Hyperliquid sees a trading surge but faces declining revenue impacting its HYPE token, raising concerns about its market position.
Hyperliquid is witnessing a surge in trading activity, yet this increase is adversely impacting the revenue tied to its HYPE token.
Open interest reaches record highs while revenue declines for four consecutive quarters.
As of July 13, Hyperliquid reported its open interest exceeding $11 billion, the highest for 2026, with perpetual futures volume hitting nearly $178 billion in the last month. This surge has allowed Hyperliquid to capture about 9% of all global open perpetual positions, a rise from below 7% in late May.
In stark contrast, Hyperliquid's revenue has been on a downward trend. After peaking at approximately $357 million in Q3 2025, revenue has dropped to about $295 million and further down to $202 million in Q2 2026, marking a 43% decline despite increasing trade volumes.
The Hyperliquid Improvement Proposal (HIP-3) explains the shrinking share of revenue. Since October 2025, users staking 500,000 HYPE can create their own perpetual futures markets, retaining up to 50% of the generated trading fees. These markets, which began the year representing only 2% of Hyperliquid's perpetual volume, now account for nearly half.
This shift is reflected in the financials, with the cost of revenue—fees returned to builders and market makers—rising from under 6% of gross revenue in Q2 2025 to 18% a year later. The builder code fees generated roughly $16 million in revenue for Q2 2026, which was matched by expenses.
Real-world asset perpetuals have become increasingly popular, with contracts for commodities and stocks reaching a record $3.6 billion in open interest, surpassing Bitcoin. From July 13 to July 19, these assets generated $25 billion in trading volume, marking the first time they outperformed crypto perpetuals.
However, this growth is heavily dependent on a single entity, Trade.xyz, which accounts for over 90% of the open interest in HIP-3 markets. Recent market volatility highlighted this risk when a single trade led to a 19% drop in a contract, prompting Trade.xyz to pledge coverage for the ensuing liquidations.
Hyperliquid allocates around 97% of its trading fees to an Assistance Fund, which buys back HYPE tokens from the market. This buyback has seen approximately 44.5 million HYPE removed from circulation. However, the fund's acquisitions have halved from nearly $290 million in Q3 2025 to about $149 million in Q2 2026 due to declining earnings.
As of now, HYPE is trading around $55, reflecting a 5% weekly decline and approximately 28% lower than its peak of around $77 in mid-June. Institutional investors have recently moved significant amounts of HYPE to exchanges, signaling potential concerns about the token's stability.
Despite its top-15 ranking, HYPE's ecosystem appears less robust, as it dominates the value in its category, with the next largest token being a stablecoin valued at about $4.5 billion. The regulatory landscape is also becoming challenging, with 10 million HYPE tokens unlocked for contributors, valued at about $550 million, and recent warnings from the Monetary Authority of Singapore.
Additionally, competition is emerging from other platforms, including the Robinhood Chain, which has begun attracting significant trading volume. Nevertheless, research indicates that Hyperliquid remains a major player in the crypto application revenue sector, alongside Pump.fun, collectively accounting for 67% of the market as of July 31.
Looking forward, Hyperliquid's revenue for the first month of the third quarter is around $45 million, suggesting a potential quarterly total of about $150 million, which would mark a fourth consecutive decline and further pressure the HYPE token's demand.
