Hyperliquid’s $HYPE token has only continued to rise after Friday's billion-dollar airdrop.
Hyperliquid's landmark DeFi airdrop injected 310 million HYPE tokens into the ecosystem on November 29. The protocol distributed tokens as rewards to active traders based on points accumulated during a six-month trading period that ended in May. The $HYPE tokens' genesis distribution ranks among the largest airdrops in DeFi history.
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In just four days, Hyperliquid increased its market share in DEX perpetual futures trading from 27% to 37%. Yet, despite being one of DeFi’s most competitive subsectors, crypto derivatives remain firmly dominated by centralized exchanges like Binance, while DEXs capture only 3-5%.
Hyperliquid's perpetual DEX is the flagship product on its Hyperliquid proof-of-stake blockchain, capable of handling up to 200,000 transactions per second. The HYPE token powers the ecosystem through staking and gas fees for the parallelized Hyperliquid Ethereum Virtual Machine. This HyperEVM, secured by the same consensus as Layer 1, enables applications to interact with and build off the liquidity pools in its flagship perps and spot order books (this is still in testnet).
(Hyperliquid co-founder on X)
In the genesis distribution event, Hyperliquid released 31% of HYPE tokens. Breaking from industry norms, the protocol avoided venture capital allocations entirely. It reserved 38.8% for emissions and community incentives. Core contributors hold 23.8% under a one-year lock with vesting until 2028. The Hyper Foundation retains 6% for operations and 0.3% for ecosystem development, with no allocations for private sales, exchange listings, or market-making activities.
The HYPE token is integral to the Hyperliquid ecosystem, serving multiple functions. It enables Layer 1 staking and governance participation, reinforcing its role as a utility token. Additionally, it serves as the native gas token for the HyperEVM, facilitating transaction fees.
HYPE's market capitalization, currently around $3 billion, ranks higher than that of the lending platform Aave, privacy-focused Monero, Ethereum Layer 2 Optimism, and other notable projects.
Some experts believe that Hyperliquid's $1 billion capital injection into DeFi may kick off a new wave of ecosystem growth as traders take profits from HYPE and bridge them to other chains to capture DeFi opportunities.
Meanwhile, according to Dune Analytics' data, Uniswap, a leading DEX protocol on the Ethereum network, set a new monthly volume record in November as DeFi activity surged on the protocol.
(Source: Dune Analytics)
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