The leading MEME coin has a market value of hundreds of millions of dollars. Will the L1 public chain Hyperliquid, which focuses on derivatives trading, be the new MEME gold nugget?

Author: Frank, PANews

Recently, the MEME coin on the Layer 1 public chain Hyperliquid has attracted the attention of players. Its No. 1 project by market value, PURR, has a market value of over US$110 million. This data not only exceeds the MEME coins on most public chains, but also ranks among the top ten in the MEME ranking of the Solana chain. In addition to PURR, there are two MEME coins on the Hyperliquid chain with a market value exceeding $20 million.

The emergence of these potential projects makes people wonder whether this new generation of L1 is becoming a new MEME blue ocean market. But from the perspective of Hyperliquid, MEME seems to be far from their real goal.

L1, who became a monk halfway through, promised to build the fastest public chain on the entire network

It is not easy to figure out the positioning of Hyperliquid at the first time. The homepage of its official website introduces: Hyperliquid is a decentralized sustainable exchange, and in its The document states: Hyperliquid is a high-performance L1 optimized from scratch. But this isn't an oversight, it's about the two characters of Hyperliquid.

Hyperliquid founder Jeff Yan once founded Chameleon Trading, a cryptocurrency high-frequency trading company ranked among the top ten in terms of trading volume. Most of Hyperliquid’s team members are also from Chameleon Trading. For a team with sufficient experience in high-frequency contract trading, Hyperliquid’s start was not to build a public chain, but to “build a decentralized Binance.”

Therefore, Hyperliquid’s initial product was a decentralized perpetual exchange Hyperliquid. As business volume increased, Hyperliquid believed that “the only way to build a scalable perps DEX is to build an L1 from scratch.” ".

Revolving around the demand for high-frequency trading on the chain, Hyperliquid turned to L1 construction and classified DEX as the flagship product of this L1. Currently, the Hyperliquid L1 mainnet can support 100,000 orders per second. According to official reports, this data is expected to increase to millions per second in the future. Even judging from the current rate, 100,000 TPS is still the fastest among all public chains.

"Most L1s build infrastructure and hope that others will build killer applications. Hyperliquid takes the opposite approach: polish local applications first, and then develop into general infrastructure." Jeff Yan explained on social media about Hyperliquid route thinking.

Has generated 35 million US dollars in revenue, and the market value of points exceeds 200 million US dollars

Hyperliquid has not accepted any external funds. The team said: "This allows the team to focus on building products they believe in without external pressure."

But no financing does not mean that Hyperliquid has no airdrops to win. Since November 2023, the points program launched by Hyperliquid has attracted a large number of users to participate. The platform will issue a certain amount of points every week, and the points will be awarded in proportion to the user’s transaction volume. Distribution, users who obtain points can be rewarded with platform income.

Data as of July 25, 2024 show that Hyperliquid’s Hyperliquidity Provider generated a total of $34.94 million in revenue, mainly from providing liquidity, performing liquidation, and collecting platform fees. Users can deposit funds into this liquidity pool to earn income.

This model is similar to the trading mining that was popular in various exchanges a few years ago. However, from CEX to DEX, the trading mining idea is still very popular in the community.

In addition to official liquidity income, Hyperliquid also allows the creation of personal vaults. Any user can create a personal vault (similar to an on-chain private equity fund), and other users can choose whether to deposit funds based on past trading performance. The creator gets 10% of the profits. Of course, this kind of investment is also full of risks. 4 of the 10 vaults with the highest TVL volume are showing losses. However, this model of directly handing money to smarter people still attracted a lot of funds. A fund pool with an annualized return of 727% attracted more than 1 million funds.

As of now, Hyperliquid has not issued an official governance token. Points have become a potential asset for platform revenue. Currently, the price of Hyperliquid points on whales.market remains at around US$4.4. According to statistics from community members, a total of 51.06 million points will be issued. Based on this number, the market value of the points has reached US$224 million.

The MEME coin effect has not yet appeared

PURR is the first local token on Hyperliquid to implement the HIP-1 standard, a MEME coin with the image of a cat. The token did not undergo an initial sale, but 50% of the tokens were airdropped to users according to the points holding ratio, and the remaining 50% was added to the PURR/USDC fund pool. (Subsequently at the community’s suggestion, 40% of the tokens were destroyed). As of July 25, PURR had a market capitalization of approximately $110 million, making it Hyperliquid’s highest-valued token, with prices rising approximately 10-fold since its release. The second-largest token in terms of market value is BIGBEN, with a market value of approximately US$28.5 million. It is a MEME coin with the theme of Big Ben. It has increased by about 2 times since its opening.

HFUN is Hyperliquid’s highest-rising token, with a market value of approximately US$25 million and a maximum increase of more than 100 times. In addition, the market value of other native tokens on the Hyperliquid chain does not exceed US$10 million.

As of July 25, 2024, the number of native tokens on the Hyperliquid chain is not large, with only 44 trading pairs. And most of them are MEME tokens. Hyperliquid's MEME currency is still not a mature platform, and its 24-hour transaction volume on the chain is about 10 million US dollars.

Relying on the action of giving back all the revenue to the community, Hyperliquid has also attracted more and more users to participate in platform transactions. According to data from DeFiLlama, as of July 25, Hyperliquid’s TVL was US$430 million. In derivatives The product category ranks fourth, second only to GMX, Jupiter, and DYDX. According to official data, Hyperliquid has 183,000 users and a 24-hour transaction volume of US$1.5 billion.

But this does not seem to be Hyperliquid’s goal. According to a report on Hyperliquid by Protecc Labs, Hyperliquid believes that its real competitors are not other derivatives exchanges, but Binance and Solana Chain. The founder of Hyperliquid believes that “Solana and Binance have both become giants in their respective fields and provide extremely attractive environments for their respective target audiences. Hyperliquid solves a huge problem on Solana, which is on-chain order books and fragmented flows. It requires SOL as the fuel for transactions. At the same time, it also solves a huge problem of Binance, which is decentralization (access to the best products without strict KYC/AML).”

In terms of this goal, Hyperliquid has a grand enough narrative, but whether this goal can be achieved still requires Hyperliquid to come up with more trump cards.

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