Recently, the crypto market has continued to decline, and the TVL (Total Value Locked) of major protocols has dropped significantly. However, amidst this low tide, there is one protocol that has defied the trend and actually increased, and that is Hyperliquid.

With its unique profit mechanism and strong trading volume, its token HYPE not only maintains resilience during a downturn but also generated $2.19 million in protocol revenue within just 24 hours, with 7-day revenue surpassing Pumpfun, ranking seventh in the overall revenue list.

What makes Hyperliquid stand out in the crypto winter? How does it break the industry's curse to achieve simultaneous growth in revenue and market cap? Let us delve into the driving forces behind this phenomenon.

High-performance Layer 1 - fully on-chain order book perpetual trading exchange Hyperliquid DEX

Hyperliquid's core product is its perpetual contract DEX, which enables traders to access up to 50 times leverage on BTC, ETH, SOL, and other assets. It features a fully on-chain order book and zero gas fees. Unlike Solana, which supports a wide range of decentralized applications (DApps), Hyperliquid's layer-1 is specifically built to optimize DeFi trading efficiency.

As of February 28, 2025, Hyperliquid (HYPE) ranked seventh in protocol revenue with $2.19 million in 24-hour protocol revenue and a cumulative $12.61 million in 7 days, surpassing emerging protocols like Pumpfun, and establishing an absolute dominance in the decentralized perpetual contract sector.

Multi-dimensional innovation in revenue structure

Hyperliquid's revenue sources break through the traditional DEX reliance on a single model of transaction fees, forming a triple rocket model:

Derivative trading fees (accounting for over 70% of revenue): A tiered fee structure for perpetual contracts ranging from 0.01% to 0.035%, combined with a daily average trading volume of $10 billion, forms the revenue base;

Spot auction revenue: Through the HIP-1 token Dutch auction mechanism, the single project listing fee reaches $300,000 to $500,000, with an annual income potential exceeding $140 million;

Cross-chain bridging and ecological service fees: With the launch of HyperEVM, gas fees (paid in HYPE) and smart contract service fees will become new growth drivers.

Its core data indicators show a growth logic that is starkly different from traditional DEXs:

1. Disruptive breakthroughs in trading scale and efficiency

Daily trading volume remains stable at around $9 billion, peaking over $10 billion. This data has reached 6%-10% of Binance's perpetual contract trading volume, far exceeding similar decentralized platforms (like dYdX, GMX, etc.).

The TVL/revenue ratio is only 50.6 (TVL $638 million vs 7-day revenue $12.61 million), significantly better than Uniswap (184.9) and Raydium (12.7). The top DEX Uniswap had a revenue of $22.8 million during the same period, but its higher TVL highlights Hyperliquid's profit margins, fully demonstrating that its capital utilization rate reaches the industry's top level.

Token Economics: Building a perpetual motion machine for value capture

The token model design of HYPE innovatively ties protocol revenue directly to token value:

Triple drivers of the deflationary engine

100% revenue buyback and burn: The platform will use over 70% of derivative trading fees and spot auction revenues for market buybacks of HYPE and burning. Based on current revenue levels, the annualized burn amount could reach 150 million tokens, accounting for 21.4% of the circulation;

Staking deflationary mechanism: Validators need to stake HYPE to participate in consensus, with the current staking APY reaching 18.9%, attracting over 31% of circulation locked;

Expansion of token utility scenarios: After the launch of HyperEVM, HYPE becomes the essential token for cross-chain gas payments and smart contract deployments, with a dual driving force of new developers and users on the demand side.

The timing game of token allocation

Unlocking risk controllability: Team tokens (23.8%) are locked until December 2025, and a linear release (24 months) is adopted, which is more conservative compared to similar projects (e.g., dYdX team unlocks immediately);

Community incentive reserve: 38.9% of tokens are used for ecological construction, continuously attracting external liquidity through trading volume mining and developer incentives. Data shows that each $1 incentive can leverage $5.3 of TVL growth.

Valuation model construction: Re-evaluating value from multiple perspectives

1. Relative valuation method (peer comparison)

HYPE's current circulating market cap of $6.7 billion corresponds to a PS of 5.8, which is at a low point in the industry. Considering its revenue growth rate is 3-4 times that of its peers, with a PEG ratio of only 0.27, it is indeed undervalued overall.

2. DCF model estimation

Key assumptions:

- Estimated compound annual growth rate of 55% in revenue over the next three years (conservative estimate)

- Staking yield maintained above 15% to attract long-term holders

- HyperEVM ecosystem contributes over 25% of new revenue

Discounted results:

- Reasonable valuation by the end of 2025: $48.2 (+130%)

- Target price for 2026: $79.5 (PEG regression to industry average of 0.8)

3. On-chain value capture coefficient (VCC)

Introducing the TVL/(MC/TVL) metric for estimation:

- HYPE VCC=6.38/(69/6.38)=0.59

- Industry average = 0.31

This data indicates that each $1 TVL in the Hyperliquid ecosystem creates value 1.9 times the industry average.

Risk factors and market misjudgments

1. A re-examination of the "centralization doubts"

Hyperliquid's native token HYPE will be launched through an airdrop in November 2024, covering 94,000 unique addresses. This allocation drove a market cap of $2 billion on the first day, indicating a high community adoption rate.

However, on-chain data shows that the team controls 78% of the staking volume.

Although node centralization has sparked controversy, it should be noted:

- The validator committee adopts a dynamic rotation system, randomly changing 1/3 of the nodes every epoch (about 4 hours);

- The open-source process is being advanced in phases, with the core RustVM code already audited by CertiK.

2. Deep barriers in the competitive landscape

- Liquidity moat: The network effect formed by daily trading volume of $9 billion requires competitors to invest at least $1.8 billion for a vampire attack (based on 0.2% incentive estimation), while HYPE's buyback mechanism can instantly offset over 30% of the impact;

- Developer migration cost: HyperEVM is fully compatible with Solidity but achieves ten times the performance of EVM chains through HyperBFT, forming an advantage of "no barriers to development, differentiated experience."

Conclusion: Strategic opportunities in value reconstruction

Hyperliquid has reconstructed the rules of on-chain value flow through technological paradigm innovation:

- Short-term (0-6 months): Benefiting from the surge in gas demand brought by HyperEVM's launch, coupled with the peak trading season for perpetual contracts in Q2, target price $35-42;

- Mid-term (6-18 months): Ecological expansion diversifies revenue structure, with PS expected to align with Binance's platform token (8.2 → market cap of $9.2 billion);

- Long-term (18 months+): If the 55% revenue growth rate is maintained, a market cap of $100 billion is expected by 2026, becoming a core component of Web3 financial infrastructure.

In today's world where the boundaries between traditional CEX and DEX are increasingly blurred, Hyperliquid proves the possibility of a new path - breaking through with blockchain-native performance to achieve a paradigm revolution in financial efficiency. While the market still views HYPE through the valuation framework of DEX, its essence has already merged the efficiency of CEX, the transparency of DEX, and the scalability of L1 into a trinity new species, which is the core logic of its value re-evaluation.