Assessment of Hyperliquid's Worth: Determining a Justified Value for HYPE in the Year 2025

Hyperliquid, a new performance-optimized Layer 1 blockchain, is making waves in the crypto world. Designed specifically for trading, Hyperliquid offers a unique blend of features that make it an attractive proposition for builders, apps, and traders alike.

At the heart of Hyperliquid is its high-performance perpetual exchange, which has already reached more than $700 million in daily volume, placing it among the highest-volume Decentralised Exchanges (DEXs). This core product is just one part of Hyperliquid's offerings, as it also functions as a modular, fully on-chain trading Layer 1 with real revenue, infrastructure value, and deep staking participation.

Hyperliquid's perpetual exchange generates substantial annualized revenue through protocol fees of 0.03% on trading volume. But it doesn't stop there. The platform operates on a revenue-sharing model, ensuring that a portion of this income is distributed among its users.

Expanding into Spot Markets

Recently, Hyperliquid has forayed into spot markets as a strategic step towards becoming a full-stack trading venue. Spot volume is modeled as a percentage of perps volume, with two scenarios: Conservative (15%) and Aggressive (30%).

Valuing Hyperliquid

A Sum-of-the-Parts (SOTP) valuation model is used to value Hyperliquid, a common technique in equity research for conglomerates with distinctive business lines. The low case total implied token valuation using this model is $32, and the high case is $49.

The circulating supply of the HYPE token, when the assumptions in the valuation analysis are met, is 28.59 million tokens. The weighted average Fair Market Value (FDV) of comparable mid-cap Layer 1 chains is ~$16.5B, providing a basis for valuing Hyperliquid's L1 platform at $18-27 per token, assuming a ~920M circulating supply.

The Undervalued HYPE Token

Despite these figures, the HYPE token appears undervalued with a projected fair value range of $38 to $59. This assessment takes into account all three streams of revenue: Perpetual DEX revenue, Spot trading revenue, and Layer 1 chain value.

Risks and Challenges

However, Hyperliquid's growth case is subject to several risks, including unclear token unlock schedules, volume sustainability, ecosystem depth, regulatory ambiguity, and competitive pressure.

The Future of Hyperliquid

As crypto matures and more trading activity moves on-chain, protocols like Hyperliquid that own the full stack will be positioned to capture significant market share. With its strong foundation, innovative approach, and promising potential, Hyperliquid is well-poised to play a key role in this evolving landscape.