By: Alex Xu, Research Partner, Mint Ventures & Lawrence Lee, Research Fellow, Mint Ventures
In the first and second parts of the previously published article (Gold Mining in the Sand: Finding Long-term Investment Targets to Cross Bull and Bear Markets (2025 Edition)), we sorted out and introduced Aave, Morpho, Kamino, MakerDao in the lending track, Lido and Jito in the staking track, and Cow Protocol, Uniswap and Jupiter in the trading track. This article, as the last in the series, will continue to introduce projects with high-quality fundamentals and long-term potential.
PS: This article is the interim thinking of the two authors as of the time of publication. It may change in the future, and the views are highly subjective. There may also be errors in facts, data, and reasoning logic.
All views in this article are not investment advice. We welcome criticism and further discussion from colleagues and readers.
4. Crypto asset services: Metaplex
Business Status
Business Scope
The Metaplex protocol is a digital asset creation, sales, and management system built on Solana and SVM-enabled blockchains, which provides developers, creators, and businesses with tools and standards for building decentralized applications. The types of crypto assets supported by Metaplex include NFT, FT (homogeneous tokens), real-world assets (RWA), game assets, DePIN assets, etc.
In terms of crypto asset services, the services provided by Metaplex can be divided into two categories: asset standards (Digital Asset Standard) and asset issuance, sales, and management (Program Library). The former provides asset issuers with token issuance standards with high compatibility in the SVM ecosystem and low creation and management costs, while the latter is a series of tools and services for asset issuers to create, sell, and manage their own assets.
Most of the NFT and FT asset issuers issued on Solana are users of Metaplex.
In the past six months, Metaplex has also expanded its business horizontally to other basic service areas of the Solana ecosystem through its new business line Aura Network, such as digital asset indexing (Index) and data availability (DA) services.
Metaplex's product and service matrix, source: developer documentation
In the long run, Metaplex is committed to becoming one of the most important multi-field basic service projects in the Solana ecosystem.
In addition to Solana, Metaplex is currently also providing services on Sonic and Eclipse.
Profit Model
Metaplex's business model is relatively simple, which is to obtain service fees by providing on-chain asset-related services, including asset minting services, as well as digital asset indexing and data availability services.
Metaplex provides a wide range of services and products, not all of which are charged. See below for a list of specific service fees:
MPL asset service charging standards, source: developer documentation
Aura service charging standards, source: Developer documentation
The Aura business line is still in its infancy, with the majority of Metaplex’s current revenue coming from asset minting and management services (MPL).
Business data
We will focus on two core indicators: the number of asset minting services and protocol revenue.
Before presenting and analyzing the above two indicators, let’s first look at the type distribution of assets issued by the Metaplex protocol.
Data source: Metaplex Public Dashboard, the same below
The above chart shows the trend of the proportion of NFT and FT assets that use Metaplex's Metadata (which provides additional data for digital assets, such as asset images, descriptions, etc., which is used by almost all assets).
We can see that at the beginning of 24, the main assets issued by the Metaplex protocol were still NFTs, accounting for about 80%, but since April last year, the proportion of FT assets has increased rapidly and has become the main service asset category of Metaplex, currently accounting for more than 90%.
Most of the FT assets are Meme-type projects, and the issuers behind them are currently the main customer groups and revenue contributors of Metaplex.
This also means that the prosperity of Meme on the Solana chain currently directly affects the business trends of Metaplex.
Let’s look at specific business indicators.
Number of assets minted (monthly)
We can see that the number of assets minted by Metaplex has bottomed out since September last year, reaching a historical peak in January this year (more than 2.3 million types of assets minted), and then gradually declined. The data in March has basically fallen back to the level of June last year (about 960,000 types of assets minted). This data is highly consistent with the trend of Meme trading popularity in the Solana ecosystem. The higher the Meme popularity, the more assets will be issued through Metaplex.
Agreement income
Metaplex's protocol revenue is consistent with the number of its asset minting, reaching a historical peak in January with protocol revenue of US$4.3 million, and then quickly fell back. The estimated protocol revenue for March is US$1.2-1.3 million, returning to the level of the first half of last year.
Protocol Incentives
Unlike most Web3 protocols that rely on subsidies for business data, Metaplex does not provide subsidies for its business. Its income is completely organic and comes from the real needs of asset issuers. However, it conducted a round of token incentives worth $1 million from January to early March this year, in cooperation with Orca, Kamino and Jito, to incentivize the liquidity of its token MPLX. The plan has now ended.
Competition
As the earliest asset standard setter on Solana, Metaplex currently has no comparable competitor in the Solana ecosystem in terms of asset standards and the asset services derived from them.
Competitive Advantage
Metaplex's competitive advantage comes from the fact that it is the developer and maintainer of Solana's ecological asset standards and the foundation of Solana's digital assets, ensuring interoperability and liquidity between NFTs, FTs, real-world assets (RWA), decentralized infrastructure (DePIN), game assets, etc. in the ecosystem.
This means that issuers who issue and maintain assets based on Metaplex will face high time, technical, and economic costs if they want to switch the project's assets to other protocols for management in the future.
When new developers and projects choose an asset service platform, they will also give priority to choosing the Metaplex asset format with stronger ecological compatibility to ensure the compatibility of their assets with other infrastructure (such as wallets) and products (Defi, trading panels) in the Solana ecosystem.
In addition to asset services, Metaplex's currently promoted data indexing and data availability service Aura Network is also expected to create a second business growth curve for Metaplex in the future. Considering that the target of this service is highly overlapped with Metaplex's original customer base, its newly expanded business may also be more easily accepted and experienced by existing cooperative customers.
Main challenges and risks
Solana Meme’s popularity continues to cool, causing the number of asset minting to continue to decline and business revenue to decrease. This trend since January has not stopped yet.
Metaplex’s current revenue is a one-time payment based on the type of assets created. Projects with relatively fixed asset types cannot bring Metaplex sustained revenue in the long term.
Valuation reference
Metaplex's protocol token is MPLX, with a total supply of 1 billion.
Currently, the utility of MPLX is mainly governance voting. In addition, Metaplex announced in March 2024 that it will use 50% of the protocol revenue to repurchase tokens (this standard is not strictly enforced in actual implementation, mostly between 10,000-12,000 sol), and the repurchased tokens will enter the treasury for the development of the protocol ecosystem.
So far, the monthly repurchase amount is above 10,000 SOL.
Considering that Metaplex lacks similar benchmark projects, we mainly observe the ratio of its market value to monthly agreement revenue, and provide valuation reference from a vertical perspective.
As of now, compared with its first-quarter protocol revenue, its valuation level is at its lowest level in the past year or so, which basically reflects the market's pessimistic expectations for the asset issuance market on Solana.
5. Hyperliquid: Troubled derivatives + L1
Hyperliquid is one of the few practical new projects in this cycle. Mint Ventures published an article about Hyperliquid at the end of last year. Interested readers can go and check it out.
Business Status
Hyperliquid's business can be divided into three parts: derivatives exchange, spot exchange and public chain. Currently, all three parts of the business have been launched, but in terms of business volume and influence, the derivatives exchange is Hyperliquid's core business.
For derivatives exchanges, trading volume and open interest are their core indicators.
Hyperliquid's derivatives trading started cold-start in June 2023, and points activities began in November 2023. After the official token airdrop at the end of November 2024, trading volume and open interest began to rise rapidly. Since December last year, Hyperliquid's daily derivatives trading volume has averaged between $4 billion and $7 billion, with a maximum daily trading volume of $18.1 billion. Open interest has also risen rapidly, and since December, it has fluctuated between $2.5 billion and $4.5 billion.
Source: Hyperliquid official website
Hyperliquid's platform funds began to surge in November and have fluctuated around US$2 billion since then. However, the recent series of attacks have caused Hyperliquid's funds to drop sharply from US$2.5 billion to US$1.8 billion.
In terms of users, the number of Hyperliquid addresses has also increased rapidly, and the cumulative number of transaction addresses is currently close to 400,000.
In terms of spot trading, Hyperliquid previously only supported the native assets of Hyperliquid L1, of which HYPE’s own trading volume accounted for the absolute majority. However, in February of this year, Hyperliquid launched uBTC, a decentralized BTC spot trading solution suitable for Hyperliquid. However, Hyperliquid’s BTC spot trading volume is about 20-50 million US dollars per day, which is not a high proportion of Hyperliquid’s spot trading volume of about 200 million US dollars per day.
Hyperliquid spot trading volume Source: DeFillama
In addition, Hyperliquid's spot listing adopts a decentralized approach (HIP-1). Everyone can publicly auction the qualifications for spot listing on Hyperliquid. This part of the auction amount can be regarded as Hyperliquid's "listing fee", and its trend is shown in the figure below;
Hyperliquid’s spot listing qualification historical auction prices Source: ASXN
It can be seen that Hyperliquid's listing fee fluctuates greatly. It once hit a peak price of nearly one million in December. However, as the market's enthusiasm for altcoins has declined, it has now dropped to around US$50,000.
Hyperliquid's EVM part HyperEVM was launched on Alpha on February 18 this year. On March 26, HyperEVM completed the connection with the existing HyperCore. However, since a considerable part of the EVM protocol has not been launched, key infrastructure such as bridges are not very complete, and the official has not introduced any incentives, the overall activity of HyperEVM is still limited. Judging from TVL, transaction volume and tx number, it ranks around 20th among all chains.
TVL, transaction volume, and TX data of each chain Source: Geckoterminal
In terms of income distribution, they will repurchase $HYPE tokens through the AF Assistance Fund with all income collected from the agreement, including derivatives and spot trading fees and spot listing qualification auction fees, in addition to allocating them to HLP.
Hyperliquid's revenue in the last 30 days was $42.05 million, second only to Tether, Circle and Tron, and higher than L1 public chains such as Solana and Ethereum, as well as many other applications such as Pump Fun and Pancakeswap. Except for Tron, the revenue of other protocols has nothing to do with their tokens (or there is no related token).
30-day revenue ranking of all protocols Source: DeFillama
Competition
Since the overall status of HyperEVM is more like an "online test" status, we mainly distinguish between derivatives exchanges and spot exchanges to analyze the competitive situation of Hyperliquid.
Decentralized derivatives exchange trading volume share Source: Dune
Hyperliquid currently occupies an absolute leading position in decentralized derivatives exchanges.
Compared with several leading centralized exchanges, Hyperliquid's trading volume is also increasing rapidly. The following figure shows the ratio of Hyperliquid's trading volume to Binance, Bybit, Okx, and Gate Contracts:
Ratio of Hyperliquid contract trading volume to centralized exchange contract trading volume Source: Syncracy report
In the spot trading sector, Hyper’s average daily trading volume in the past month was around $180 million, ranking 12th among all Dex.
Dex spot trading volume ranked top 15 Source: DeFillama
Hyperliquid’s Competitive Advantage
Hyperliquid's derivatives business has developed rapidly, mainly relying on the following points:
1. Adopting the order book model that has been widely verified in the trading field, the experience of smoothly migrating to centralized exchanges is also convenient for introducing market makers;
2. A more proactive contract listing strategy. Hyperliquid was the first to launch a pre-launch token contract, and also launched a pure DEX token contract. It also promptly followed up on hot currencies, making Hyperliquid the exchange with the best liquidity for many new currencies.
3. Lower fees. Compared with GMX’s comprehensive fee of about 0.1% (including 0.06%~0.08% transaction fee, slippage fee, lending fee, etc.), Hyperliquid only charges a comprehensive fee of 0.0225% (source: Mint Ventures), which makes Hyperliquid’s fee rate more obvious.
The above has enabled Hyperliquid to gain a firm foothold in the field of decentralized derivatives exchanges. At the same time, the points program started in November 2023 and the generous airdrop program have further accumulated user loyalty, making Hyperliquid currently have no competitors in the decentralized derivatives exchange field.
However, the above points are not enough to constitute Hyperliquid's long-term competitive advantage, because competitors can completely follow Hyperliquid's mechanism design, coin listing strategy and fee rate. At present, Hyperliquid's competitive advantages mainly lie in:
1. A strong and enterprising team and continuous delivery capabilities. Hyperliquid currently has a team size of about 10-20 people, but in less than two years they have successively delivered three major products, namely derivatives exchange, spot exchange and L1, in a relatively innovative way. Although some products still have defects, the team's innovation and delivery capabilities stand out among similar products.
2. Good brand effect. Despite the recent successive ETH contract and JELLY contract incidents, Hyperliquid still has a better brand effect than other competitors, and Hyperliquid is still the first choice for on-chain user contract transactions.
3. Scale effect. Hyperliquid's market leading position since the second half of 2024 has accumulated deeper liquidity than its competitors, and the resulting scale effect is also an important competitive advantage of Hyperliquid.
It is worth mentioning that the complete openness and transparency of data itself is not a competitive advantage of Hyperliquid. Although this feature is generally convenient for users, the impact on Hyperliquid's business may be more disadvantageous than beneficial in the short and long term. We will elaborate on this in the JELLY contract incident below.
Main challenges and risks
Risks of derivatives trading mechanism: Hyperliquid has recently experienced two consecutive incidents:
One was the 50x whale leveraged long ETH position liquidation event, which caused HLP to lose $4 million. The main reason was that Hyperliquid's retention margin rules were set unreasonably. The vulnerability that caused the problem has been fixed. The other was the JELLY contract event. The main reason for this event was that Hyperliquid had a problem with the upper limit of the holding amount for small-cap currencies. When JELLY was launched, its market value was close to 200 million US dollars. Hyperliquid adopted the general upper limit of 30 million US dollars for the holding amount. However, at the time of the incident, JELLY's market value was less than 10 million US dollars. At this time, Hyperliquid's upper limit of the holding amount was still 30 million US dollars, which gave external funds an opportunity to attack. The incident caused HLP to lose up to nearly 15 million US dollars (accounting for 24% of HLP's total historical profit). In the end, Hyperliquid chose to settle according to the price before the JELLY price change, which caused the market to discuss its decentralization issues.
Both incidents highlighted loopholes in Hyperliquid's core trading rules. Although Hyperliquid took relatively effective measures to remedy the situation afterwards, fundamentally speaking, the characteristics of decentralized derivatives exchanges, "all addresses have completely transparent position status (including position size and liquidation amount)", coupled with the Hyperliquid platform characteristic of "HLP fully assumes the responsibility of liquidation counterparty", leave potential attackers with theoretically unlimited attack vectors. Under the artificially set rules, there may always be various loopholes that can be exploited by interested parties in the dark forest of blockchain. As long as these two core mechanisms are not changed, Hyperliquid will still face the possibility of being attacked in the future. This is the main concern of the market about Hyperliquiquid in the near future.
Security risks: Currently, Hyperliquid's funds are mainly stored in the bridge of its Arbitrum network. The security of the smart contract and the multi-signature security of the team that manages all the funds are crucial. Previously, in December, North Korean hackers tested the Hyperliquid contract, which caused Hyperliquid's funds to drop sharply from 2.2 billion US dollars to 1.9 billion US dollars.
EVM progress is slower than expected: HYPE's current valuation still has considerable expectations for its EVM. The progress of HyperEVM since its launch has not been very smooth. If this continues, the L1 part of HYPE's valuation will continue to decline, and the overall valuation of L1 is much higher than that of derivatives exchanges. If only the derivatives exchanges are used for valuation, HYPE's current valuation is not low (see below for details).
Valuation reference
Hyperliquid's revenue currently mainly comes from the fees of derivatives and spot exchanges and the listing fees of spot exchanges. Hyperliquid currently distributes this part of the revenue uniformly. After subsidizing the income of HLP, it repurchases HYPE in full through AF (Assistance Fund). Therefore, for the valuation of HYPE, we apply the P/S model or even the P/E model (the part used to repurchase HYPE is both revenue and can be roughly regarded as the net profit of token holders).
Hyperliquid's revenue in the last 30 days was $42.05 million, and its annualized revenue was $502 million. Based on the current market value of $4.2 billion, its circulation PS is 8.33, and its full circulation PS is 24.96. Based on the circulation PS, in the field of derivatives exchanges, Hyperliquid's valuation is close to that of GMX and ApolloX. However, compared with L1, Hyperliquid's valuation is still lower.
