How Hyperliquid ($HYPE) Delivered Most Lucrative Airdrop of All Time

At the end of 2024, social media feeds were raving about a certain crypto that which had pulled off the most extraordinary airdrop of the year.

HyperLiquid ($HYPE) — a blockchain that wants to “house all finance” — was praised for prioritizing early users and excluding venture capitalists (VC), centralized exchanges, and market makers from its airdrop.

HyperLiquid’s cult-like following, post-birth demand from VCs, and positive outlook for the project culminated in the HYPE token airdrop becoming the most lucrative airdrop in history, worth nearly $7.5 billion by the end of 2024.

What is HyperLiquid? Let’s find out.

Table of Contents Table of Contents

1. Key Takeaways
2. What Is Hyperliquid?
3. Hyperliquid Team: Harvard, CalTech & MIT Alumni
4. HYPE Tokenomics: No Allocation to Private Investors
5. The Bottom Line: Good Product and Fair Distribution
6. FAQs
7. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. What Is Hyperliquid?
3. Hyperliquid Team: Harvard, CalTech & MIT Alumni
Show Full Guide
4. HYPE Tokenomics: No Allocation to Private Investors
5. The Bottom Line: Good Product and Fair Distribution
6. FAQs
7. References

What Is Hyperliquid?

Hyperliquid is a layer one (L1) blockchain built to host decentralized finance (DeFi) applications.

According to official papers, Hyperliquid currently supports 100,000 orders per second. The L1 is built to be performant, recording every order, cancellation, trade, and liquidation with block latency of less than one second.

Hyperliquid is a delegated Proof of Stake (PoS or dPOS) blockchain that is secured by a consensus mechanism called HyperBFT.

According to a report by asset manager VanEck, the Hyperliquid blockchain is technically a “hybrid blockchain” that can be considered both an L1 and layer three (L3).

VanEck added that operating its own set of validators makes Hyperliquid an L1. However, since most of Hyperliquid’s trading capital is in USDC stablecoin, which is bridged from the Ethereum (ETH) layer-2 (L2) chain Arbitrum, Hyperliquid effectively becomes an L3 — depending on both Arbitrum and Ethereum for the state of USDC tokens.

VanEck said:

“This dual framework was chosen because it allows Hyperliquid to optimize its blockchain to process many more TPS than other blockchains while also giving Ethereum users a safer, more responsive bridge.

“The L1 architecture gives Hyperliquid a scaling advantage over competitors while the L3 framework gives Hyperliquid access to Ethereum’s massive base of users and assets.”

The Hyperliquid DEX, a fully on-chain order book perpetual futures exchange, is the project’s flagship application. Originally, Hyperliquid’s L1 was designed to be optimized for the Hyperliquid DEX. Low fees, transparent on-chain trades, up to 50x leverage, and one-click trading are some of its main features.

Although Hyperliquid had earlier announced in April 2023 that the project has no plans to “support general-purpose smart contracts” on the Hyperliquid L1, it is currently developing a general-purpose Ethereum virtual machine (EVM) called HyperEVM.

The HyperEVM is not a separate chain but rather secured by the same HyperBFT consensus as the rest of the L1. This lets the EVM interact directly with the native components of the L1, such as spot and perp order books,” said Hyperliquid.

Hyperliquid Team: Harvard, CalTech & MIT Alumni

Hyperliquid Labs is the core developer of the Hyperliquid project. The team is led by Jeff and iliensinc and comprises members from Harvard, California Institute of Technology, and Massachusetts Institute of Technology. Members of Hyperliquid Labs have also previously worked at Airtable, Citadel, Hudson River Trading, and Nuro.

The team initially worked on proprietary market-making in crypto in 2020, later expanding to develop DeFi solutions in 2022.

According to Hyperliquid’s official website, Hyperliquid Labs is a self-funded team and has not taken external capital.

E95: @HyperliquidX : How to Win in Crypto (By building for users, not VCs)@chameleon_jeff (aka "Jeff Basedzos") is the CoFounder & CEO of Hyperliquid Labs, the Company behind Hyperliquid

Hyperliquid is one of the most hyped L1s, includes a decentralized perpetual exchange with… pic.twitter.com/GMzZvlrH0X

— MR SHIFT (@KevinWSHPod) November 8, 2024

HYPE Tokenomics: No Allocation to Private Investors

HYPE is the native token of Hyperliquid L1. Its primary use case is staking and gas fee payment on HyperEVM.

Here are the key HYPE token tokenomics as of January 9, 2024

Here is how the HYPE token supply is allocated:

Hyperliquid said tokens allocated to core contributors will be locked for one year after genesis. The team added that most token vesting schedules will be completed between 2027 and 2028.

HYPE tokens were not allocated to private investors, centralized exchanges, or market makers, said Hyperliquid.

The Bottom Line: Good Product and Fair Distribution

In a year that saw the crypto community voice their anger over the high valuations of venture capital-backed tokens and the growing trend of “low float, high fully diluted valuation (FDV)”  in the market, Hyperliquid is a breath of fresh air in a crowded crypto airdrop market.

The project was rewarded for its egalitarian approach and has enhanced its cult status among the crypto faithful. But this would not have been possible without a good product to back its hype.

At the time of writing, the Hyperliquid DEX is the most popular perpetual futures DEX with a 24-hour volume of over $6.19 billion. Solana-based Jupiter came in second with a 24-hour volume of $983.2 million, according to DeFillama.

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