A quick look at the new Hyperliquid: Standing out from Layer 1 and DEX, what is the expected market value?

Bitget App

Trade smarter

西格玛学长2024/12/20 11:04

By:西格玛学长

I. Project introduction

Hyperliquid is a high-performance Layer 1 blockchain designed to support open financial systems, dedicated to providing users with a seamless decentralized application experience. Its vision is to create a fully on-chain open financial system that allows users to create applications that interact with underlying efficient native components without sacrificing the end-user experience. Hyperliquid's L1 has sufficient performance to support an ecosystem of permissionless financial applications, where transactions, cancellations, transaction execution, and clearing can be transparently performed with less than 1 second of block latency.

Hyperliquid adopts a custom consensus algorithm HyperBFT, inspired by the Hotstuff protocol and its subsequent versions. The design of this algorithm and network protocol stack is optimized from scratch to support the efficiency and scalability of this L1 blockchain. Hyperliquid's ecosystem includes multiple key applications, among which the flagship product is a fully on-chain order book perpetual contract exchange - Hyperliquid DEX.

Hyperliquid's L1 architecture is built around an efficient derivatives exchange (perpetual contract exchange), which is its core native application. The perpetual contract exchange not only meets the high infrastructure requirements of real-world applications, but also becomes one of the most valuable areas in DeFi. Through this exchange, Hyperliquid not only attracts a large number of real users to interact with the infrastructure, but also promotes the continuous progress of its blockchain in terms of performance and optimization.

A quick look at the new Hyperliquid: Standing out from Layer 1 and DEX, what is the expected market value? image 0

II. Project highlights

1. Ultra-high performance and low latency

Hyperliquid's L1 blockchain is specially optimized to support high-throughput financial applications. Its design allows for processing up to 100,000 orders per second, and transactions, cancellations, executions, and settlements are transparently conducted with less than 1 second block latency. This gives Hyperliquid leading performance in decentralized trading platforms (DEX), ensuring that users' trading experience is close to the smoothness of centralized exchanges while maintaining the advantages of decentralization.

2. Unique HyperBFT consensus algorithm

The HyperBFT consensus algorithm used by Hyperliquid is developed based on the Hotstuff protocol and is specifically optimized to meet the needs of high-performance financial applications. Compared with other common consensus algorithms, HyperBFT can more effectively handle large amounts of financial transactions and data with low latency and high throughput support. This highly customized consensus mechanism provides Hyperliquid with a more stable and efficient network environment, ensuring data consistency and security during the transaction process.

3. Fully on-chain order book perpetual contract exchange

Hyperliquid's flagship application is a decentralized order book perpetual contract exchange, where all orders, cancellations, trade execution, and clearing operations are conducted on the chain. This means that every transaction has complete transparency and immutability, and users can view the status of each transaction in real-time, enhancing the platform's credibility and security. In addition, as one of the most valuable DeFi markets, perpetual contracts can not only attract a large number of customer engagements, but also promote the development and prosperity of the entire Hyperliquid ecosystem.

4. Infrastructure designed specifically for the derivatives market

Hyperliquid's L1 blockchain is designed around efficient derivatives exchanges (perpetual contract exchanges), which enables it to support complex financial products. Derivatives markets typically have extremely high infrastructure requirements, especially for transaction speed and processing power. Hyperliquid's design ensures that it can handle these high-demand application scenarios, while its decentralized nature makes the platform more resistant to censorship and open.

III. Market value expectations

As the native token of Hyperliquid, HYPE is the core token of its ecosystem. Currently, the unit price of HYPE is $24.71, the circulating market value is about $8.274 billion, the fully diluted market value is $24.71 billion, the circulating amount is 333,928,180, and the total supply is 999,990,391.

To evaluate the market potential of HYPE, we selected the following benchmark projects for comparison: Sui ($SUI), Solana ($SOL), and dYdX ($DYDX).

Benchmarking project

Layer 1 blockchain: Sui ($SUI)

Unit price: $4.36

Market capitalization: 12.731 billion USD

Fully diluted market cap: $43.60 billion

Circulation: 2,927,660,018 pieces

Total supply: 10,000,000,000 pieces

2. High-performance underlying blockchain: Solana ($SOL)

Unit price: 208 USD

Market capitalization: 99.596 billion USD

Fully diluted market cap: $122.8 billion

Circulation: 479,176,521 pieces

Total supply: 590,377,685 pieces

3. Decentralized exchange: dYdX ($DYDX)

Unit price: $1.68

Market capitalization: 1.189 billion USD

Fully diluted market cap: $1.194 billion

Circulation: 711,004,555 pieces

Total supply: 1,000,000,000 pieces

Market value comparison with expectations

1. Benchmarking Sui ($SUI)

If the circulating market value of HYPE reaches a level equivalent to Sui (12.731 billion USD), the unit price of HYPE will rise to about 38.13 USD, an increase of about 54%.

2. Benchmarking Solana ($SOL)

If the circulating market value of HYPE reaches the level of Solana (99.596 billion dollars), the unit price of HYPE will rise to about 298.11 dollars, an increase of about 1107%.

3. Benchmarking dYdX ($DYDX)

If the circulating market value of HYPE drops to the level of dYdX (1.189 billion USD), the unit price of HYPE will fall to about 3.56 USD, a decrease of about 86%.

IV. Token Economics

The total supply of HYPE is 1 billion pieces:

- For future emissions and community incentives (38.888%):

About 38.9% of the tokens will be gradually released to incentivize community members, developers, and ecosystem partners.

- Genesis distribution (31.0%):

Genesis tokens explicitly exclude core contributors and do not distribute to private equity investors, centralized exchanges, or market makers.

Core contributor allocation (23.8%):

Allocated to current and future core contributors, all tokens will be locked for one year and gradually unlocked. Most ownership will be completed between 2027-2028, and some distribution plans will continue until after 2028.

- Super Foundation budget (6.0%):

As a strategic funding for ecological expansion, it is mainly used to support technological innovation, marketing activities, and global cooperation, including joint development plans with local institutions and universities.

- Community grant (0.3%):

This small portion of the tokens will be used to fund innovative projects by community users, supporting small-scale experimental or incubation activities.

HIP-2 liquidity support (0.012%):

This part of the token is used to support the liquidity needs of the on-chain order book, helping Hyperliquid DEX respond quickly when market liquidity increases.

HYPE is the core gas token of HyperEVM, and its main functions include:

Pay Gas Fee: Users need to use HYPE to pay Gas fees when conducting transactions or deploying smart contracts on the Hyperliquid blockchain, supporting high-frequency and low-latency transaction operations.

On-chain governance: HYPE token holders will participate in Hyperliquid's on-chain governance, including voting on key protocol parameters and project development direction, to achieve true decentralized management.

Ecological incentives and community rewards: HYPE tokens serve as the core incentive tool for community and developer rewards, used to support development, project promotion, and long-term user participation within the ecosystem.

Liquidity provision and trading: HYPE can be used as the core token for on-chain liquidity, helping users support Hyperliquid DEX's order book transactions through native token standards (such as HIP-2) while obtaining commission income.

V. Team and financing

The core team of Hyperliquid has a hardcore background. Co-founder Jeff Yan is a graduate of Harvard University and worked at Hudson River Trading, a top global high-frequency trading company. He has accumulated rich experience in high-frequency trading and has a deep understanding of low-latency and high-throughput systems. This career experience became an important foundation for him to establish Hyperliquid and directly influenced the high-performance technical architecture design of the project.

In terms of financing, the team maintains a clear attitude: not accepting external investment. In a previous interview, Jeff stated that the team hopes to promote project development through independent funding rather than relying on external capital. This choice avoids capital intervention in project direction and also reflects the team's understanding and practice of decentralization.

VI. Risk Warning

1. Hyperliquid uses a custom HyperBFT consensus algorithm, which, although inspired by the Hotstuff protocol and its subsequent versions, is still a brand-new and not fully validated design. If the algorithm encounters bottlenecks in large-scale networks, it may lead to network latency, transaction failure, or forks. Since the consensus mechanism is tailor-made for Hyperliquid, if unknown technical challenges are encountered in practical applications, it may lead to a decrease in the availability and stability of the system.

2. As the core platform for decentralized exchanges (DEXs) and perpetual contract trading, Hyperliquid relies on smart contracts to automate transactions, clearing, and fund management. Smart contracts may have vulnerabilities in their design and deployment, which malicious attackers can exploit to steal funds or manipulate the market. For example, counterparty risk, vulnerabilities in clearing mechanisms, or Oracle issues can all become entry points for attacks.

VII. Official link

Website：https://hyperfoundation.org/

Twitter：https://x.com/HyperliquidX

Discord：https://discord.com/invite/hyperliquid

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.

APR up to 10%. Always on, always get airdrop.

Lock now!