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▲ Hyperliquid (HYPE)/AI Generated Image
The reason behind HYPE's 173% surge since the beginning of the year in the Hyperliquid ecosystem, amidst a bear market, is the extreme concentration of liquidity, where one entity has captured 97% of the trading volume, coupled with a $1.3 billion token buyback structure.
Cryptocurrency-focused YouTube channel Coin Bureau analyzed in a video uploaded on July 4 (local time) that while HIP-3 opened the door for perpetual futures markets, actual liquidity is concentrated among a few winners. To open a HIP-3 market, 500,000 HYPE must be staked, which is worth approximately $33 million based on the video. If there are issues with the oracle or liquidity management, validators can have 20-100% of their stake slashed.
The exit of a HIP-3 exchange that provided synthetic investment exposure to unlisted companies such as OpenAI and Anthropic was presented as an example demonstrating the market's ruthless survival structure. Although the exchange had accumulated approximately $650 million in trading volume and over 500,000 HYPE in community deposits, it heavily relied on internal quotes and self-referential price feeds. Coin Bureau pointed out that oracle vulnerabilities, price manipulation risks, and shallow liquidity acted as structural weaknesses for assets without a benchmark price in the open market.
In contrast, Trade XYZ dominated approximately 97% of HIP-3 trading volume as of mid-June 2026, with cumulative trading volume exceeding $100 billion. It is evaluated that by utilizing clear open market prices as a benchmark and building deep liquidity, it has reduced spreads and increased the reliability of price discovery. Coin Bureau analyzed that a structure where trader influx boosts liquidity, and increased liquidity in turn attracts more traders, has pushed market share into a de facto winner-takes-all stage.
The concentration of trading volume also intertwined with HYPE's value capture structure. According to the video, Hyperliquid sends approximately 97-99% of its trading fees to an assistance fund to purchase HYPE in the open market and effectively burn it permanently. The cumulative buyback amount has exceeded $1.3 billion, and the value of the fund's holdings is estimated at approximately $2 billion. However, the buyback amount decreased from $316.76 million in Q3 2025 to $192.25 million in Q1 2026, and core contributor tokens are unlocked at a rate of approximately 9.9 million HYPE per month.
Regulatory and platform concentration risks are also simultaneously increasing. The UK Financial Conduct Authority (FCA) added Hyperliquid and Hyper Foundation to its unauthorized firms warning list on May 21. The video presented Trade XYZ's 97% market share, the amount of unlocked HYPE compared to the buyback volume, and the movements of additional regulatory bodies as key observation indicators. Coin Bureau asserted, "It's not about hype, but where trading volume is moving," claiming that trading platforms with real liquidity, price discovery functions, and cash flow will be at the center of the next market restructuring.
[Article Key Summary]
-HYPE surged 173% since the beginning of the year amidst a bear market, with approximately 97% of HIP-3 trading volume concentrated on Trade XYZ.
-Hyperliquid operates a HYPE buyback structure utilizing approximately 97-99% of trading fees, with cumulative buybacks exceeding $1.3 billion.
-Concentration of trading volume strengthens HYPE's value capture but simultaneously increases risks of platform single point of failure, token unlocks, and regulatory scrutiny.
*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. This content should be interpreted for informational purposes only.*
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