Hyperliquid is a proof-of-stake (PoS) blockchain built with the vision of a fully onchain open financial system. It is a Layer 1 blockchain (L1) that uses a custom consensus algorithm called HyperBFT.

There are two broad components: HyperCore and the HyperEVM.

HyperCore includes fully onchain perpetual futures and spot orderbooks, where every order, cancel, trade, and liquidation happens transparently with one-block finality. It supports ~200k orders/second, with improvements still in development.

HyperEVM brings familiar general-purpose smart contracts to Hyperliquid. This allows for financial primitives of HyperCore to be available as permissionless building blocks for users and builders.

Just as important as the tech is the culture of the ecosystem, starting with the core team.

Hyperliquid did not take any outside funding for the project, everything was self-funded by the team. There are no special deals and no advanced notices for anything that’s released.

This generally creates an egalitarian ecosystem as realistically possible.

It’s also a culture choice as much as it’s a tech choice that everything is transparently on-chain.

This culture is what creates some of the most interesting capital allocation opportunities that we’ll explain below… But first, let’s look at the native gas token of the blockchain: HYPE.

In technical terms, it’s the native gas token of the Hyperliquid blockchain.

Trading is gasless, so you’ll be left asking “What do you have to pay gas for?”.

HyperEVM transactions use gas in HYPE.

You also have gas Dutch auctions for deploying spot ticker, spot trading pair, and spot HIP-3 ticker (more on HIP-3 in another article).

Staking HYPE is also required for deploying HIP-3 DEXes, for deploying a quote asset, and for becoming an aligned quote asset. We will tackle this another time, but you can also check out the official documentation to get an initial idea.

As the native token, it’s also what users stake with the validators who secure the network.

Lastly, holding HYPE also allows you to participate in governance by delegating your stake to a validator who votes on proposals you agree with.

HYPE token generation event (TGE) was on 29th November 2024, with a max supply of 1,000,000,000. The planned distribution was:

Out of the 31% genesis distribution, approximately 3% were not claimed and reallocated to future emissions and community rewards.

The core contributor tokens were locked for 1 year after genesis, and most vesting schedules will complete between 2027-2028 but some will continue after 2028.

It’s also important to note that this includes future core contributors too, so not all 23.8% will be linearly unlocked and distributed.

Using this misconception, many data websites assume ~10M HYPE/month are unlocked for the team, when in practice, it was 1.75M in November 2025, 1.2M in January 2026, and 140k in February 2026.

The most important part after this explanation? HYPE is where all the economic value of the blockchain flows into.

Trading fees on Hyperliquid are paid in a stablecoin, the only exception is when you buy a spot token in the orderbook, then the fee is paid in the spot token.

This means that Hyperliquid gathers a rather hefty amount of stablecoins, especially USDC.

The protocol uses 99% of these fees to buy back and burn HYPE using the Assistance Fund. You can see this happening in real-time onchain here.

Since TGE, this has burned over 4% of the total supply, or over 40,000,000 HYPE.

This is by far the biggest value accrual mechanism in the ecosystem, given that fees are annualized to ~$1B and likely to increase.

There is more…

All spot fees in HYPE are burned.

All gas fees on the HyperEVM, including priority fees, are burned.

All gas fees for auctions are burned.

And there’s more aside from burns…

HYPE must be staked and locked to deploy quote assets, HIP-3 markets, and likely more in the future.

To deploy a HIP-3 market, a builder must stake at least 500,000 HYPE. Most such builders deploy more, but only the minimum required of 500,000 is locked. Currently, there are 7 such builders so 3,500,000 are locked away.

In short, HYPE has perpetual demand from the fees and, as long as activity increases, it also has evergrowing supply sinks through utility in the Hyperliquid ecosystem.

It’s one of the most efficient and most powerful ways to benefit from the economic activity in a project, ever.

It’s the core of what makes us so bullish on Hyperliquid and HYPE.

There’s no gain without some risk here, so we want to share our take on this, too.

The most important risk is regulatory risk.

Hyperliquid is a blockchain that facilitates financial activity. Most frontends to use Hyperliquid block certain jurisdictions, including the US.

Risks exist around how certain laws will treat Hyperliquid, both in the US and in other jurisdictions.

What shows us the team is aware of this risk and working on this exact topic is their legal representation by J. Christopher Giancarlo, former Commissioner of the CFTC.

While less relevant now, there’s an Arbitrum bridge (read about crypto bridges here) where the all of the USDC was deposited before native USDC was deployed on Hyperliquid. This bridge is still a risk, although there have not been any public issues so far.

It’s also in the process of being deprecated, with the challenge being moving almost $4B USDC out of it.

Lastly, decentralization is a multi-year process, and it comes with pros and cons, including some “growing pains.”

There are two layers to it:

Neither is a huge issue as long as the progress we’ve seen from TGE until now continues on all these risk factors.

Dashboard for all Hyperliquid activity provided by ASXN.

Hypurrscan, a dashboard showing tons of real-time information such as auctions, fees, trades being executed, and more.

hypeburn.fun is another great website to check HYPE supply, burns, and more.

The official Hyperliquid documentation.