The dramatic rise of Hyperliquid’s native token, HYPE, has drawn significant interest from both DeFi traders and investors. By the end of 2025, HYPE reached an all-time high of $60, propelled by a blend of protocol enhancements, breakthroughs in capital efficiency, and a commanding presence in decentralized perpetual trading. This article explores how Hyperliquid’s (HYPE) deliberate market strategy—anchored in liquidity provider rewards and robust on-chain infrastructure—has established a strong argument for short-term investment.
Protocol Upgrades and Infrastructure: The Foundation of Growth
Hyperliquid’s technological progress in 2025 has been central to its rapid growth. The introduction of HyperEVM in February 2025, an EVM-compatible layer, alongside the existing HyperCore execution layer, enabled the platform to handle hundreds of thousands of transactions per second while upholding decentralization principles
according to Oak Research
. This two-layer system not only facilitates high-frequency trading but also boosts composability, making it easy to connect with other DeFi protocols. For liquidity providers (LPs), this setup minimizes slippage and enhances capital efficiency, leading directly to improved returns.
The Hyperliquidity Provider (HLP) initiative, which aggregates
USDC
to support order book liquidity and manage liquidations, saw its Total Value Locked (TVL) soar from $400 million at the beginning of 2025 to more than $5 billion by year’s end
according to Oak Research
. This growth was further fueled by the HYPE airdrop, which boosted participation and cemented HLP’s importance in the ecosystem.
LPs have earned an average annualized return of 11%
, with net profits climbing from $50 million to $68 million year-over-year
according to Oak Research
. These figures highlight the platform’s ability to reward liquidity providers while maintaining resilience in volatile markets.
Capital Efficiency and Market Structure: A CLOB-Driven Edge
Hyperliquid’s use of a central limit order book (CLOB) sets it apart from competitors. Unlike conventional automated market makers (AMMs), CLOBs allow liquidity to cluster near market prices, narrowing spreads and improving trade execution. This approach enabled Hyperliquid to capture 73% of the decentralized perpetuals market by mid-2025,
according to Oak Research
. The platform’s open interest (OI) exceeded $15 billion,
according to Oak Research
, rivaling major centralized exchanges, while TVL reached $3.5 billion as of June 30, 2025.
The CLOB’s transparency and rapid execution—made possible by Hyperliquid’s proprietary Layer 1 blockchain—have drawn both individual and institutional traders. By quickly listing new assets (such as the
Trump
memecoin
and PUMP token), Hyperliquid has become a prime destination for those seeking emerging opportunities,
according to Oak Research
. This creates a positive feedback loop: strong liquidity attracts more traders, which in turn benefits LPs, reinforcing the platform’s market position.
Expert Commentary and Institutional Adoption: Validating the Bull Case
Industry experts have highlighted Hyperliquid’s competitive strengths. A study by Oak Research notes that Hyperliquid supported $47 billion in weekly trading volume during the first half of 2025, peaking at $78 billion in a single week
according to Oak Research
. This level of activity, along with a 12% share of Binance’s trading volume, points to increasing institutional involvement. The establishment of the
HYPE Digital Asset Treasury (DAT) and collaborations with protocols like
Hyperion DeFi's HAUS have broadened the token’s utility,
according to Bitget
, drawing in capital from traditional financial institutions.
On-chain data further supports this outlook. By the third quarter of 2025, HYPE’s price ranged between $35 and $60,
according to Bitget
, showing sustained demand despite broader economic challenges. Cumulative HyperEVM transaction fees surpassed $150,000, and
trading activity surpassed $3 trillion
, reflecting strong network engagement. These indicators support a bullish perspective: as DeFi adoption accelerates, Hyperliquid’s CLOB model and LP incentives position it to capture a significant share of the market.
On-Chain Metrics and Competitive Dynamics
Hyperliquid’s market leadership is evident in the data. By mid-2025, it accounted for 6.1% of centralized exchanges’ trading volume and 17.8% of their open interest,
according to Oak Research
, effectively narrowing the divide between DeFi and centralized exchanges. Its low trading fees (0.02% for makers and 0.04% for takers) and fast asset onboarding have made it a top choice for traders seeking the speed of CEXs without giving up custody. Meanwhile, rivals such as
dYdX
and Dydx have struggled to match Hyperliquid’s transaction capacity and liquidity, further reinforcing its dominance.
Investment Thesis: Why HYPE is a Strategic Play
The intersection of protocol innovation, capital efficiency, and market structure forms a strong investment rationale for HYPE. The main factors include:
1. Scalable Infrastructure: HyperEVM and HyperCore deliver high-speed, low-latency trading, appealing to both retail and institutional participants.
2. Liquidity Provider Rewards: HLP’s 11% annualized yield and $68 million in net profits illustrate a sustainable approach to liquidity.
3. Market Dominance: With 73% of the decentralized perpetuals market and increasing institutional interest, HYPE is well-positioned for DeFi’s continued expansion.
4. Expanding Token Utility: The DAT and HAUS collaborations broaden HYPE’s applications, strengthening its value proposition.
Although challenges like regulatory risks and potential market manipulation remain, Hyperliquid’s transparent governance and solid on-chain performance help address these issues. For those looking to participate in the next wave of DeFi growth, HYPE stands out as a promising opportunity.
