Hyperliquid is experiencing a significant increase in its trading activity, yet this surge is negatively affecting the revenue that supports its HYPE token.
Despite a record high in open interest, revenue has declined for four consecutive quarters. A fee-sharing initiative is diverting half of the platform's trading volume to external developers.
By Shaurya Malwa|Edited by Cheyenne Ligon
1 hr ago
4 min read
Hyperliquid has seen unprecedented levels of contract trading, but it is retaining a smaller portion of the earnings generated from those contracts. As of July 13, open interest—representing the total value of leveraged positions held by traders—rose to over $11 billion, marking the highest level for the platform in 2026. In the past 30 days, Hyperliquid's perpetual futures volume reached nearly $178 billion, allowing it to account for about 9% of all open perpetual positions globally, including those on centralized exchanges, compared to less than 7% in late May.
Conversely, Hyperliquid's revenue trajectory has been downward. Gross revenue peaked at approximately $357 million in the third quarter of 2025, but has continuously decreased, with figures dropping to nearly $295 million, around $217 million, and about $202 million in the second quarter of 2026, according to DefiLlama data. This represents a 43% decline from its peak, occurring amid rising trade volumes.
The Hyperliquid Improvement Proposal (HIP-3) elucidates why the platform is capturing a smaller share of its increased activity. Since October 2025, individuals staking 500,000 HYPE—valued at about $28 million—can launch their own perpetual futures markets on Hyperliquid, retaining up to half of the trading fees generated.
At the beginning of 2026, these markets constituted roughly 2% of Hyperliquid's perpetual volume, but they now represent about half of it. This shift is reflected in the platform's financials. The cost of revenue, which accounts for the fees Hyperliquid returns to builders, market makers, and its liquidity vault, was below 6% of gross revenue in Q2 2025; a year later, it surged to 18%.
Builder code fees, which front-end applications like Phantom charge for order routing, generated approximately $16 million in revenue for the second quarter, while the same amount was recorded as an expense. Every dollar of this fee is fully passed through.
Traders are drawn to the offerings in these builder markets. Real-world asset perpetuals, which include contracts for crude oil, gold, Nvidia, Tesla, a Nasdaq-100 tracker, and pre-IPO companies like SpaceX, reached a record $3.6 billion in open interest this month, surpassing Bitcoin to become the platform's largest market by that metric.
From July 13 to July 19, tokenized stocks and commodities accounted for $25 billion in volume, representing 52% of the total for that week, marking the first time they outperformed crypto perpetuals. These contracts are settled in stablecoins, do not expire, and can be traded during weekends, even when the New York Stock Exchange is closed. For example, leveraged exposure to Nvidia can be traded at 2 a.m. on a Sunday, a rarity in the market.
However, this growth is heavily reliant on a single entity. Trade.xyz accounts for over 90% of all HIP-3 open interest, meaning Hyperliquid's record performance hinges on the oracle choices, margin settings, and risk management of this one deployer.
The risks associated with this concentration became evident earlier this week, when a single trade on a limited Korean pre-market platform caused a 19% drop in Trade.xyz's SK Hynix contract, leading to liquidations that the firm has since pledged to cover.
Hyperliquid directs approximately 97% of its trading fees into its Assistance Fund, which purchases HYPE tokens on the open market and removes them from circulation, having withdrawn around 44.5 million HYPE from the total supply thus far. This buyback is a fixed percentage of earnings, meaning it decreases when earnings fall. The fund acquired nearly $290 million of HYPE in Q3 2025, but only about $149 million in Q2 2026, nearly half as much.
As of Friday, HYPE was trading near $55, reflecting a 5% decline for the week and approximately 28% below its record of around $77 reached on June 16, according to CoinDesk data. With annualized earnings of about $785 million, the token's valuation stands at roughly 16 times its circulating market value and about 70 times the fully diluted value.
Institutional investors, including Multicoin Capital and Bitwise, have recently transferred significant amounts of HYPE to exchanges.
The ecosystem surrounding HYPE appears less robust than its top-15 ranking suggests. Among the 48 tokens tracked in the Hyperliquid category by CoinGecko, HYPE constitutes nearly all of the value. The next two tokens, Ethena's USDe at approximately $4.5 billion and USDT0 at about $4 billion, are stablecoins issued elsewhere and bridged in. The largest natively built token, PURR, is valued at about $53 million, less than 0.5% of HYPE. The market continues to assess HYPE primarily based on Hyperliquid's exchange dynamics rather than a wide array of native applications.
On the regulatory front, challenges are also mounting. Nearly 10 million HYPE tokens were unlocked for core contributors on August 6, valued at about $550 million at current prices, part of a monthly release schedule extending through 2027, against a circulating supply of just 222 million.
Spot HYPE ETFs recorded their first weekly outflow of about $7 million for the week ending July 17, ending a nine-week inflow streak. In late June, Singapore's Monetary Authority added the platform to its investor alert list, following prior warnings from the U.K., while executives from the CME and ICE have urged the CFTC to review its commodity perpetuals.
Additionally, competition has emerged from unexpected sources. The recently launched Robinhood Chain is clearing over $600 million in daily decentralized-exchange volume from memecoin trading, and by some metrics, it is now attracting more daily speculative activity than Hyperliquid.
However, this does not imply that Hyperliquid is failing. Research from ARK indicates that Hyperliquid and Pump.fun together accounted for 67% of all crypto application revenue as of July 31. Grayscale has likened the platform to Amazon Web Services, where external developers create products while the operator takes a share of all trades.
This analogy underscores a concern. Hyperliquid reported around $45 million in gross revenue during the first four weeks of the third quarter. If this trend continues, it could lead to a quarterly total of approximately $150 million, marking a fourth consecutive decline and further weakening the demand for HYPE.
Latest Crypto News- 1Bitcoin investors pour $853 million into spot ETFs. BlackRock’s IBIT claims the bulk1 hr ago
- 2Crypto is going through a massive dot-com style shakeout as over 100 projects fold in 20263 hrs ago
- 3Controversial Bitcoin fork BIP-110 mines two blocks, then stops10 hrs ago
- 4Bitcoin hits block 961,632 as the controversial BIP-110 soft fork attempt begins19 hrs ago
- 5Hardware wallet sales in Russia more than double as new crypto rules near22 hrs ago
- 6Brazil's central bank orders exchanges to delay large crypto transfers abroad1 day ago
- 7Trillions in institutional money to flow into bitcoin, says Bitwise's Matt Hougan1 day ago
- 8Why trillion-dollar asset manager T. Rowe Price put memecoins in its crypto ETF1 day ago
- 9U.S. Senate opens first stage of crypto Clarity Act voting to give bill a chance next month1 day ago
- 10Another Bitcoin infrastructure exploit hits, this time draining Lightning payment servers1 day ago
Building the Zcash Machine: Tachyon and Quantum Readiness
Building the Zcash Machine: Tachyon and Quantum Readiness
Zcash’s Tachyon upgrade aims to scale shielded payments, improve quantum readiness, and test whether its funding, security, and governance can hold.
By CoinDesk ResearchJun 30, 2026Commissioned byGenZcashZcash’s Tachyon upgrade aims to scale shielded payments, improve quantum readiness, and test whether its funding, security, and governance can hold.
Why it matters:
Zcash’s Tachyon upgrade aims to scale shielded payments, improve quantum readiness, and test whether its funding, security, and governance can hold.
View Full ReportMore From Finance