Layer-1 blockchain network Hyperliquid needs to bootstrap a robust developer community to sustain its native token’s roughly $25 billion market capitalization, asset manager VanEck said in a Jan. 6 research note.
Hyperliquid has become one of the most valuable blockchains since launching its HYPE token in a November airdrop. However, Hyperliquid’s nascent smart contract platform has “yet to attract much of a developer community,” VanEck said.
“If Hyperliquid is unable to meet the growth expectations of its community, the prisoner’s dilemma facing many newly rich $HYPE holders may quickly unravel,” the asset manager wrote.
“Once again, we can see another Icarian tale about crypto hubris.”
Hyperliquid’s market share has surged over the past year. Source: VanEck
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Rapid growth, high expectations
Since launching in 2024, Hyperliquid’s flagship perpetual futures exchange has captured approximately 70% of the market share, surpassing rivals such as GMX and dYdX. It now handles around $260 million in transactions every day, VanEck said.
Hyperliquid’s growth reflects broader gains for decentralized exchanges (DEXs), which saw monthly trading volume hit all-time highs of $433 billion in December, according to VanEck.
Perpetual futures, or “perps,” are derivatives that let traders buy or sell an asset at a future date with no expiration.
Meanwhile, Hyperliquid’s airdrop was widely lauded as 2024’s most successful token generation event.
Its HYPE token has gained more than 500% since launching on Nov. 29. After reaching highs of approximately $34 in December, HYPE has retraced to around $25 as of Jan. 7, according to CoinGecko.
“In just one month of trading, Hyperliquid ranks as the 13th most valuable project in crypto,” VanEck said.
This is partly because “Hyperliquid has built a growth story founded upon becoming a general-purpose blockchain that will accommodate other applications besides its ‘hyper’ successful Perp DEX,” VanEck said.
Monthly DEX volumes surged at the end of 2024. Source: VanEck
According to VanEck, DEXs such as Hyperliquid “tend to lack long-term competitive moats […] because most DEXes are based on open-source code and offer features that are easy to copy.”
In 2025, Hyperliquid aims to launch an Ethereum Virtual Machine smart contract platform, which VanEck says is crucial for diversifying the layer 1’s revenue base and justifying HYPE’s lofty valuation.
At least half a dozen Hyperliquid-native decentralized applications are live on the EVM’s testnet, in some cases touting thousands of users, according to Web3 researcher ASXN.
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