Hyperliquid's Dark Horse Journey: Unpacking the Rise of the On-Chain Derivatives Dominator｜Gate Research

Abstract

• Market Share Dominance and Rapid Growth Driving Industry Expansion: Hyperliquid holds an impressive 80% market share in the on-chain futures market, far outpacing its nearest competitor. This leading position has played a crucial role in expanding the entire on-chain derivatives market, with DEX’s share in global futures trading increasing from 2.7% at the start of 2024 to 8.22% in July 2025.

• Continued Strong Core Data: Despite experiencing a protocol attack, Hyperliquid’s TVL has rebounded to $478 million (as of July 17, 2025), with cumulative derivatives trading volume exceeding $1.98 trillion. Its single-day peak reached $18.9 billion, with annual revenue around $850 million, placing it among the highest earners in the on-chain protocol space.

• Whale Capital Drives Liquidity: Hyperliquid’s core liquidity is dominated by a small group of high-net-worth users. A total of 118 wallets with positions exceeding $50 million (Leviathans) control up to $6.82 billion in positions. Large wallets, such as Tidal Whale and Leviathan, are significantly more active than retail users, with over 87% and 92% of their positions remaining open.

• On-Chain CEX-Level Experience: Hyperliquid has achieved a near-CEX-level millisecond trading experience through its proprietary high-performance Layer 1 chain and native on-chain order book. It combines gas-free transactions, no-signature orders, and other user experience optimizations to ensure fully on-chain verifiability. By leveraging an open matching API, local simulated matching sandbox, up to 50x leverage, and extremely low fees (market-making 0.01%, taker 0.035%), Hyperliquid has successfully attracted top-tier professional market makers and quantitative firms.
• HYPE Airdrop Ignites User Growth and a Unique Growth Flywheel: The HYPE token’s initial airdrop totaled $620 million, drawing 94,000 addresses to participate. Over the next two days, 14,619 new addresses were created—surpassing the previous monthly total—highlighting the massive success of its incentive strategy. This success, combined with a precise “anti-VC” narrative, high leverage, extreme fee structure, and the HIP-1 auction mechanism, has built a powerful user growth engine and market recognition system.

• Whale ‘Living Advertisement’ Effect: The transparency of on-chain position information makes whale positions impossible to conceal. Well-known traders like James Wynn openly showcase large positions, attracting follow-up capital and generating a “position—sentiment—price” positive feedback loop.
• Strategic Expansion and Token Utility Enhancement: The launch of HyperEVM has attracted numerous DeFi projects to deploy, expanding the use cases for the HYPE token (e.g., paying gas fees, lending, staking), and bringing in additional fee income. This has created a positive cycle of HYPE’s value and platform ecosystem expansion.

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