Author: Owen, WEB3 Research of GO2MARS

The next key phase of Hyperliquid has two points: whether it can charge for the pricing of order book usage, and whether it can maintain unified liquidity between compliant and offshore markets.

Introduction: An Exchange Chain, L2 Begins to Emerge

When mentioning Hyperliquid, most people think of the largest decentralized perpetual contract exchange. In 2025, its annual trading volume was approximately $2.9 trillion, accounting for about 80% of the on-chain perpetual trading volume, surpassing Coinbase.

But Hyperliquid is also a public chain. Its order book runs directly on its own L1, and HyperEVM has gathered a batch of applications such as lending, DEX, and staking. Now, this public chain has its first L2: on November 9, Kinetiq, the largest staking protocol on Hyperliquid, will launch Elysium, which targets a processing capacity approximately 100 times that of HyperEVM and can read the entire order book of Hyperliquid.

Elysium is not an isolated event. Over the past month, Hyperliquid's role has been changing; it is no longer just an exchange. More and more teams are starting to regard it as infrastructure to build their own products on:

• Papertrade only borrows prices from Hyperliquid, launching a product on October 10 with "1000x leverage and mining on losses," which achieved a nominal trading volume of over $1 trillion in just one week;
• Wall Street is eyeing its matching engine; on October 29, ICE, the parent company of the New York Stock Exchange, announced its stake in Trade[XYZ], planning to use Hyperliquid's technology to establish a regulated perpetual contract market for U.S. users;

A cryptocurrency casino, a Wall Street securities exchange, a new chain - seemingly unrelated, but all are layered in using Hyperliquid. This article will clarify the changes happening in this exchange chain and where it will lead Hyperliquid.

I. The Architecture of Hyperliquid: First the Exchange, Then the Chain

Hyperliquid's starting point is the opposite of most public chains: the team initially wanted to create an exchange but discovered that the existing chains couldn't handle it, so they built their own chain, integrating order books, matching, and settlement directly into the chain.

Now, many companies are following this path. Robinhood launched its own chain to issue stock tokens; Circle is creating a stablecoin payment chain called Arc, and Ondo is also building its own asset chain. However, most of them only place assets on the chain, with trading still completed in their own systems. Hyperliquid's trading engine runs on the chain, and the order book can be directly called by other programs on the chain, with the subsequent story unfolding from this point.

Hyperliquid consists of two parts: HyperCore and HyperEVM, where: HyperCore is Hyperliquid's self-built trading system, which can only call preset functions; HyperEVM is the Ethereum-compatible environment dedicated to deploying contracts for external protocols. (The architecture is illustrated in the image below)

From the image, the following points can be noted:

First, there are three types of markets on HyperCore: native official markets, perpetual markets deployed by third parties under HIP-3, and prediction markets deployed under HIP-4. They share the same matching engine and margin accounts; the U.S. stocks and crude oil contracts opened by third parties and the official BTC and ETH contracts run in the same trading system, allowing users to trade with one account.

Second, contracts on HyperEVM can read HyperCore's order book prices, positions, and balances in real-time, and can also send order instructions to HyperCore. Contracts on other chains must rely on external oracles to obtain exchange prices; on Hyperliquid, contracts and the exchange are on the same chain, allowing direct calls.

Third, these functions have gradually been opened up since 2025, and the ecosystem is gradually improving. (The timeline is shown in the table below)

Fourth, the three recent cases are highly representative, signaling that Hyperliquid's infrastructure is basically set up, and the ecosystem is entering the application expansion stage:

• Papertrade deployed on HyperEVM, only reading HyperCore's average price, with trading supported by its own fund pool;
• Trade[XYZ], through HIP-3, directly opens a market on HyperCore; the planned U.S. market by ICE is also based on HIP-3, using Hyperliquid's matching engine;
• Elysium is an L2 that settles to HyperEVM, reading the entire order book of HyperCore through its own nodes, and will support direct ordering later.

These three cases correspond to three depths of external access to Hyperliquid: borrowing prices, borrowing matching, building a separate chain for the order book. The following three chapters will unfold in this order.

II. Price Layer Access: Papertrade

Papertrade was launched on October 10, deployed on HyperEVM, with only BTC and ETH markets. It does not place orders on Hyperliquid but reads Hyperliquid's average price once when opening and closing positions; all profits and losses are settled against a USDC fund pool, essentially meaning users are betting against the pool.

It has two selling points: one is leverage of up to 1000x; the other is "losses mean mining," where the PAPER token is not pre-mined and is not distributed to the team and investors. It is only minted when users lose money and close their positions, and staking PAPER can yield returns from the fund pool. According to the design, those who lose money will gradually become shareholders of the dealer.

2.1 Rules and Chip Distribution Under Fair Launch

Papertrade claims a fair launch, but upon closer examination of the rules and data, ordinary users find it hard to benefit.

First, the rules are unfriendly to retail investors. The minimum position is $10,000, and after opening, no margin can be added. Orders to open and close must queue, with larger orders prioritized, and earned money is discounted. Researcher @xizhe_chan compiled 134,000 profitable orders, noting that the less price movement there is, the more is deducted:

Second, chips are taken by early investors. The earlier one loses money, the more PAPER they get: a loss of $1 at the opening could mint 100 tokens but only 40 tokens after ten hours, and only about 12 tokens remained by October 17. Large investors typically open long and short positions simultaneously with two accounts, losing money to mine tokens while recovering their principal, which costs only about 30% of a direct liquidation, and then quickly recouping through dividends:

By October 20, the 1000 wallets with the most tokens held 88% of PAPER, claiming 91% of the dividends.

Third, rules were changed just ten days after launch. After Paragon and Aster launched PAPER pre-market contracts, Papertrade announced that PAPER could only be staked for dividends, not transferred or sold. The team's reasoning was that if external entities could short PAPER, attackers could manipulate prices, depleting the fund pool while profiting from shorting PAPER. However, many aimed to mine tokens with the expectation they could sell PAPER later, and this expectation was entirely dashed when the rules changed.

The market reaction was direct. Papertrade's daily income fell from a peak of about $25 million in its first week to $178,000 by October 22, with TVL declining over 70%:

2.2 Insights: The First Native Application of HyperEVM Ecosystem

Though Papertrade's popularity was short-lived, it provided three insights for the Hyperliquid ecosystem.

First, HyperEVM now has a truly native application. Previously, lending and DEX on HyperEVM were mostly forks of other chain protocols; Papertrade is entirely built on the price of HyperCore and cannot exist outside Hyperliquid.

Second, the barrier to creating trading products on Hyperliquid has significantly lowered. Papertrade does not have market makers or an order book and relies solely on readings from Hyperliquid's prices; its nominal trading volume surpassed $1 trillion in just one week. External teams do not need to build their own liquidity to introduce new trading categories.

Third, the price of Hyperliquid itself has become a core resource. Previously, it was believed that the core asset of a chain was block space; Papertrade shows that contracts on HyperEVM can directly access real-time prices from Hyperliquid's order book, without relying on external oracles to relay, providing a more native source of on-chain price:

Of course, the more the price is relied upon, the greater the pressure to protect it. On the night of Papertrade’s launch, someone manipulated the ETH price on Hyperliquid with large orders while profiting from a large position on Papertrade; this kind of price manipulation is a significant concern for subsequent applications of HyperEVM.

III. Matching Layer Access: Trade[XYZ] and Wall Street

Papertrade borrowed the price, while Wall Street (ICE) wants to borrow the entire trading system. Trade[XYZ] is the largest deployer on HIP-3, directly opening perpetual markets for U.S. stocks, indices, crude oil, and foreign exchange on HyperCore, using Hyperliquid's matching engine and margin system, with prices introduced from external sources, including officially authorized S&P 500 contracts from S&P Dow Jones.

3.1 One Year Anniversary of HIP-3: Scale Expansion and Market Concentration

HIP-3 is an open mechanism launched by Hyperliquid in October 2025, allowing any team to establish their own perpetual contract market on HyperCore by staking 500,000 HYPE. One year after its launch, HIP-3 has accumulated a trading volume of approximately $665 billion, with its proportion of Hyperliquid's perpetual trading volume rising from 0.2% to 51.3% in July of this year. Its growth has been driven by several market trends: the gold and silver surge at the beginning of the year, the crude oil conflict during Iran's disruption in March when there was nowhere else to trade, and the launch of SpaceX and storage chip stocks in June and July.

The trading contents are also constantly rotating: in March, commodities accounted for 64% of HIP-3's trading volume; by July, individual stocks and Pre-IPO contracts made up 62%, with 1.4 billion USD traded on the day SPCX was listed, representing about 30% of HIP-3's total that day. After July, HIP-3's share fell to around 30%, with over 70% of trading still coming from official native markets.

Concentration has not changed significantly. As the first third-party market to launch on HIP-3, Trade[XYZ] has consistently held around 90% of the market share, rising to approximately 97% in October. Its advantages lie mainly in the speed of new offerings and liquidity:

• Quick to launch, able to capture hot spots. HIP-3's new market slots are shared among all deployers, with one auction every 31 hours. After winning, the deployer can decide what asset to list. Trade[XYZ] has ample funds; out of 23 slots auctioned in August, it won 8 alone and deployed them quickly: from registering a new market on-chain to the first transaction, the median time is only 3.3 days, with 65% of markets launching within a week and 47% within three days.
• Good liquidity, able to trade from the start. HIP-3 markets do not share liquidity with Hyperliquid's official markets; each market has its own order book that must rely on deployers to bring in market makers for depth. Trade[XYZ] can attract market makers and invest funds, allowing new markets to start with tight spreads and deep order books. Good liquidity attracts traders; more traders make market makers more willing to come, and once this cycle forms, it is hard for newcomers to break it.

In addition, Trade[XYZ] has a strong brand advantage and product credibility. It was developed by the Hyperunit team, which previously built the spot asset infrastructure for Hyperliquid, and obtained official authorization from S&P Dow Jones Indexes to launch the first licensed S&P 500 perpetual contract. Thus, although Trade[XYZ] is a third-party deployer, it is viewed as the closest partner to Hyperliquid in the market and has become synonymous with the HIP-3 ecosystem to some extent.

3.2 From Prevention to Access: Three Paths for Wall Street

Trade[XYZ]'s biggest selling point is the 7x24 hour trading that traditional exchanges cannot offer. When U.S. stock and CME crude oil futures markets are closed on weekends, Hyperliquid is one of the few places where trading these assets is still possible. During the Iran conflict in March, JPMorgan analysts noticed that some traditional traders moved to Hyperliquid to trade crude oil.

Wall Street's responses have also changed. From March to November, three paths have emerged around Hyperliquid, each closer than the last:

First Path: Relying on Centralized Exchanges to Bypass Hyperliquid and Fill 7x24 Trading Gaps Themselves. In March 2026, ICE invested in OKX, initially launched crude oil perpetual contracts on OKX, then formed a joint venture with OKX to bring tokenized stocks of the NYSE and ICE futures to OKX users. Meanwhile, ICE and CME expressed concerns to Congress about Hyperliquid potentially manipulating oil prices, pushing for it to accept CFTC regulation. At that time, Hyperliquid was still seen as a counterpart to be guarded against.

Second Path: Direct Access to Hyperliquid. By the end of the month, the CFTC allowed perpetual contracts to be listed as futures in the U.S., opening the compliant path, which changed ICE's attitude. ICE's CEO publicly stated that this trading venue with only 11 people is "bigger than Nasdaq," and noted that the two sides have discussed many times. On October 29, ICE acquired a stake in Trade[XYZ] and planned to launch the U.S. market ICE[XYZ]: Hyperliquid provides matching technology, Trade[XYZ] designs the market, and ICE operates the exchange and is responsible for clearing, pending CFTC approval. Hence, Hyperliquid shifted from a competitor to a trading service provider for ICE.

Third Path: Holding Tokens and Creating Broker Channels. Aside from exchanges participating, there are ways for token holders to step forward. Hyperliquid Strategies (NASDAQ: PURR), which holds about 38.9 million HYPE, was originally just a $HYPE treasury company that financed token purchases via the stock market. On November 5, it applied to become a futures broker to bring U.S. users into the HIP-3 market. This way, PURR holds HYPE while also bringing trading volume to Hyperliquid: the more users trade, the more fees are repurchased, and the value of the $HYPE it holds also increases.

From the illustration, it is clear that ICE holds a central position tightly grasping the benchmark prices, clearing, and compliance, while other segments are delegated to partners: OKX handles centralized matching, Trade[XYZ] designs and operates HIP-3 markets, Hyperliquid provides the on-chain matching engine, and Hyperliquid Strategies offers an entry point for U.S. users. In this landscape, Hyperliquid and OKX hold equal positions, both being trading venues accessed by ICE, one on-chain and the other off-chain. As a result, Hyperliquid has transformed from a competitor to an actively integrated trading infrastructure for Wall Street.

3.3 Division of Labor: Licensed Institutions Responsible for Clearing, On-Chain for Matching

Before ICE, licensed institutions had already approached Hyperliquid. On September 16, Kraken's parent company Payward announced it would deploy the HIP-3 market through its subsidiary Bitnomial (a CFTC licensed exchange and clearinghouse) and subsequently obtained access to Hyperliquid's HIP-3 whitelist, becoming the first deployer regulated by the CFTC. However, compared to Payward's origins in the crypto industry, ICE, as the parent company of the NYSE, acquiring a stake in Trade[XYZ] and its prior arrangements with OKX mark the real entry of mainstream Wall Street exchanges.

Putting these collaborations together, the logic of division is clear:

It can be seen that the licensed institutions are guarding their most advantageous segments. When cooperating with OKX, ICE controlled the crude oil benchmark pricing, which translates to the U.S. market, where both ICE and Payward retain clearing and compliance in their hands. Clearing represents the most heavily regulated and highest threshold aspect of traditional exchanges: clearinghouses manage client margin, assume default risks, and require substantial capital, mature risk control, and regulatory licenses, making it difficult for new entrants. ICE already operates multiple clearinghouses, and Bitnomial simultaneously holds both exchange and clearing licenses.

Matching is becoming increasingly standardized. The faster the engine and the better the liquidity, the more it will be used. ICE's CEO also characterized these perpetual markets as a supplement to their futures business.

For Hyperliquid, this means that on-chain matching is beginning to be adopted by licensed institutions as infrastructure, and subsequently, more institutions may follow the same pathway to access.

However, the problem lies here. Regulated markets must carry out KYC and set access thresholds; the HIP-3 whitelist was designed to this end. Even if such markets run on Hyperliquid's matching engine, only U.S. customers and market makers who meet entry requirements can trade, while numerous offshore traders in Hyperliquid are unable to participate, necessitating a rebuild of depth. In other words, what Wall Street takes away is Hyperliquid's matching technology, but its most valuable liquidity network may not necessarily follow suit.

IV. Order Book Layer Access: Elysium

While Papertrade borrows prices and Wall Street borrows matching, Kinetiq takes it a step further: it has built a separate chain, Elysium, next to Hyperliquid specifically to access its order book.

4.1 Overview and Market Expectations of Elysium Project

Elysium is being developed by Kinetiq, the largest staking protocol on Hyperliquid; it was first announced on X on August 24, the testnet opened on September 22, and the main net is planned to launch on November 9. It is built on Arbitrum's technology stack, settles to HyperEVM, uses $HYPE to pay transaction fees, and has a block time target of around 100 milliseconds.

Discussions surrounding it can be broadly categorized into three viewpoints:

• Bullish individuals are betting on $KNTQ. Half of the revenue from Elysium's fees will be used to buy back and destroy Kinetiq's token $KNTQ. On the day of announcement, $KNTQ rose by about 30%, and after gaining nearly 48% in two weeks, it reached an all-time high of $0.4547 on October 28.

Note: Elysium currently does not have its own token, with trading mainly revolving around the developer Kinetiq's token $KNTQ. It is primarily traded on the Hyperliquid spot market (mainstream centralized exchanges have yet to list it aside from Kraken and MEXC), and there is a version that can be traded on EVM chains via Chainlink cross-chain to Base.

• From an ecological perspective, its experimental significance is emphasized. Some community opinions suggest that HyperEVM has long lacked strong promotion by Hyperliquid officials, resulting in a somewhat stagnant ecosystem; Elysium is an attempt by teams within the ecosystem to self-fill the gap. Kinetiq has both capital and expansion capabilities, and attracting a batch of leading applications onboard at launch could bring renewed attention to the HyperEVM ecosystem.
• Those skeptical are focused on the real data. Some community users have noted that after approximately three weeks of the testnet, 30 million transactions accumulated, with total fees of only about 269 HYPE over 30 days. Based on similar activity levels, it is estimated that only about $11,000 a month would be available for buying back $KNTQ on the mainnet, which is far less than the fully diluted valuation of about $350 million for KNTQ. Furthermore, it is intriguing that the lock-up period for KNTQ team and investor tokens will end on November 27, shortly after the mainnet launch, which might bring about a new wave of selling pressure.

All three viewpoints point to the same conclusion: the market is currently betting on expectations rather than actual income, and these expectations will be tested by real transactions after the mainnet goes live.

4.2 Shortcomings of Hyperliquid Spot Trading: New Tokens Can't Access HyperCore, HyperEVM Can't Run Fast

Elysium aims to address Hyperliquid's long-standing shortcomings in spot trading. Hyperliquid's perpetual contracts rank among the world's best, yet their spot trading volume has been lagging due to two layers of issues:

• New tokens can only start on HyperEVM. HyperCore's spot order book is suitable for trading mature assets; for new tokens to get involved, they must first bid for a place in the coin listing and require professional market makers to continuously post orders. Newly issued tokens cannot achieve these prerequisites and instead can only be traded on issuance platforms and AMMs, all of which can only be deployed on HyperEVM.
• HyperEVM is deliberately throttled. HyperEVM and HyperCore run on the same chain, processed by the same set of validators. To prevent the computation from applications from encroaching on trading's computational resources, Hyperliquid has limited HyperEVM's processing capacity: smaller blocks at around 1 per second, and applications can only read the optimal one-level quotes from the order book. This suffices for lending and staking but cannot support the professional market pools that require multiple quote updates per second.

The result is that new assets find it challenging to grow within the Hyperliquid ecosystem. Kinetiq has pointed out that the spot trading volume handled by professional market pools on Solana far exceeds that of Hyperliquid's spot market.

4.3 Elysium's Solution: Speeding Up Applications and Paving the Way for New Assets

The first step is to enhance speed. Elysium aims for high speed, targeting a processing capacity about 100 times that of HyperEVM; yet it’s essential to see where it excels: it compares to HyperEVM, not HyperCore. Elysium’s block time target is around 0.1 seconds, while the median delay from order placement to confirmation in HyperCore is only approximately 0.2 seconds; the trading engine has never been slow.

Speeding up does come with its price. Compared to HyperEVM, Elysium can read a more complete order book, but the reliability of the data is discounted.

In other words, Elysium trades speed and data for trust: prices read by HyperEVM are guaranteed by Hyperliquid consensus; the entire order book read by Elysium comes from its operated nodes, lacking chain verification. The official Hyperliquid roadmap also lists improving HyperEVM throughput as a future direction; Elysium bets on the official upgrades not arriving too quickly.

The second step is paving the return path for new assets. With a faster environment, Elysium has designed a process for new assets from conception to returning to Hyperliquid:

Specifically:

• New tokens are initially issued on Elysium's issuance platform and regular AMM trading pools to accept the earliest trades;
• Once trading becomes active and scales, they will enter Elysium's professional market-making pool, with market makers providing deeper quotes;
• Finally, qualified assets will upgrade to HyperCore's spot order book, leading to their listing on HIP-3 perpetual contracts.

Under this route, Elysium is responsible for incubation, while Hyperliquid is responsible for accepting mature assets, ultimately bringing trading volume back to HyperCore. If this route is feasible, Hyperliquid effectively gains a stable source of new assets.

This is also Kinetiq's own way out. Its staking business has already peaked, with TVL down over 60% compared to its high point in October 2025; thus, creating Elysium allows Kinetiq to transform from a staking protocol into a chain operator, also finding new sources of income for $KNTQ.

Overall, Elysium presents a solution for Hyperliquid to fill gaps in spot and new asset offerings, while for Kinetiq, it provides a second line of growth beyond staking, making both parties' interests temporarily aligned.

4.4 The Essence of Elysium: Making Order Book Access a Chain

Although Elysium is a new chain, what it really sells is not block space but the ability to access Hyperliquid's order book. When viewed alongside Papertrade, it becomes very clear:

From merely borrowing a price to reading the entire order book and supporting direct orders, external dependencies on the Hyperliquid order book are deepening. However, all this is still speculative: the performance has not been verified on the mainnet, and whether liquidity can aggregate will depend on whether Hyperliquid officially accepts it, while on-chain revenue mainly accrues to $KNTQ, not $HYPE — the implementation situation of Elysium still requires ongoing observation.

V. Hyperliquid's Role Transformation: From Exchange to Trading Infrastructure

Considering the first three steps, external teams' methods of accessing Hyperliquid vary widely, but they share a commonality: they no longer see Hyperliquid merely as a trading platform. Hyperliquid's role is transforming, gradually assuming three functions within trading infrastructure:

As a price source, it provides quotations for markets during closure. Papertrade dares to build a trading platform relying solely on Hyperliquid prices, predicating that these prices are active and trustworthy. This trustworthiness has spread beyond crypto assets: during weekends when U.S. stocks and crude oil were closed, Hyperliquid was one of the few still providing quotes; before the IPOs of companies like SpaceX, Pre-IPO contracts began trading, and in hindsight, their performance was quite close to actual opening results, with Trade[XYZ] using this to submit a comment to the U.S. SEC.

As a matching service provider, it leaves compliance to licensed institutions. In ICE's plan, matching remains on Hyperliquid while the responsibility for clearing and client entry is left to ICE and futures brokers; Hyperliquid Strategies applying for a futures broker qualification aims precisely to bring U.S. clients in compliantly; the official organization is also preparing the HIP-3 market with access thresholds, with independent operators handling compliance. This means that the chain itself does not do compliance; instead, licensed institutions connect with regulators on the upper layer, allowing an offshore on-chain exchange to enter the U.S. market without having to change itself.

As a listing destination, it accepts new assets grown externally. The new asset pathway designed by Elysium ultimately leads to HyperCore's spot and HIP-3 perpetual offerings; deployers of HIP-3 bid for a listing chance every 31 hours, thus also vying for the opportunity to open markets on Hyperliquid's order book. External teams are responsible for building entryways and incubating assets, migrating to Hyperliquid trading once mature.

These three functions are based on the same premise: the depth and activity of the Hyperliquid order book. External teams are willing to conduct business around it precisely because of this; once the order book loses its advantages, these three functions will also falter accordingly.

This also fundamentally distinguishes Hyperliquid from other exchanges building their own chains. Chains from companies like Robinhood and Circle mainly carry assets on-chain while matching still occurs in their own systems, making it impossible for external teams to call; Hyperliquid places the order book itself on-chain, enabling its prices, matching, and liquidity to be utilized externally.

——This aligns with Jeff Yan's vision: at TOKEN2049 in October, he stated that Hyperliquid aims to become an open infrastructure for various financial products to access, rather than competing with frontend platforms; developers need not build their own matching and clearing systems but can directly use its markets and liquidity.

VI. The Value of $HYPE: Ecological Expansion and Who Benefits?

The number of teams accessing Hyperliquid is increasing, and the ecosystem is rapidly expanding, but the benefits of this expansion do not automatically flow to HYPE. To clarify this, we must first understand what supports $HYPE and then examine how new businesses and intermediaries share the benefits.

6.1 The Price Support of $HYPE: Fees, Buybacks, and the DAT Treasury

$HYPE does not correspond to any company's equity, and protocol revenues will not be directly distributed to holders. Its price support is built on Hyperliquid's business: how much money the platform can make and how these revenues transform into demand for $HYPE. Currently, this support mainly comes from three方面：

• Fee income is fundamental. The trading fees generated by users trading on Hyperliquid constitute its primary source of income. In 2025, Hyperliquid's annual perpetual contract trading volume was approximately $2.9 trillion, with income attributable to HYPE holders of around $63.94 million over the 30 days up to October 28 of this year, ranking first among all protocols. Since October, the interest generated by users depositing USDC has also become a new income source, independent of trading volume.
• Buybacks transform income into buying power. About 97% to 99% of Hyperliquid's net fees go into a support fund, continuously repurchasing HYPE in the market; 90% of the USDC interest within the ecosystem is also used for buybacks. In this model, the higher the income, the more the buybacks, and trading activity directly translates into buying pressure for $HYPE.

It is worth noting that the scale of $HYPE buybacks has been quite significant. Since June of this year, Hyperliquid has monthly buyback investments ranging from $38 million to $74 million, with the support fund accumulating over 48 million HYPE by October 13, costing about $1.365 billion.

• DAT treasury is a major buyer outside of the protocol. Nasdaq-listed company Hyperliquid Strategies (NASDAQ: PURR) is a treasury company that specifically holds $HYPE, financing through the stock market to buy $HYPE. Its holdings grew from 12.5 million tokens at the time of its listing in December 2025 to around 38.9 million tokens by October 28, with an average cost of about $56, fully staked. This purchase pressure is independent of protocol revenue and relies on its capacity to raise funds in the stock market.

6.2 Value Distribution of New Business: Intermediary Diversion and HyperCore Return

The buyback funds for $HYPE come from fees on HyperCore, and only transactions completed on HyperCore can convert into buying pressure for $HYPE. Therefore, how much value new businesses can capture for $HYPE depends on two factors: where transactions take place and how revenue is distributed.

Under this standard, the value created by new business has two destinations: part falls back to HyperCore with trading volume, and part remains in the intermediaries building these operations, with the latter currently taking a substantial share:

HIP-3 remains the only business that has brought a substantial volume back to HyperCore, but the revenue has not synchronized back. To attract deployers and users, most markets are in growth mode, with drastically reduced fees, and the remaining fees must also be split with deployers, resulting in trading volumes significantly outweighing fee contributions:

Additionally, trading volume for new businesses is highly concentrated within a few teams, leading to concentrated revenue generation. Trade[XYZ] alone holds over 90% of HIP-3 share, claiming half the fee revenue from it. This concentration is partly a temporary result of Hyperliquid's expansion phase: the official organization encourages third-party entry through fee reductions and revenue sharing to build the market first.

Overall, Hyperliquid is leveraging profit-sharing for expansion. The short-term contributions of new businesses to $HYPE are limited, and the extent of this contribution will ultimately depend on how much trading volume the intermediaries can bring back to HyperCore.

VII. Conclusion: The Order Book is Hyperliquid's Most Core Asset

The ways in which Papertrade, ICE, and Elysium access Hyperliquid differ, but they all seek the same asset: its order book. Papertrade reads the order book's prices, ICE utilizes the matching engine behind the order book, and Elysium aims to read the entire order book and place orders directly. Even this L2, Elysium, serves a purpose distinct from L2s on Ethereum. Ethereum's L2s are meant to offset the mainnet's transactions, while Elysium is designed to access Hyperliquid's order book more quickly and comprehensively. The value of most public chains lies in block space; Hyperliquid is fighting for its order book.

For the order book to be used in such ways, two conditions must be met:

• First, it must be on-chain and callable directly by external programs. The chains of Robinhood and Circle only hold assets; matching still occurs in their native systems, which external entities cannot access.
• Second, it must be deep enough and open 7x24 hours for anyone to participate, which is why weekend trading for crude oil or Pre-IPO trading for companies like SpaceX occurs here. Wall Street is taking notice of Hyperliquid precisely because of this second factor. After the CFTC lifted the restrictions on perpetual contracts in May, ICE shifted from pushing for Hyperliquid regulation to investing in Trade[XYZ] to set up markets on it.

However, external reliance on the order book does not guarantee that Hyperliquid will automatically benefit.

Firstly, it faces asymmetry between risk and rewards. External products that read Hyperliquid's prices do not need to pay fees, but if a large amount of capital settles at these prices, it becomes profitable to manipulate prices, as seen on the night of Papertrade's launch. The larger the scale of external invocation, the greater the manipulation pressure on Hyperliquid's order book, while revenues accrue to external products.

Secondly, compliance can fragment the liquidity. While ICE and Payward utilize Hyperliquid's matching technology, the compliant market must set access thresholds, preventing offshore traders and market makers from participating. The most valuable aspect of Hyperliquid is its unified liquidity, which is precisely the hardest part for compliant markets to inherit. While matching technology can be exported, liquidity may not be brought over as well.

Both of these issues will ultimately reflect on the value of $HYPE. The value of $HYPE comes from the fees collected on HyperCore and buybacks; only transactions executed on HyperCore count. Currently, Hyperliquid's reduction in fees, revenue sharing, and openness in price readings allow for more access points, while a significant portion of revenue is retained by Trade[XYZ], Kinetiq, and PAPER stakers. This strategy is one of expansion first, recovery later; the ability to recover depends on how much trading volume these access points can ultimately bring back to HyperCore.

Thus, the next key phase for Hyperliquid consists of two points: whether it can price and charge for the usage of the order book, and whether it can maintain unified liquidity between compliant and offshore markets. Achieving both will make the open order book its most irreplaceable advantage. Failing to do so could mean it merely provides a layer of pricing and matching engine for others, and as the ecosystem grows busier, more value may be lost.

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