All Aboard the HYPE Train; Initiating Coverage of HYPD and PURR at OW
Core thesis
- Hyperliquid is the leading perp DEX with strong performance and growing volumes/fees; in YTD 2025 it generated about $874m in fees
- Assistance Fund uses ~99% of protocol fees to repurchase HYPE, more volume → more fees → more buybacks and potentially lower circulating supply
- They also argue competitive fears are overblown: competitor volume can be inflated by points/airdrop incentive behavior
What each company does
- HYPD: owns HYPE and monetizes via validator, staking and HIP-3 (trades around 1.14x “fully adjusted” mNAV)
- PURR: bought 12.6m HYPE using proceeds from a $1.65bn PIPE; “institutional” way to access HYPE
Key risks
- Both are leveraged bets on HYPE
- HYPD execution risk: thesis depends on the ability to raise capital to buy more HYPE; if it can’t (or mNAV falls), the strategy breaks
- Centralization / governance risk on Hyperliquid: the March 2025 JELLY incident ended with validators voting to delist and force settlement at a pre-manipulation price—good outcome for users, but highlights “decentralization” tradeoffs
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