August). This is currently lower than what we typically see in high-growth tech/fintech companies (8-16x).

Repurchase Yield

Due to Hyperliquid's buyback mechanism, this analysis differs from traditional tech/fintech companies - as the revenue it receives is not hoarded by the company (and has a fiduciary responsibility to investors), but is used to buy back HYPE tokens.

- Total 365-day buyback = $854 million.

- Circulation market capitalization = US$6.5 billion.

- The current implied "repurchase yield" is 13.1%.

This means that Hyperliquid has bought back tokens equivalent to 13% of its market capitalization in the past 365 days.

However, this does not take into account new token issuance/unlocking - which currently exceeds buybacks by more than 4x per month.

Conclusion

We believe that perpetual futures are likely to become the mainstream abstract form for users to trade macro financial assets, especially foreign exchange and interest rates. Additionally, listing and trading RWA derivatives is much easier than trading tokenized stocks/bonds themselves (tokenized assets require custody, transfer agents, corporate actions, dividends, etc. - perpetual contracts avoid all of this).

The key risk right now is regulation and whether Hyperliquid/decentralized solutions can be included in the US Crypto Market Structure Act. Our view is that Hyperliquid itself may not be directly regulated, but its consumer-facing interface will be.

Nonetheless, Hyperliquid is succeeding. We believe there are five main reasons:

1. An excellent product with a user experience comparable to CEX while allowing users to self-host.

2. The best narrative since BTC and ETH: 31% of tokens were airdropped to early users, creating a huge wealth effect and a loyal community.

3. Excellent token economic model, highly consistent with the interests of users and token holders.

4. The founding team has strong technical strength and clear goals.

5. In the early days, it was connected to mainstream wallets such as Phantom and applications such as Axiom. Today, Hyperliquid is gradually becoming the default "perpetual contract trading" infrastructure in the entire crypto field, allowing users to trade through a friendly front-end interface while utilizing Hyperliquid's liquidity on the back-end.