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A new altcoin, Hyperliquid (HYPE), is quickly making waves in the cryptocurrency market, now ranking as the 28th largest cryptocurrency by market capitalization. This rise has seen HYPE surpassed established coins such as Near Protocol (NEAR), whose value soared 204% in just two weeks, bringing its market capitalization to approximately $8.93 billion.
Exploring the hyperliquid protocol
Examining the altcoin’s offerings is essential to better understand the growing attention it has garnered over the past week.
HYPE is the native token of Hyperliquid, a Layer-1 (L1) blockchain that uses HyperBFT technology. This tool reportedly enables Hyperliquid to facilitate “fast, secure and transparent transactions,” bridging the gap between centralized exchanges (CEX) and decentralized exchanges (DEX).
Specifically, with the protocol’s ability to handle over 100,000 transactions per second and latency of less than one second, Hyperliquid addresses performance limitations commonly associated with other blockchains such as Solana (SOL) and Ethereum (ETH).
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HYPE tokenomics includes a burn mechanism to control supply and support price stability, a common practice seen in tokens like Shiba Inu (SHIB). A rigorous vesting schedule is also in place to balance liquidity and mitigate selling pressure.
The token offers various utility options for investors, including trading fee discounts, staking opportunities, and participation in governance. HYPE holders benefit from a reduction trading commissionswhich can significantly increase profitability, while staking tokens allows them to earn rewards or provide liquidity in exchange pools.
New Listings and Launch of HyperEVM to Increase HYPE?
Recent insights from crypto analyst Ericonomic have also highlighted several compelling reasons to remain bullish on HYPE despite any near-term correction for the Layer-1 altcoin.
Analyst notes that Hyperliquid posted an all-time high in Circle stable currency USDC deposits indicate strong demand, while auction prices have also reached unprecedented levels, with significant purchases made by major entities such as MON Protocol.
The total amount of USDC held on Hyperliquid has increased, demonstrating solid liquidity. Furthermore, many experienced traders have invested millions in HYPE and publicly support the token, suggesting confidence in its future potential.
Retail investors have yet to enter the market in a significant way, as HYPE is not yet available on Tier 1 centralized exchangesthis could be a notable catalyst for its price should the HYPE price garner significant attention from these traders.
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Ericonomic carried out further comparisons between HYPE and Binance Coin (BNB), highlighting that HYPE holders enjoy a more equitable distribution of fees, as all fees generated are redirected to the Hyperliquid protocol.
Additionally, the community predicts several upcoming catalysts, including new listings on major cryptocurrency exchanges and the introduction of HyperEVM, which could significantly improve the platform’s capabilities.
At the time of writing, HYPE has consolidated at the $26.91 level after a retracement from its record peak of $42, reached on December 12.
Despite this correction, the token still reflects substantial gains of over 105% on a weekly basis, accompanied by trading volumes of 342 million dollars. Looking ahead, it remains to be seen whether there will be enough catalysts to support the token following its recent correction.
Featured image from DALL-E, chart from TradingView.com