Layer 1 blockchain network Hyperliquid needs to bootstrap a strong developer community to sustain its native token’s roughly $25 billion market cap, 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 an airdrop in November. But Hyperliquid’s nascent smart contract platform “hasn’t yet attracted a large developer community,” VanEck said.
“If Hyperliquid is unable to meet the community’s growth expectations, the prisoner’s dilemma facing newly wealthy $HYPE holders could quickly unravel,” VanEck said.
“Once again, we see another Icarian story of cryptocurrency arrogance.”
Hyperliquid’s market share has soared over the past year. source: Van Eck
relevant: Solana’s 24-hour DEX trading volume surpasses Ethereum and Base combined.
Fast growth, high expectations
Hyperliquid’s flagship perpetual futures exchange has captured approximately 70% of the market share since its launch in 2024, beating competitors such as GMX and Dydx. VanEck said it is currently processing about $260 million in transactions each day.
According to VanEck, Hyperliquid’s growth reflects the broader interests of decentralized exchanges (DEXs). Monthly trading volume in December hit a record high of $433 billion, according to VanEck.
Perpetual futures, or “perps,” are derivatives that allow traders to buy or sell assets at future dates without an expiration date.
Meanwhile, Hyperliquid’s airdrop was widely praised as the most successful token creation event of 2024.
The HYPE token has risen over 500% since its launch on November 29th. According to CoinGecko, HYPE hit a high of around $34 per token in December before falling back to around $25 as of January 7.
“In just one month, Hyperliquid ranked as the 13th most valuable project in cryptocurrency,” VanEck said.
This is in part because “Hyperliquid has built its growth story by becoming a general-purpose blockchain that will accommodate other applications in addition to the ‘ultra’ successful Perp DEX,” VanEck said.
Monthly DEX trading volume surged toward the end of 2024. source: Van Eck
According to VanEck, DEXes like Hyperliquid “tend to lack a long-term competitive moat because most DEXes are based on open source code and offer features that are easy to copy (…).”
In 2025, Hyperliquid aims to launch the Ethereum Virtual Machine (EVM) smart contract platform. VanEck says this is important for diversifying L1’s revenue base and justifying HYPE’s high valuation.
According to Web3 researcher ASXN, at least six Hyperliquid-based decentralized applications (DApps) are live on EVM’s testnet, in some cases touting thousands of users.
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