Hyperliquid Repositions From Perpetuals Venue to Financial Infrastructure

Year-to-date, HYPE is up +34.9%, sharply diverging from Bitcoin (–26.9%) and the broader altcoin complex (–24.6%). While some of this relative strength may reflect a lag in downside rather than outright immunity, the degree of outperformance remains notable. 

Before the recent rebound, HYPE briefly capitulated to a low of $20.48, as persistent negative sentiment surrounding token unlocks weighed on prices. Since November, roughly 9.9mn HYPE tokens are technically 'unlocked' on a monthly basis, a figure widely interpreted by market participants as an impending supply overhang. 

At prevailing prices, this translated into an assumed selling pressure ranging from $250mn to $350mn, fueling a prolonged unlock-driven FUD narrative. However, this assumption rests on a flawed premise: unlocked tokens do not mechanically equate to tokens sold. 

Data from Qwantify, which tracks wallets tied to token distributions, paints a far more nuanced picture. Of the tokens unlocked, only 1.7mn HYPE were distributed in December, followed by 1.1mn thereafter, a fraction of the 9.9mn headline. Of those distributed tokens, the majority were either absorbed directly by the market or sold through OTC channels, while roughly one-quarter were staked back into the ecosystem. 

In practice, the realized selling pressure and its associated price impact proved marginal. 

But beyond short-term flow dynamics, Hyperliquid’s fundamentals continue to strengthen as the platform steadily assembles the building blocks of a composable, one-stop infrastructure for onchain finance.

That appears to have prompted a repricing of Hyperliquid not merely as a perpetual futures venue, but as a core financial primitive that builders can plug into. 

Reclaiming market share 

Following the initial noise surrounding new decentralized perpetual venues, including EdgeX, Lighter, and Aster, the onchain derivatives landscape briefly appeared more fragmented.  

Incentive-driven narratives temporarily took center stage, flows dispersed, and market share shifted away from incumbent platforms. As is often the case in crypto, however, the market ultimately reverted to fundamentals. 

Despite operating in a low-activity regime - with both absolute trading volumes and aggregate open interest under pressure - Hyperliquid has steadily regained market share. This recovery comes after a period of heightened competition that pushed its perpetuals market share meaningfully lower from late September onward. 

At the trough in early December, Hyperliquid’s open interest market share fell to roughly 53%. Since then, it has rebounded above the 60% threshold, even as total market open interest has continued to trend lower since mid-January. 

(Source: DefiLlama)

This broader contraction reflects a market-wide deleveraging cycle, driven by persistent downside pressure and repeated liquidation events - dynamics that typically penalize all venues indiscriminately. That Hyperliquid managed to reclaim share in such an environment underscores the relative stickiness of its liquidity and user base. 

The same pattern is even more pronounced on the volume side. In November, a significant portion of trading activity migrated away from Hyperliquid as market participants rotated toward newly launched venues to farm points and position for potential token distributions ahead of upcoming Token Generation Events (TGE).  

(Source: DefiLlama)

At the peak of this incentive-driven dispersion, Hyperliquid’s volume market share dropped to as low as 11.41%. With the Aster and Lighter TGEs now behind us, that transient incentive has faded. Predictably, trading activity has begun to flow back toward the deepest and most efficient venue, allowing Hyperliquid to reclaim roughly half of total market volume as of 6 Feb. 

This recovery is not limited to competition within decentralized perpetual markets. Hyperliquid has also been regaining share relative to centralized venues, with both trading volume and open interest improving on a relative basis. 

Recent uncertainty surrounding certain centralized exchanges - including renewed FUD around Binance - has prompted some participants to reduce their exposure to centralized venues, further reinforcing the structural tailwind toward onchain, decentralized execution. 

HIP-3: The rise of equity and RWA perpetuals 

A significant shift in Hyperliquid’s market structure has come through the rollout of the HIP-3 protocol upgrade, which expanded the protocol framework beyond crypto-native assets to include perpetual markets for equities, commodities, and other real-world assets (RWAs). 

From a market structure perspective, HIP-3 offers fully transparent order flow, liquidity supported by a community-owned internal market maker and 24/7 operation of traditional markets.  

Since its release in October 2025, HIP-3 markets have surpassed the $50bn mark in cumulative trading volume. The bulk of this growth has materialized only recently. From the second half of January onward, cumulative volume expanded by +177.4%, with $32.1bn traded over the period, accounting for roughly 64% of total platform volume since inception. 

(Source: Flowscan)

This acceleration has been overwhelmingly driven by the commodities frenzy, brought onchain through TradeXYZ, which now concentrates close to 90% of total HIP-3 trading volume. As crypto markets breached multi-month lows, traders increasingly rotated toward silver and gold to reintroduce volatility and directional opportunity into their portfolios. 

This behavior closely mirrors the rotation observed in December, when tokenized equities gained traction as traditional markets outperformed crypto assets, reinforcing the view that onchain markets increasingly serve as a flexible conduit for expressing macro and cross-asset views on risk appetite. 

(Source: Flowscan)

Within TradeXYZ - and HIP-3 by extension, precious metals have rapidly emerged as the dominant liquidity driver. Trading in gold, silver and copper now accounts for approximately 48% of total platform volume, equivalent to $44.4bn, with silver alone accounting for 36.5%, or roughly $16.2bn.  

And these markets have been live for just over one month. 

The scale becomes more tangible when viewed against traditional benchmarks. On 30 Jan, CME data shows approximately $185bn in futures volume traded across legacy venues. 

On that same day, TradeXYZ recorded a peak onchain trading volume of $4.3bn on Hyperliquid, of which $2.84bn was attributable to silver. This equates to roughly 1.5% of total global futures volume for the asset - achieved by a protocol that has yet to reach its third anniversary. 

Over the month, HIP-3 markets generated $24.8bn in trading volume, representing approximately 12% of total perpetual trading activity on the platform. 

This surge in HIP-3 activity has directly impacted protocol economics. Hyperliquid printed $21.2mn in recent weekly fees, marking its highest revenue print since mid-November 2025.  

To put this into perspective, cumulative trading volume across spot tokenized equities from leading issuers such as Backed Finance and Ondo has reached only ~$11.6bn since November 2023, with most of that growth occurring in recent months. 

HIP-4: Outcome markets as a new financial primitive 

Earlier this week, Hyperliquid introduced HIP-4, extending Hyperliquid's core execution layer, HyperCore, to support outcome-based contracts - fully collateralized instruments that settle within predefined payoff ranges rather than tracking continuously floating prices like perpetuals. 

These contracts serve as a general-purpose primitive for prediction markets and event-driven, options-like payoffs, with the initial deployment currently live on testnet.  

Unlike binary 'yes or no' prediction markets, outcomes feature non-linear settlement mechanics, introducing a degree of flexibility previously unavailable on Hyperliquid. Outcome contracts can be combined to construct custom hedges, event-driven exposure, or structured payoff profiles, extending risk management beyond directional perps and spot positions. 

Outcomes will be deeply integrated at the protocol level, priced in Hyperliquid’s native stablecoin USDH, and will share both cross-margin and portfolio margining with existing spot and perpetual markets. 

This unified margin framework is a key distinction from standalone prediction platforms. Rather than isolating capital in separate venues, traders can express event risk, macro views, or bounded outcomes within the same margin account as their directional or hedged positions. 

By consolidating both legs of a trade into a unified margin account, Hyperliquid removes the need for cross-venue execution - such as maintaining a directional crypto position on one venue while hedging macro risk via outcome markets elsewhere. 

This lays the groundwork for more sophisticated multi-leg structures, delta-neutral positioning, and yield strategies – all under the same roof. 

HIP-4: Incremental impact on Hyperliquid economics 

At present, Hyperliquid generates the bulk of its revenue from perpetual markets. 

Over the past three months, the platform has averaged $73.1mn in monthly revenue, primarily driven by perps. Against this backdrop, HIP-4 is unlikely to move the needle immediately.  

Historically, the introduction of new large-scale prediction market venues has tended to result in relatively even market share distributions over time. Following Kalshi’s entry alongside Polymarket, trading activity broadly converged toward a roughly 50/50 split.  

The subsequent launch of Opinion further fragmented flows, leading to a more balanced distribution, with each platform capturing a third of total trading volume across prediction markets. 

Therefore, a conservative baseline for HIP-4 would be to capture roughly 25% of the future prediction market trading volume over the midterm, as the latter is likely to naturally converge toward an even four-way distribution across the major venues. 

(Projections assuming HIP-4 captures 25% of current monthly prediction market trading volume)

According to Sandmark analysis, incremental revenue would range between $688,875 and $2.3mn on a monthly basis, depending on taker fee assumptions. At a competitive ~0.05% taker fee, HIP-4 would contribute roughly 1.5% of current platform revenues. 

The longer-term picture is more compelling. Trading volume on prediction markets has grown by roughly 27% month-on-month since November. Even under a conservative assumption - sustaining half that monthly growth rate over the next year - monthly volumes could approach the $100bn threshold by year-end. 

Under that scenario, and assuming flat perpetual revenues in a prolonged low regime market, HIP-4 could scale to represent a mid-teens percentage of Hyperliquid’s total revenue mix over time, even at low, competitive fees.  

While speculative, this highlights that HIP-4 embeds optionality on a fast-growing market segment, rather than serving as a short-term monetization lever. 

The HIP-4 protocol upgrade is less about immediate revenue impact and more about completing Hyperliquid’s financial product suite, reinforcing its positioning not as a single-market venue but as a composable infrastructure for onchain finance.