Original | Odaily Planet Daily (@OdailyChina)
Author | Golem (@web3_golem)
Since hitting its all-time high in mid-June, HYPE has entered a correction cycle lasting about 2 months. Now, from both technical and fundamental perspectives, HYPE is highly likely to enter a rebound phase.
From a technical perspective, Odaily's invited analyst Cody analyzed this week that the HYPE market is currently running a rebound segment at $76-77. If the price can effectively break through and stabilize above the $58~58.5 resistance zone, it will constitute a central pivot departure segment. At that point, the momentum of the entry segment ($72-73) and the departure segment ($76-77) rebounds can be observed respectively.(Related read:BTC Consolidates in Range, HYPE Daily Rebound Confirmed | Invited Analysis)
From a fundamental perspective, recent disclosures by traditional financial institutions and asset managers indicate they have increased HYPE exposure through the Hyperliquid treasury asset PURR. This shows Hyperliquid is gaining more favor and strategic positioning from the traditional finance industry, representing one of the structural off-market buy-side flows supporting HYPE's price floor.(Related read:From Hedge Funds to Family Offices: Who's Quietly Increasing HYPE Exposure Through PURR?)
Furthermore, the Hyperliquid AQAv2 (Aligned Quote Asset v2) revenue sharing mechanism is set to activate on August 26th. Analysts estimate this mechanism could contribute approximately $200 million annually for HYPE buybacks, enhancing the token's value capture within the Hyperliquid ecosystem. Additionally, the permissionless deployment of the Hyperliquid Outcomes Market HIP-4 is about to go live on the mainnet......
AQAv2 Could Generate Around $200 Million Annually for HYPE Buybacks
AQAv2 (Aligned Quote Asset v2) was announced by Hyperliquid in May this year. It allows stablecoins, including those not exclusively issued by Hyperliquid like USDC, to obtain "Aligned" status. AQAv2 allows the designation of a "Technical Deployer" and a "Treasury Deployer," both of whom must stake 500,000 HYPE tokens each, valued at approximately $30 million. Hyperliquid has partnered with Coinbase and Circle, with Coinbase designated as the Treasury Deployer and Circle as the Technical Deployer.
The most anticipated aspect of AQAv2 for investors is its revenue-sharing mechanism. It stipulates that stablecoin deployers must allocate 90% of the stablecoin's reserve earnings to the Hyperliquid protocol, and 100% of these earnings will be used to buy back and burn HYPE tokens. The stablecoin reserve earnings share is accumulated and settled in 30-day cycles, with earnings automatically transferred to the Assistance Fund on the 8th day after the cycle ends.
According to official rules, formal earnings accrual will begin on August 26th, with the first payout scheduled for October 3rd. Although it's about 1.5 months until AQAv2 earnings actually flow into the Assistance Fund for HYPE buyback and burn, from a market sentiment perspective, capital is highly likely to drive up the HYPE price ahead of this buyback catalyst.
According to Hyperliquid data, as of writing, the total stablecoin supply on Hyperliquid has reached $5.74 billion, with USDC accounting for 98% of the share at $5.6 billion. Even calculating based on the one-year U.S. Treasury yield (3.82%), the annual reserve earnings for stablecoins on Hyperliquid would reach $210 million. In the future, 90% of these earnings will be used to buy back HYPE.
Preview of Stablecoin Scale on Hyperliquid
Blockworks analysts simulated Hyperliquid's accrued revenue since the AQAv2 announcement on May 14th. The data shows that Hyperliquid's revenue grew by 41.4% in July. Even on the day with the least revenue (July 25th), stablecoin reserve earnings exceeded the sum of all fee revenue ($589,000 vs. $537,000).
Simulation of Hyperliquid Stablecoin Reserve Earnings from May 14th to August 14th
According to Hyperliquid data, as of writing, the Assistance Fund has already repurchased approximately $1.03 billion worth of HYPE in total. The repurchased tokens account for 4.65% of the total supply and 15.54% of the circulating supply.
The most significant aspect of the AQAv2 earnings sharing mechanism is that it makes Hyperliquid's revenue further immune to cyclical and market downturns. Trading fee revenue might decline in poor market conditions, but stablecoin reserve revenue is more predictable, making Hyperliquid's earnings more stable. Given that Hyperliquid uses all stablecoin reserve revenue to buy back HYPE, it also grants HYPE greater and more stable token value capture ability.
HIP-4 Ready for Launch
Meanwhile, from a fundamental perspective, HIP-4 is also poised for action.
In mid-July, Hyperliquid announced that the Outcomes Market HIP-4 would support permissionless deployment. Odaily Planet Daily previously analyzed that opening HIP-4 to permissionless deployment could be a turning point for Hyperliquid in the prediction market space, fostering ecosystem partners capable of surpassing Polymarket and Kalshi.(Related read:HIP-4 Opens to Permissionless Deployment: Can Hyperliquid Kill Polymarket?)
On July 31st, HIP-4 permissionless deployment went live on the testnet. In contrast to the mainnet HIP-4 market's relative quietness, as of writing, over 180 outcomes contracts have been deployed on the Hyperliquid testnet, with over 95 (more than 50%) being sports and competitive event prediction outcomes contracts.
HIP-4 Outcomes Market on Hyperliquid Testnet
Additionally, Hyperliquid has designed a new UI for the outcomes market. It is no longer confined to the "Trade" page but has been given a more prominent standalone "Outcomes" page. Outcomes contracts are now displayed as cards, which is more aligned with the trading habits of prediction market users.
Currently, the category with the highest trading volume in most prediction markets is sports and competitive event prediction. Judging by the deployment numbers on the testnet, third parties also prefer deploying outcomes contracts for sports and competitive events. Whether the permissionless deployment mechanism can turn the tide for Hyperliquid's outcomes market remains to be seen after it launches on the mainnet and goes head-to-head with prediction market projects like Polymarket and Kalshi.
