The next major TGE in the Hyperliquid ecosystem is most likely going to be HyperLend. The ticker is HPL (not LEND), and it is not live at the time we are writing this, so be careful for any scams.
While the points program is over so you can’t secure an airdrop in this anymore, we’ll still break down all you need to know for the next stages of this lending protocol.
HyperLend is a friendly-fork of AAVE deployed on HyperEVM. AAVE is the biggest and most battle-tested DeFi lending protocol. Being a friendly-fork means HyperLend shares some value with the AAVE holders and in exchange, AAVE shares latest security updates with HyperLend.
This alignment with AAVE is part of the reason they are the biggest lending protocol on HyperEVM, with roughly $500M market size.
What are the HPL tokenomics at genesis?
25% airdropped at genesis is generous compared to other ecosystems and relatively standard in the Hyperliquid ecosystem.
Important to note that investors receive 10% at TGE, and have a 4-month cliff with a 2-year linear unlock for the rest.
Core contributors have 1-year cliff and 2-year linear unlock.
This unlock at TGE is honestly more than we expected for investors.
What will the HPL utility be?
There’s only one bit of information here: staking-based borrowing discounts.
So, if you’re a big and regular borrower on the platform, you can stake HPL to lower your effective borrowing costs by getting partial interest repayment.
We’re not big fans of this.
You first have to be a big borrower to make it worth it
Interest repayment can be a nightmare for taxation in most jurisdictions.
This seems to be a utility targeted for big borrowers who already have the right backoffice to handle the extra headaches and who borrow enough regularly to make it worth their while.
We do expect to see more than this later on. Some kind of value accrual/buyback system is pretty much standard in the Hyperliquid ecosystem but at the time we are writing this, nothing’s been announced.
So, working with the info we have, the utility is not impressive for us.
What can the valuation at TGE be?
A comp with AAVE puts HPL at around $23M FDV.
Polymarket, although without huge liquidity, also thinks slightly above $20M FDV is the most likely scenario.
The only thing that can move this valuation up is a big value accrual mechanism announced before TGE.
Although history doesn’t repeat, it often rhymes and we think it won’t be announced before TGE.
One common theme in the Hyperliquid ecosystem is secret incentives and “just doing” rather than announcing so that paper hands sell and diamond hands are rewarded.
It happened with HYPE at TGE, because no buybacks were announced beforehand.
It also happened with KNTQ where for several weeks the token has zero utility, until details on governance and value accrual were announced.
The trajectory of the token was not for the lighthearted.
Bottom of $0.0348, top of $0.305… Plenty of swings in between.
HyperLend also had a secret points season after the official points program stopped updating on their frontend.
We think there’s a significant chance they follow the same path when it comes to utility and they only announce more a few weeks after TGE.
How many HPL tokens will you get per point?
There are 1,000,000,000 HPL tokens.
There were 300M points initially, with an additional 150M points in the “secret points season” for a total of 450M points.
As part of the friendly-fork deal with AAVE, HyperLend also supplies 3.5% of HPL to the AAVE DAO, and 1% of supply to stkAAVE holders.
The actual airdrop for points holders is effectively 20.5%.
So, you should expect roughly 0.4555 HPL per point. At ~$23M FDV, that’s ~$0.01 per point.
There might be a minimum allocation for the first point so this is just an estimate.
What are we planning to do with our airdrop?
It honestly still depends on everything announced pre-TGE and how HPL will trade at TGE.
We think the $20M FDV mark is pretty fair… If it trades under it, we’re likely to hold our allocation because we expect more utility and better valuation in the not-so-distant future.
If it trades at $40M+ FDV, we’re likely to sell all our allocation and reevaluate once more utility and value info comes out.
It’s extremely difficult for a token to outperform HYPE, so even if HPL trades at a “fair” valuation, we might prefer the future potential of HYPE and sell HPL to buy more HYPE.
This means we’re almost certainly never buying HPL with dry powder, and for us, it’s exclusively a decision on what to do with our airdrop, where we have a decent allocation already.
