Hyperliquid team to unlock 1.2 mln HYPE tokens on January 6 – Details

Hyperliquid has announced that the team’s token unlock will be 30% lower than expected.

According to the unlock schedule, about 9.9 million HYPE, worth $259 million, was to hit the market on the 29th of December. This included the team’s share. 

However, the schedule has been changed to the 6th of every month. Additionally, the team’s unlock amount has been reduced from 1.7 million HYPE to 1.2 million tokens. That’s a 30% drop from the expected supply pressure.  

Reacting to the changes, Steven of Yunt Capital speculated that the update was meant to mirror the muted revenues. He posed, 

“Revenue in Dec is also lower, unlocks could be proportional to how much supply the AF buys?”

Impact of revenue drop

It is true that the decentralized exchange (DEX) and L1’s overall revenue have declined after the 10th of October crash. The revenue continued to decline after the monthly unlocks began in November. 

In fact, one analyst said that the trend “does not point to much of a growth story” as widely believed. 

However, this could also be attributed to a broader cooling off in trading in Q4 amid the market rout.

Compared to November’s $105 million in monthly revenue, the DEX raked in $73 million in December, translating to a 30% drop in month-on-month (MoM) revenue. 

Since most of the revenue is used for token buybacks and burns, this revenue fall has affected sentiment and price action to some extent. 

As such, the pace of daily buybacks has declined from nearly $3 million to less than $500K since November. 

Hyperliquid’s market share falls by 60%

Analyst Finch linked Hyperliquid’s low revenue and traction to the market lull and rivals like Lighter, which has attracted traders farming for aidrops. 

Although some expected a shift after Lighter’s TGE, Finch warned that Lighter announced a Season 3 farming that may keep more traders away from Hyperliquid. 

Collectively, increasing competition from Lighter and Aster [ASTER] has led to a decline in Hyperliquid’s market share from 75% in May to 14% in December. 

That said, Hyperliquid’s [HYPE] price has experienced a record steady recovery from mid-December, forming an ascending channel. Clearing the short-term hurdle at $27 could extend the recovery to $30-$31 area.

Final Thoughts

• The Hyperliquid team has updated monthly unlocks and reduced contributors’ share by 30%. 
• Hyperliquid’s market dominance has dropped by over 60% in the past six months amid rising competition in the perpetual DEX space.