Hyperliquid’s On-Chain Dominance: Can the HYPE Price Continue Its Rally in 2025?

• What Is Hyperliquid and Why Is It Gaining Traction?
• How Did Hyperliquid Outperform Ethereum in On-Chain Revenue?
• The Buyback Mechanism: A Game-Changer for $HYPE?
• Governance Proposals Fueling Expansion
• Price Outlook: Where Could $HYPE Go Next?
• FAQs

Hyperliquid, a decentralized perpetuals trading platform, has taken the crypto world by storm in 2025. With a record-breaking airdrop, innovative tokenomics, and a buyback mechanism that’s shrinking supply, $HYPE is making waves. This article dives into Hyperliquid’s rise, its competitive edge over Ethereum, and why traders are betting on its long-term growth. From governance proposals to cross-market expansion, we unpack the factors driving $HYPE’s momentum—and whether it can sustain the hype.

What Is Hyperliquid and Why Is It Gaining Traction?

Hyperliquid is a high-speed decentralized exchange (DEX) built for perpetual contracts. Unlike traditional platforms, it offers gas-free trading, instant order execution, and deep liquidity—all without KYC or sign-ups. But what really sets it apart? A community-first approach. In early 2025, Hyperliquid distributed 31% of its $HYPE supply to over 90,000 wallets, ensuring broad ownership rather than VC concentration. This move fostered strong governance participation and kept engagement high. As one BTCC analyst put it, “Hyperliquid’s early distribution was a masterstroke—it turned users into stakeholders.”

How Did Hyperliquid Outperform Ethereum in On-Chain Revenue?

In July 2025, Hyperliquid’s on-chain revenue surpassed Ethereum’s—a milestone few saw coming. The platform’s daily fees hit $5 million, outpacing Solana and other Layer 1s. This isn’t just a flash in the pan; Hyperliquid is steadily eating into the order flow of giants like Bybit and OKX. Its secret? Faster execution, transparent governance, and a fee structure tied directly to $HYPE’s tokenomics. “It’s like Uniswap meets Binance, but with zero middlemen,” quipped a trader on Crypto Twitter.

The Buyback Mechanism: A Game-Changer for $HYPE?

Here’s where things get juicy. Hyperliquid’s buyback program, launched in January 2025, uses 97% of trading fees to repurchase $HYPE from the open market. So far, the fund has accumulated 28.5 million $HYPE (worth ~$1.3 billion). At current rates, Hyperliquid could buy back its entire circulating supply in 1.5–3.4 years. This creates a self-reinforcing loop: more trading volume → more buybacks → higher token scarcity. “It’s a deflationary beast,” noted a TradingView analyst. “If volumes hold, $HYPE could face a supply crunch by 2026.”

Governance Proposals Fueling Expansion

Hyperliquid isn’t resting on its laurels. Three key proposals (HIP-1 to HIP-3) aim to expand its reach:

• HIP-1: Lets communities bid in $HYPE for token listings, raising quality standards.
• HIP-2: Introduces AMM-like liquidity pools for deeper order books.
• HIP-3: Allows anyone staking $1M in $HYPE to create perpetual markets—even for commodities and stocks.

HIP-3 is the sleeper hit. If adopted, Hyperliquid could compete with TradFi giants like CME Group. Imagine trading Tesla or gold perpetuals—fully on-chain. “This isn’t just DeFi 2.0; it’s a bridge to Wall Street,” said a pseudonymous DeFi researcher.

Price Outlook: Where Could $HYPE Go Next?

After a 300% rally in Q2 2025, $HYPE may consolidate. But buyback pressure could floor prices at ~$45 (CoinMarketCap data).
If Hyperliquid captures 10% of CEX derivatives volume, $HYPE could test $100–$150.
Success with HIP-3 might propel $HYPE into the top 20 cryptos by market cap.

Of course, risks remain. A market downturn or drop in trading volume could weaken the buyback engine. As always, DYOR—this article doesn’t constitute investment advice.

FAQs

What makes Hyperliquid different from other DEXs?

Hyperliquid combines CEX-like speed with true decentralization. No gas fees, no KYC, and a governance model that rewards active users.

How does the buyback mechanism work?

97% of trading fees are used to buy $HYPE from the market, reducing supply and creating upward price pressure.

Can Hyperliquid really compete with centralized exchanges?

It’s already happening. In July 2025, Hyperliquid’s daily revenue topped Ethereum’s. With HIP-3, it could disrupt TradFi markets too.