In our “Trade[XYZ] is HIP-3” piece, we said we'd be watching the HYPE/KNTQ ratio to decide when to rotate our KNTQ into HYPE. We were waiting for two things: real buyback data, and clarity on how Markets would perform against Trade[XYZ].
We now have both. KIP-2 goes live on April 6th, and the competitive picture has only gotten more lopsided since our last article. Here's where we are.
Markets vs Trade[XYZ]
When we wrote the Trade[XYZ] piece, Markets OI had dropped to ~$11M. Today it's ~$14M. A modest recovery.
Trade[XYZ], meanwhile, sits at $2.14B OI and growing quickly, absolutely dominating HIP-3 still.
That's a 153:1 ratio. Markets is not catching up, and the winner-takes-all dynamic we flagged in our previous article has only intensified. This matters for KNTQ because Markets revenue is one of the token's value accrual pillars. And its daily revenue there is currently roughly $4,500/day.
HYPE buyback math
Current data (some are just close estimates and not with full context but directionally accurate for our purpose):
Circulating supply: 298,643,425 HYPE
Assistance Fund buyback & burn: ~$2M/day
Ticker auctions burned: ~$15k/day
HyperEVM gas burns: ~300 HYPE/day (~$10.4k/day)
Team unlocks: ~500k HYPE/month (midpoint estimate of 130k-1M range)
Staking emissions: 432.5M HYPE staked at 2.20% APY → ~26,068 HYPE/day
Daily | Monthly | Yearly | |
|---|---|---|---|
Gross burn (HYPE) | 58,202 | 1,746,060 | ~21.2M |
Gross inflation (HYPE) | 42,735 | 1,282,050 | ~15.6M |
Net deflation (HYPE) | 15,467 | 464,010 | ~5.64M |
Net deflation (USD) | $538k | $16.1M | $196.5M |
At $34.80/HYPE, market cap is ~$10.4B.
HYPE P/E (buybacks vs market cap): ~14.2x
For staked HYPE: 1.89% net deflationary yield + 2.20% staking APY = ~4.1% effective APY.
KNTQ buyback math
KIP-2 introduces a 10% flat fee on staking APY for HYPE staked through Kinetiq (19.19M HYPE). Combined with the other revenue streams (again, close estimates, but directionally correct and likely generous in favor of KNTQ):
Revenue source | Annual (USD) |
|---|---|
KIP-2 (70% of staking skim to buybacks) | ~$1.03M |
Markets (10% minimum to buybacks) | ~$164k |
Trading fee burns | ~$132k |
Validator commissions | Negligible |
Launch revenue | $0 currently |
Total | $1.325M |
At $0.098/KNTQ, market cap is ~$26.6M.
KNTQ P/E (buybacks vs market cap): ~20.1x
If we're generous and assume Markets dedicates 50% of revenue to buybacks instead of the 10% minimum, total annual buybacks rise to ~$2.0M and P/E improves to ~13.4x, just slightly better than HYPE.
The comparison between KNTQ and HYPE
HYPE | KNTQ (realistic) | KNTQ (optimistic) | |
|---|---|---|---|
Annual buybacks and burns | ~$730M | ~$1.3M | ~$2.0M |
Market cap | ~$10.4B | ~$26.6M | ~$26.6M |
P/E | ~14.2x | ~20.6x | ~13.4x |
Even in KNTQ's best-case P/E scenario, it only slightly edges HYPE. And that's before accounting for:
610M tokens in future emissions (~226% of current circulating supply), split between remaining points rewards and team/investor unlocks starting December 2026.
Narrow revenue base with KNTQ's value accrual coming almost entirely a derivative of HYPE staking yield, while HYPE captures fees from every trade on the platform.
Trade[XYZ] dominance capping the Markets growth story that was supposed to be a key KNTQ revenue driver.
KNTQ buybacks are yield distributed to stakers, and not actually burned from supply, which still leaves more potential sell pressure in the market. This weakens the P/E comparison even more, since they’re not equivalent mechanisms.
Risks and platform dependency, where if HYPE fails, KNTQ fails too. But if KNTQ fails, HYPE has other avenues to succeed.
What we’re doing
We have our estimates here already, and we can quickly recalculate if needed. We’re most likely going to wait until 6th April to see KIP-2 go live and see the actual buybacks picking up onchain based on the KIP-2 commission.
We assume that the overall view won’t change much, but we think the extra buy pressure could create better temporary conditions to rotate from KNTQ to HYPE. Well, more specifically, into kHYPE, just like we did with our kmHYPE.
And that kHYPE still will get us some kPoints for S2 and KNTQ in the future airdrop, which will have another decision point later on.
Why didn’t we do this earlier? Well, without full data on buybacks, it was still speculation. Plus, an important factor was the amount of kPoints received weekly, which significantly decreased since the launch of Markets.
At that point, Markets’ success was the key decision point, and we see that as much more capped now than before, even though still slowly in a positive direction.
Still, we want Kinetiq to succeed and grow, of course. We want just about every project in the Hyperliquid ecosystem to succeed, but we still have to take a step back and look at the data to make our capital allocation decisions.
