Hyperliquid Dominates Crypto Derivatives Market After Airdrop

Crypto derivatives exchange Hyperliquid is surpassing all competitors in volume traded after it issued one of the largest airdrops in the industry’s history.

Hyperliquid’s trading volume jumped by 84% in the last 24 hours to almost $5 billion, accounting for 52% of trades in that time and beating all other platforms, according to DeFiLlama. Hyperliquid’s volume is more than seven times larger than dYdX’s, the exchange that comes second on the list.

The exchange also surpassed competitors, including SynFutures, ApeX Protocol, and Jupiter, which accounted for 7.78%, 6.73%, and 5.95% of cryptocurrency trades, respectively.

The platform has also now surpassed a cumulative trading volume of $438.978 billion, only second to dYdX, which currently stands at $1.451 trillion.

Hyperliquid’s growth follows its Nov. 29 airdrop. The exchange distributed 310 million HYPE tokens to its community.

HYPE Token Launch

At launch, the HYPE token debuted at $3.90, estimating the airdrop valuation at $1.2 billion, according to CoinGecko. Over the next three days, that figure surged by around 133% to reach an all-time high of $9.87 on Dec. 1.

On Dec. 2, the price of HYPE dropped to $8.86, bringing its market capitalization to nearly $3 billion.

The HYPE token is meant to serve as the staking asset for Hyperliquid, which operates as a Layer 1 blockchain. It will also act as the gas token for its Ethereum Virtual Machine (EVM)-compatible layer, HyperEVM.

The Hyperliquid protocol revealed that 31% of its $1 billion HYPE token supply was distributed during the airdrop event, this compares with an average community allocation of about 10% for most airdrops. Additionally, 38.8% of the remaining tokens are earmarked for future emissions and community rewards, while 6% will go to the Hyper Foundation treasury, and 0.3% is allocated for grants​.

Tokens allocated to core contributors will be locked for one year following the genesis event. Most vesting schedules are expected to be completed between 2027 and 2028, with some extending beyond that time. Hyperliquid noted that core contributors are excluded from the initial distribution during the genesis event.

Centralization Concerns

While the airdrop has been widely celebrated, some industry observers have raised concerns regarding the centralization of the Hyperliquid network. Bartek Kiepuszewski, the founder of data platform L2 Beat, questioned the number of validators running Hyperliquid’s blockchain, particularly in relation to its HyperBFT consensus protocol in a Dec. 1 tweet.

The tweet questioned if only four validators, which are also part of a 3/4 multisig setup validating withdrawals, are currently active on the network. Critics argue that this structure could undermine the decentralized nature of Hyperliquid and pose potential risks to the platform’s long-term security and governance.

Peter Kris, cofounder of asset platform Gasp.Xyz, echoed this sentiment in a separate tweet, accusing Hyperliquid of being a centralized exchange (CEX) instead of a decentralized exchange (DEX). Kris noted that Hyperliquid is closed-source, lacks a proper consensus mechanism, and is currently running on a single validator controlled by the team.

This has raised doubts about the transparency of the platform among some community members, with questions regarding the accuracy of reported metrics such as trading volume and total value locked (TVL).

Hyperliquid’s TVL is currently $1.4 billion, up from $658 million it recorded in October, and a 25x increase from the $58 million the exchange had only a year ago.