- Hyperliquid is the biggest onchain derivatives exchange.
- The Hype token is up 60% in the last month.
- The market is in a rotation cycle, says one analyst.
Just a couple of months ago, Hyperliquid was just one of many decentralised exchanges in the marketplace.
Now it’s suddenly mixing it up with Binance, OKX, and other exchange heavyweights thanks to a shift in how traders are allocating capital across crypto markets.
The onchain derivatives platform clocked $244 billion in trading volume in May, which is only 10% of Binance’s $2.3 trillion derivatives haul for the month.
But still, to notch that level seemed highly unlikely a short time ago.
“There’s clearly a broader rotation toward newer DeFi primitives that solve for speed and usability, and Hyperliquid benefits from this,” Mike Cahill, CEO of Douro Labs, a Pyth Network contributor, told DL News.
“Especially as users get tired of the limitations and slow iteration cycles of legacy protocols.” Doug Colkitt, CEO of Ambient Finance, a DeFi exchange, said Hyperliquid “checks a lot of boxes” in terms of low latency and good user experience.
While Binance is still the market leader in crypto trading, even in the derivatives sector, Hyperliquid has taken a massive leap into the upper echelons of the market.
Back in November, when it launched its HYPE token, it could only notch up the equivalent of 2% of Binance’s volume.
Now, it’s the fifth largest by both open interest and trading volume across both centralised and decentralised platforms behind Binance, Bitget, Bybit, and OKX.
Hyperliquid’s trading bump has also caused its native token, Hype, to soar.
Hype is up 60% in the last month, besting Bitcoin and Solana’s respective 8% and 5% upticks during the same period.
Hype is courting attention from big investors amid a shift towards DeFi projects seen as high-beta bets with sticky users and cash flow.
Colkitt said the market was “clearly in a rotation cycle,” and that Hyperliquid is in the conversation as traders search for the coin that will provide outsized returns.
“Traders want the next Solana or the next dYdX.”
But the new-blood appeal cuts both ways, and the prospects of asymmetric returns on investments come with the potential for volatility.
Perception and performance often work in tandem in crypto, and Hyperliquid has already experienced a dose of this reality.
In March, Hype’s price fell to $10, a slump that coincided with a decline in trading volume on Hyperliquid. The timing of this market slump indicates that mindshare is a significant part of Hyperliquid’s value proposition, according to Illia Otychenko, lead analyst at CEX.IO, a crypto exchange.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him atosato@dlnews.com.
