A new Altcoin called Hyperliquid (HYPE) is rapidly making waves in the crypto market, currently ranking as the 28th largest cryptocurrency by market capitalization. This rise has seen HYPE surpass established currencies like NEAR Protocol (NEAR), with its value skyrocketing 204% in just two weeks, reaching a market cap of around $89.3 billion.
Exploring the Hyperliquid Protocol
Researching the product of Altcoins is crucial to better understand the increasing attention it has received in the past week.
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HYPE is the native token of Hyperliquid, a Layer 1 (L1) blockchain that utilizes HyperBFT technology. Reports indicate that this tool allows Hyperliquid to facilitate "fast, secure, and transparent transactions", bridging the gap between centralized exchanges (CEX) and decentralized exchanges (DEX).
Specifically, Hyperliquid addresses the performance limitations typically associated with other blockchains (such as Solana (SOL) and Ethereum (ETH)) by processing over 100,000 transactions per second with latency under one second.
The token economics of HYPE include a burning mechanism to control supply and support price stability, a common practice in tokens like Shiba Inu (SHIB). A strict vesting schedule has also been implemented to balance liquidity and mitigate sell pressure.
The token offers various utility options for investors, including trading fee discounts, staking opportunities, and governance participation. HYPE holders can enjoy reduced transaction fees, significantly boosting profitability, while staking the tokens can earn them rewards or provide liquidity in trading pools.
Will New Listings and the Launch of HyperEVM Fuel the Hype?
Crypto analyst Ericonomic's latest insights also highlight several compelling reasons why, despite short-term adjustments, the L1 Altcoin HYPE can continue to be viewed positively.
The analyst points out that Hyperliquid's USDC stablecoin deposits have reached a historic high, indicating strong demand, while auction prices have also hit unprecedented levels, with well-known entities like MON Protocol making significant purchases.
The surging USDC holdings on Hyperliquid demonstrate robust liquidity. Additionally, many savvy traders have invested millions of dollars in HYPE and publicly support the token, signaling confidence in its future potential.
Retail investors have not yet entered the market en masse, as HYPE is not yet listed on major centralized exchanges. If these traders focus their attention on HYPE's price, it could become a significant catalyst.
Ericonomic further compares HYPE to Binance Coin (BNB), noting that HYPE holders enjoy a fairer fee distribution, as all generated fees are directly returned to the Hyperliquid protocol.
Furthermore, the community anticipates several upcoming catalysts, including new listings on major crypto exchanges and the introduction of HyperEVM, which can significantly enhance the platform's functionality.
At the time of writing, HYPE has retreated from its December 12th all-time high of $42 and stabilized at $26.91. Despite this adjustment, the token's weekly gain still exceeds 105%, with a trading volume of $342 million. Looking ahead, whether there are enough catalysts to support the token after the recent correction remains to be seen.
