Original Title: Why Hyperliquid Can Reach $250 in 2026
Original Author: DeFi Warhol, Crypto Researcher
Original Translation: AididiaoJP, Foresight News
Currently, there are many decentralized trading platforms for perpetual contracts, but only one automatically uses almost all of its revenue to buy back its tokens on the open market.
This is the essence of my argument about Hyperliquid, summarized in one sentence:
If you believe that the trading volume of perpetual DEXs will continue to grow, then HYPE is one of the purest and most leveraged ways to benefit from this trend.
Below are my personal views on how Hyperliquid operates and the potential future developments of its current token design.
Summary
• Hyperliquid's daily trading volume has reached billions of dollars, with annual revenue exceeding $1.3 billion.
• 97% of all fees are routed to an automated "assistance fund," which buys HYPE on the open market.
• The fund has spent over $600 million on HYPE buybacks and also holds a significant amount of tokens.
• The risk and reward hinge on whether Hyperliquid can continue to capture trading volume and maintain its 97% buyback policy.
• Based on simple assumptions of trading volume and market share, I derive rough price scenarios: Bear Market: $45–50 Benchmark: $80–90 Bull Market: $160–180
Current Status of Hyperliquid
To better understand the direction of Hyperliquid, we need to grasp its current status.
Here are some quick data overviews:
• Perpetual contract trading volume: approximately $8 billion +/ day
• Annual revenue: approximately $1.2 – 1.3 billion
• HYPE market cap: approximately $10 billion
• HYPE fully diluted valuation: approximately $38 billion
• Staked HYPE: approximately 42%
• Assistance fund balance: 35 million HYPE
Core Mechanism: 97% of Fees for Automatic Buybacks
This is the most critical part of the bullish argument.
Hyperliquid uses protocol trading fees to fund HYPE token buybacks.
Traders pay fees for perpetual contracts and spot trading.
These fees are routed to the assistance fund.
The assistance fund is set to continuously use about 97% of all exchange fees to buy back HYPE tokens on the open market.
Increased trading volume → Increased fees → Increased buybacks
In other words, almost every dollar earned by the exchange becomes a mechanical buying force for HYPE.
Additionally:
On HyperEVM, gas fees are paid using HYPE.
Base fees use an EIP-1559 style mechanism, so some HYPE will be burned, adding another deflationary path.
So:
• 97% of trading fees → HYPE buybacks
• HyperEVM gas fees → HYPE
• Burned stakes → HYPE accumulation
HyperEVM
Hyperliquid initially started as a customized perpetual contract protocol. Now there is HyperEVM, which is an EVM layer where:
• Users pay gas fees with HYPE
• Base fees are burned
• On-chain applications (perpetual contract front-end, HIP-3 market, other protocols) increase additional demand for block space and HYPE.
I see HyperEVM as a second engine:
• Engine 1: Perpetual contract trading volume → Fees → 97% buybacks.
• Engine 2: HyperEVM activity → HYPE gas fees → Burn + more fees.
Scenario Setting
Current Status:
• Total trading volume of perpetual DEXs: approximately $38 billion / day
• Hyperliquid trading volume: approximately $8 billion / day (about 20–22% share)
• Fee rate: approximately 0.04% (assuming most traders are takers)
• Annual fees: $1.3 billion
• 97% for buybacks: approximately $1.2–1.25 billion / year
• Market cap: $10 billion
• Therefore, market cap / buyback ratio is approximately 8.5 times
Then I assume:
• The market continues to value HYPE at roughly the same buyback multiple (about 8.5 times)
• Perpetual DEX trading volume grows
• Hyperliquid maintains or gains market share
Scenario 1: Bear Market Situation
Bear market situation: Perpetual DEX traffic grows, Hyperliquid only maintains its share, under this framework, the final price of HYPE is around $40 to $50.
Assumptions:
• Total trading volume of perpetual DEXs: 1.5 times today
• Hyperliquid share: flat
Results:
• Annual buybacks: approximately $1.8 billion
• At 8.5 times market cap / buyback ratio → Implied market cap ≈ $15.4 billion
• Circulating HYPE approximately 337 million → Implied price ≈ $45–50
Scenario 2: Benchmark Situation
Benchmark situation: On-chain perpetual contract trading volume doubles, Hyperliquid share increases, HYPE price is in the range of $80 to $90.
Assumptions:
• Total trading volume of perpetual DEXs: 2 times today
• Hyperliquid share: approximately 30%
Results:
• Annual buybacks: approximately $3.34 billion
• At 8.5 times → Implied market cap ≈ $28.4 billion
• Circulating HYPE approximately 337 million → Implied price ≈ $80–90
Scenario 3: Bull Market Situation
Bull market situation: On-chain perpetual contract trading volume grows 3 times, Hyperliquid becomes the dominant platform, under the same 8.5 times multiple, HYPE price reaches above $160–180.
Assumptions:
• Total trading volume of perpetual DEXs: 3 times today
• Hyperliquid share: approximately 40%
Results:
• Annual buybacks: approximately $6.68 billion
• At 8.5 times → Implied market cap ≈ $56.8 billion
• Circulating HYPE approximately 337 million → Implied price ≈ $160–180
Important Note:
These are not price targets. They do not include additional upside potential from HyperEVM gas fees, new products, overall market sentiment, or any changes in multiples (up or down).
They simply illustrate:
• Adopting the current fee / buyback economic model
• Applying a fixed 8.5 times market cap / buyback ratio
• Allowing trading volume and market share to drive changes in buyback numbers
Assuming a full altcoin season occurs in 2026 and the bull market scenario becomes a reality, I believe $250 is a realistic number for HYPE.
Why I Am Bullish
The reasons I find this setup interesting are as follows:
• Real, visible cash flow: Hyperliquid has already generated over $1.3 billion in protocol revenue annually and has allocated about 97% of it to HYPE buybacks.
• Simple, aggressive design: Allocating 97% of all exchange fees to an assistance fund that buys back HYPE on the open market is one of the purest forms of token economics.
• Growth of perpetual DEXs: On-chain perpetual contracts are genuinely capturing market share from centralized exchange derivatives.
• Hyperliquid consistently leads in daily DeFi revenue and buybacks. The potential value of HyperEVM: more applications and the HIP-3 market mean more HYPE gas fee consumption + more fee channels injected into the same assistance fund.
Overall: trading volume growth + high fee share + 97% buyback + 8.5 times multiple, if Hyperliquid continues to perform well, this provides a very clear and reasonable path for price increases.
Final Thoughts
For me, the bullish argument for HYPE is not because of the narrative that "numbers go up," but rather:
• A perpetual DEX + L1 combination with extremely high liquidity and depth, already generating billions of dollars in trading volume.
• A token model where approximately 97% of trading fees are mechanically cycled back into HYPE buybacks.
This is the basis of my extreme bullishness on HYPE.
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