Hyperliquid (HYPE) Growth Story Meets Activity Slowdown: Report

Hyperliquid brought in fees of $153.8 million, slightly lower in the quarter but higher year-over-year, with almost all of the revenue used for HYPE buybacks.

Hyperliquid’s HYPE token is up 80% over the past 90 days, significantly outpacing Bitcoin’s 10% gain over the same period. This price movement comes against the backdrop of a market witnessing geopolitical turmoil.

However, the data shows that fundamentals have diminished compared to HYPE’s valuation.

Momentum of cooling derivatives

In his latest report, cryptocurrency analyst Michael Nadeau He said Investors are increasingly “paying” for every dollar of revenue, with the currency’s fully diluted price-to-sales ratio reaching 47.3, up 67% QoQ and approaching record levels. This is an uncommon trend during periods when valuations typically shrink.

Over the past 90 days, Hyperliquid’s perpetual DEX generated $153.8 million in fees, down 13% from the previous quarter but up 12.3% year-over-year, with 99% of those fees used for HYPE buybacks. Average daily trading volume reached $7.07 billion, after rising 6% quarter-on-quarter, while open interest fell to $7.6 billion, down 51% from its peak and around 15% over the same period.

The protocol continues to lead among decentralized perpetual exchanges with a market share of 72%, although it represents about 5% of the total volume when including centralized platforms. In terms of capital inflows, $3.36 billion has currently been bridged into Hyperliquid, which is down 44% from its peak. Furthermore, $730 million has left the network over the past 90 days, including $500 million since early April.

Mixed signals

Activity metrics depict mixed trends. Active addresses, for one, averaged 46,000 per day, up 6.6% QoQ, coupled with strong growth in HIP-3, a framework that allows third parties to launch their own perpetual DEX operations.

HIP-3 volumes averaged $2.58 billion per day, up 973% QoQ, and representing 36% of total volume. Meanwhile, the HyperEVM ecosystem posted revenue of $1.84 million during the period, down 33% QoQ, with active addresses also down.

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In terms of token dynamics, buybacks have been larger than issuance over the past 90 days, leading to a net contraction, while TC token openings are ongoing through 2027. The report also found that the buyback yield has fallen to 2.55% on a fully diluted basis.

Certain areas reveals Strong expansion, while others reflect cooling activity. As a result, the price of the token has risen faster than the actual growth of the project’s usage and revenue, while different parts of the system are growing at different speeds.