Setting new milestones, HyperLiquid, an on-chain perpetuals trading protocol, is making waves in the decentralized finance (DeFi) space. Operating on its custom-built layer 1 blockchain, the platform has seen more activity in Ether (ETH) than Bitcoin (BTC), with the cumulative perpetuals volume surpassing $500 billion, a 15-fold increase year-to-date, according to DefiLlama.
In the past week alone, HyperLiquid has reported an average daily volume of over $5 billion, making up over 45% of total on-chain perpetuals market activity in the last 24 hours. The data further reveals that Ether, not Bitcoin, has been driving this surge in activity.
Since Monday, Ether perpetuals have recorded a cumulative trading volume of $7 billion, 18% higher than Bitcoin’s $5.94 billion, per data from stats.hyperliquid.xyz. Ether has also led the growth in cumulative notional open interest on the platform since late November. At press time, Ether perpetuals worth $857.5 million were active, accounting for nearly 25% of the total open interest of $3.49 billion.
This increase in Ether activity on HyperLiquid could fuel the next rally in the cryptocurrency’s value. At the time of writing, ETH was trading at $3,900, marking a 70% gain year-to-date, according to CoinDesk data.
Industry observers attribute HyperLiquid’s success to its specific-purpose protocol, rather than a general-purpose chain. “HyperLiquid’s success appears rooted in prioritizing product-market fit, blending institutional-grade performance with DeFi accessibility, such as no KYC requirements,” said algorithmic trading firm Wintermute, adding, “By offering more generous incentives for active traders, Hyperliquid aligns closely with user needs, potentially setting a new standard for future crypto projects.”
HyperLiquid’s HYPE token, launched just two weeks ago, is already making significant strides. The cryptocurrency has seen a 300% surge since its inception, reaching a market value of $5.69 billion, higher than established DeFi players like Ethereum’s Aave, and Solana-based decentralized exchanges Raydium and Jupiter, according to Coingecko.
Wintermute views the sustained bullish momentum following the record airdrop as a signal of investor confidence. “Despite the potential for significant sell pressure from the airdrop recipients, the sustained demand for HYPE has consistently outpaced supply, indicating robust market confidence,” the firm noted.
On November 29, HyperLiquid airdropped 31% of HYPE’s nearly 1 billion supply to users who held points earned through trading activities. Valued at $1.9 billion, the airdrop surpassed layer 2 solution Arbitrum’s $1.5 billion valuation. HYPE is used as a staking asset to secure the platform’s HyperBFT consensus mechanism and acts as a gas token, facilitating transactions and smart contract executions.
