Hyperliquid, which has a dual identity as an EVM public chain and a DEX, has finally released its airdrop in recent days. This project, which boasts of having no VC background, distributed 31% of its tokens in a single airdrop, and the price has been soaring since its launch. In 2024, when many airdrop enthusiasts are generally being dumped, the Hyperliquid airdrop distribution may be considered a successful case. The current market capitalization of the token has also surpassed that of the veteran on-chain derivative exchange dydx and the Solana chain's Jupiter.
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Toggle31% Token Genesis Airdrop, HYPE Soars Without Selling Pressure
On November 28, Hyperliquid officially announced the airdrop-related announcement. The HYPE token TGE occurred at 07:30 UTC on November 29, and Hyperliquid itself is the only trading venue, not providing any tokens to exchanges for listing fees.
Looking at the token economics:
38.888% for community rewards
31.0% for the genesis airdrop
23.8% for core contributors
6.0% for the Hyper Foundation's budget
0.3% for the community grants
0.012% for HIP-2 (can be understood as Hyperliquid providing liquidity)
Hyperliquid is a high-performance Layer 1. It has its own Proof-of-Stake consensus algorithm called HyperBFT. It can process 200,000 transactions per second, and the final confirmation time is about 0.2 seconds. HYPE will be used to pay for on-chain gas fees and PoS staking.
The announcement emphasizes that there is no allocation for private investors, centralized exchanges, or market makers, which is in line with the narrative against VCs and centralized exchanges collecting listing fees that has emerged in the second half of this year. The core contributor tokens will be locked for 1 year. Most of the unlocking will occur between 2027 and 2028, with some continuing after 2028. It is worth mentioning that Hyperliquid co-founder Jeff Yan previously worked at Hudson River Trading, so he is quite familiar with high-frequency market making.
The Less Crowded, the More I Love It, HYPE's Point System Benefits Early Users
Let's take a closer look at Hyperliquid's airdrop plan. Hyperliquid's first-stage point plan started on November 1, 2023, with 1 million points distributed to active users weekly. The allocation is determined by trading volume. The first-stage snapshot points will be distributed on April 15, 2024. Initially, Hyperliquid did not have much Chinese mention, so the points in the first few weeks were relatively less competitive. If you miss this stage, retail investors may not be able to compete with whales and market makers later on.
The second stage is to distribute 700,000 points per week for four months. In the announcement on May 29, the official stated that the points would be doubled for the activity period from May 1 to 28. The first snapshot time point of the second stage covers May 29 to June 4. Additionally, Hyperliquid has a referral code system, and the official also announced that they would severely punish witch addresses before the airdrop.
HYPE Splashes $1.8 Billion, Becoming the Largest Airdrop This Year
Before the deadline, the HYPE token price has been soaring since the TGE, reaching around $8.24 before the deadline, with an FDV of $8.24 billion and a circulating market cap of $2.79 billion, all from the airdrop allocation. In comparison, the FDV of dydX is around $1.28 billion, and the FDV of Jupiter is $11.66 billion. However, some believe the token's trading is limited to Hyperliquid itself, and the price may be somewhat inflated.
From another perspective, Hyperliquid chain's TVL is $1.43 billion, ranking 10th among all public chains. For a public chain that has emerged in just one year without institutional funding, this is no easy feat. In addition to the fact that they announced from the beginning that there was no VC involvement, leaving no tokens for market makers and exchange listing fees, these features are exactly what retail investors are looking for. The generous distribution of 31% of the tokens to airdrop participants is essentially building good relationships with the community and creating buzz for the protocol, but the 31% airdrop will also face considerable selling pressure in the future.
The Crypto Research team also pointed out that Hyperliquid has become the project with the largest airdrop allocation after its TGE, with an airdrop of $1.8 billion worth. In comparison, Starknet's was $1.6 billion, Arbitrum's was $1.5 billion, dYdX's was $1 billion, Wormhole's was $1 billion, and Eigenlayer's was $850 million.
The recently announced token economics of Movement also stated that they will provide 10% of the tokens for airdrops, and it will be interesting to see how much wealth creation this can generate. However, a former Scroll researcher also hinted that Movement is providing a large amount of tokens to exchanges as listing fees, although this has not been confirmed yet, but it also constitutes a warning.
