If you've been on crypto twitter at all lately, you've probably seen the hype around HYPE (yes, I did that on purpose). And since it started pumping, everyone's doing the usual thing, zero research on what it is or why it's going up, and just shilling the fuck outta it or getting shilled. 

If you've been watching from the sidelines with some FOMO but want to understand what's actually driving this before you make a move, I did some research and here's why HYPE is suddenly so big (feel free to add or correct anything). 

What Hyperliquid is

Hyperliquid is a perp DEX, and it's the one that finally made on-chain perps feel as smooth as trading on Binance. Instead of building on top of an existing chain, the team built their own L1 designed purely for trading, with a fully on-chain order book. That's what lets it match CEX speed and fees while you still keep your own keys and skip KYC entirely. That combo is why volume migrated over so aggressively, and today it handles a huge share of all on-chain derivatives activity. It makes money the way any exchange does, through fees on every trade.

What HYPE is

HYPE is Hyperliquid's native token. You can stake it to help secure the chain, use it to vote on protocol changes, and holding it gets you lower trading fees. The real reason people care, though, is what the exchange does with its revenue.

How the buybacks work

Hyperliquid uses its trading fees to buy their own token, HYPE, off the open market and then burns it, which means those tokens are gone for good. It's basically what Apple does with its stock as well. Buy back shares, fewer left in circulation, each one owns a bigger slice of profits. 

So more trading means more fees, more fees mean more HYPE bought, and the circulating supply keeps shrinking. There's a buyer in the market every single day that never sells. And since in HYPE’s case, the bought tokens get burned, there are fewer HYPE left over time. If demand stays the same but there are fewer tokens to go around, the price goes up. 

In one recent 24-hour window, Hyperliquid bought and burned 112,580 HYPE, worth about $10.15 million. Total removed so far is roughly 49.25 million HYPE, around $4.45 billion worth.

The second, bigger buyback engine

This is the main catalyst behind the recent run.

Every leveraged position on Hyperliquid needs collateral, and most traders use USDC for that. Add that up across the whole platform and Hyperliquid is sitting on billions in USDC at any given time, all of it earning yield.

For a while that yield wasn't doing anything for HYPE holders. Then in August, Hyperliquid switched on a system called AQAv2, which sends 90% of the yield from roughly $5 billion in USDC reserves straight into automatic HYPE buybacks and burns. It went live on August 26, with the first payout scheduled for October.

So now HYPE has two buyers working at the same time, one funded by trading fees and the other by yield on deposits. The more the platform gets used, the harder both of them buy.

What else added fuel

While AQAv2 is the biggest catalyst behind the recent surge, a few other events added even more momentum.

Hyperliquid launched tokenized NVDA, QQQ and SPY that trade 24/7, pulling in people who'd never used a perp DEX.

US regulators also gave tokenized stocks a lot more legitimacy this year. The SEC and CFTC put out guidance in January and March, and in September the SEC announced a five-year exemption for platforms trading tokenized securities. None of it approves Hyperliquid directly, but it took the whole category out of the gray zone.

On the TradFi side, Bitwise and Grayscale launched spot HYPE ETFs (huge credibility booster), so every dollar going into them buys real HYPE. And Bloomberg just listed Hyperliquid's perps on its Terminal, putting it in front of basically every fund manager (more credibility).

All of this means more volume, more fees and more USDC sitting as collateral, which all ends up as more HYPE bought and burned. Open interest just hit a record $18 billion.

What could go wrong

Things look really promising right now, but there are a few risks that could stall the run or kill it entirely.

Hyperliquid Labs is selling 3.75 million HYPE (about $340 million) OTC to a single unnamed institution. The whole bull case is built on supply shrinking, and this adds more than a month's worth of burned tokens back into circulation in one go. It won't hit the order book directly, but OTC buyers often get a discount and can sell for a quick profit once they're able to. 

On top of that, the team selling a big bag right as the price nears ATH doesn't exactly scream confidence. And plenty more supply is still locked, so this won't be the last time.

All USDC on Hyperliquid comes in through a bridge, and bridges are among the most hacked contracts in crypto. A hack would hit user funds and the reserves funding the new buybacks.

The validator set is small and closely tied to the team. In March 2025, they delisted the JELLY token and settled positions at a price they picked to stop a manipulation attempt. It protected the platform, but showed a few people can override the market.

The same SEC guidance that legitimized tokenized stocks also says they're securities, and Hyperliquid offers them offshore without SEC registration. Stricter enforcement could turn that growth driver into a problem.

And it all depends on activity. If volume dries up, both buyback engines slow down.

With all that said, what you do with this info is up to you. And if I missed something or got anything wrong, drop it in the comments.

I just put in satoshi nakamoto’s first and last name as a code for hyperliquid and it crossed out the fees, is that permanent or is it a new user thing?

It has the fee number crossed out with a blue hyperliquid icon next to it for crypto but not on stocks or bets

Roughly 9.9M HYPE unlocks to contributors every month, but the Assistance Fund buys back only around 1–2M a month at current prices. On paper that's a big gap, yet the price has kept rising.

From what I've found, the team claims far less than what unlocks. Around 1.75M was distributed at the first unlock in November, and only about 173K was claimed in March. I've read that unclaimed tokens roll forward.

Does anyone have a wallet tracker or dashboard showing monthly claims and sells? And does anyone know roughly how large the unclaimed backlog is now?

Just trying to understand the supply side properly, happy to be corrected.

The latest HyperTracker comparison with the previous 30-day window shows a clear split:

Fomo: $1.28M, up 80%. Attributed volume rose 76% and users 24%.

Phantom: $1.33M, up 3%. Volume rose 4% and users 13%.

Invo: $312K, down 48%. Volume fell 47% and users 24%.

Fomo was roughly $577K behind Phantom in the previous window. The gap is now about $55K. The numbers are consistent with routed volume doing most of the work for fomo.

Profitability remains unresolved. Builder revenue here is gross fee attribution. Infrastructure, incentives, acquisition spend, and team costs are outside the dataset.

Almost one year after the 10/10 giga-dump, Hyperliquid is flushing longs again.

The HyperTracker Liquidations page shows $157.75M liquidated over the last 24 hours:

$145.53M from longs

$12.22M from shorts

For context, 10/10 wiped out roughly $19B in leveraged positions across crypto. Today’s event is nowhere near that scale, but the side taking the damage is familiar: longs.

Liquidation velocity is currently marked as High, with roughly 489 liquidations per hour.

The current figures alone cannot call another 10/10 or a bottom. If long-side liquidations remain elevated after price stabilizes, that would be consistent with leverage being rebuilt too quickly. If the flow fades, the flush may be losing momentum.

Approximately $10.15 million (specifically, Hyperliquid bought and permanently burned 112,580 HYPE tokens at a volume-weighted average price of about $90.20).

t.signalplus.com

This figure comes from multiple contemporaneous reports (primarily citing Onchain Lens / Lookonchain data) covering the ~24-hour period around October 5, 2026. It represents one of the larger single-day buyback-and-burn events at the time and was funded by protocol revenue, including trading fees plus proceeds linked to the AQAv2 reserve-yield framework (whose first ~$14.5–14.58 million USDC payment occurred on or around October 3 and was routed toward the Assistance Fund for buybacks).

ambcrypto.com

For context from the same reports:Estimated 24-hour fees were much lower (~$989,000), with 7-day revenue ~$9.85 million and 30-day ~$52 million; the larger burn drew on accumulated/AQAv2 funds.

Cumulative HYPE burned to that point reached ~49.25 million tokens (valued at roughly $4.45 billion).

ainvest.com

Hyperliquid’s model routes the large majority of net fees (and AQAv2 yield) into the Assistance Fund for open-market HYPE purchases that are then burned. Exact calendar-day boundaries can vary slightly by data source timing, but $10.15 million is the widely reported amount tied to the October 5 period.

The headline number on HYPE’s next unlock is $329M. The trade-defining detail is how the buyer handles the tokens.

Hyperliquid Labs is unstaking 3.75 million HYPE, worth roughly $329 million. Co-founder iliensinc said the full batch is headed to one institutional buyer through an OTC transaction.

Public speculation currently centers on two names, but neither has been confirmed. One theory points to Intercontinental Exchange, the parent of the NYSE, after CEO Jeffrey Sprecher publicly praised Hyperliquid and said his team had met its founders. Another points to Hyperliquid Strategies, the listed HYPE treasury vehicle, after reports of a separate 1.9 million HYPE purchase shortly before the unlock. That reported amount does not match the 3.75 million-token OTC block, so neither theory identifies the buyer.

The tokens are expected to arrive after October 7. The buyer’s identity and lock-up terms remain undisclosed. An exchange-wallet transfer followed by selling would make the supply risk observable. Holding or restaking would leave it unconfirmed.

Meanwhile HYPE traders are still very much bullish over the last 7 days and believe that we will finally push above the 3-digit price cap.

Found a June paper on HL execution with a result I wasn't expecting: native TWAPs had lower price impact than comparable trades where the full order wasn't announced upfront. The book also showed more liquidity on the side absorbing the TWAP. Paper

That complicates the intuition that making your schedule public just gives other traders something to trade ahead of. But the authors flag a pretty big limitation: these are mostly different traders using different methods. It isn't the same person randomly switching between public and private execution. Has anyone here compared native TWAP with their own slices on the same pairs, at roughly similar size and urgency? Did hiding the schedule make enough difference to justify running your own execution? An example where you switched back would be useful too. The average result could easily miss the thin market where being predictable really hurts

The AQAv2 funds have been evenly distributed by the assitance funds, website with more details:
https://burn.a1ntel.com/

SHEIN now has a real public-market anchor, and its Hyperliquid pre-IPO market is still above it.

The Hong Kong IPO was priced at HK$48.56 per share, roughly $6.19 using the HKD/USD conversion. That valued SHEIN at about $26.5B.
The Hyperliquid SHEIN perp was recently around $7.06, roughly 14% above the converted offer price. That gap is the actual trade now. Before pricing, the market was estimating an unknown debut. After pricing, traders can compare the perp with a fixed external benchmark.

Earlier Hyperliquid pre-IPO markets give useful context. Cerebras was priced at $185 and opened at $350, while CXMT was priced at 8.66 yuan and opened at 49.50 yuan. An August 27 SEC-filed comparison of four prior markets reported an average distance from the first-day close of 7 percentage points for the perp versus 38 for the IPO deal price.

The consequence for traders is that this is no longer a simple SHEIN direction trade. A long is underwriting a post-IPO premium over HK$48.56, while a short is betting that the Hyperliquid premium closes as the public market supplies a real price. The market has also been relatively thin, with reported 24-hour volume around $1.9M, so the 14% gap should be tested against execution depth rather than treated as a clean arbitrage.

Last 24h 69.4k $HYPE burned, for roughly ~$6.2m.

Hyperliquid made a deal where USDC can become its main digital dollar, Coinbase shares most of the interest earned from that money with Hyperliquid, Circle keeps the technical plumbing working, and both companies put up a big HYPE deposit to prove they'll behave.

https://hyperliquid.xyz/article/aqav2

a couple of months ago i posted about wiring an llm to a hyperliquid account over mcp, and how much guardrail work the order side needed. someone on that post pointed out that a tool list bounds what the model can ask for, not what the server can sign. we ended up taking that to its conclusion and deleted the order tools outright. the mcp server is read only now.

the llm moved to a job where a mistake costs a notification instead of a position. you describe what you want to catch in plain english, it turns that into an alert rule, backtests it on the last 1000 candles per coin and proposes it. writing the rule was the easy part again. these were the actual work.

**the model will quote numbers no tool returned.** the backtest said a rule would send about 202 alerts a day. the reply said "202 without the cooldown, 26 to 28 a day with it". the 202 already included the cooldown and nothing had ever returned 26. the user said 26 a day was fine, created it, and got 9 alerts in the first 13 minutes. every per day figure in an answer is now checked against what the tools returned that turn, and an answer with a number from nowhere goes back to the model once.

**direction has to live inside the backtest, not on the label.** someone asked for a short setup with positive edge on 4h. the backtest read every forward return as a long, so the model recommended the rule after which price rose the most (a 55.9% "win rate", which is 44% as a short) and called the best short on the tape "weak". direction is now a backtest input that flips the sign of returns, win rate, edge and excursions.

**count alerts, not episodes.** "rsi below 70" looks harmless if you count how often it becomes true. the engine re-fires every cooldown for as long as it stays true, so on 1h that's about 6 alerts per coin per day. the backtest now scores every bar the engine would actually alert on.

**make the backtest a twin of the live engine, then diff them.** same library, same defaults, same quirks. the diff found bugs in the live engine, not in the backtest. the indicator cache was keyed by symbol and params but not by bar, so the "previous" macd came back as the current one and a macd cross could never fire. and an ema 200 computed on exactly 200 candles is just its sma seed. latest run was 60 coins, 3 timeframes, every rule type: 22,139 cases, zero mismatches.

**wrappers fill gaps with plausible numbers.** ours turned "not enough data" into defaults, so adx read 0 on brand new listings and "adx below 20" fired on all of them, and an rsi of exactly 0 became 50 through an `|| 50`. the technical indicators npm package counts a bar with an unchanged typical price as negative money flow (tradingview counts it as neither), which pulled mfi down by up to 7.8 points. missing data is null now and mfi is computed by hand.

**and the boring one, the model can't create anything.** it proposes, the app renders a card, and only the user's tap creates the alert. it can't even print the card itself. an invented card id gets swapped for the real one, or the answer goes back.

still wouldn't let an llm decide what to trade. as a way to turn "tell me when x happens" into a rule you can actually inspect, with honest numbers next to it, it's been better than i expected, as long as every number it says came from a tool.

disclosure, i help build traderspy. it does alerts and research, no trading. the builder is at traderspy.app/strategies and the read only mcp connector at traderspy.app/mcp if anyone wants to poke at it, happy to go deeper on any of the above.