Open interest on the Hyperliquid platform has reached a record high, but the platform's retained trading fee revenue continues to shrink.
On July 13th, the total size of leveraged positions held by traders on the platform, known as open interest, climbed above $11 billion, setting a new high for Hyperliquid in 2026. Over the past 30 days, Hyperliquid's perpetual contract trading volume neared $178 billion. Currently, among all centralized exchanges, Hyperliquid accounts for about 9% of the global perpetual contract open interest, up from less than 7% at the end of May.
But platform revenue is moving in the opposite direction. Data from DeFiLlama shows that Hyperliquid's protocol revenue peaked at approximately $357 million in Q3 2025, then declined quarter-over-quarter to $295 million, $217 million, and approximately $202 million in Q2 2026. Amidst a continuous rise in transaction counts, platform revenue has fallen 43% from its peak.
Hyperliquid's platform revenue has declined for four consecutive quarters
The Hyperliquid Improvement Proposal HIP‐3 explains why the platform cannot retain all the profits generated by its own business. Since October 2025, anyone staking 500,000 HYPE tokens (worth about $28 million at current prices) can deploy their own perpetual contract market on Hyperliquid's order book and claim up to half of the trading fees.
At the beginning of 2026, these externally deployed markets accounted for only 2% of Hyperliquid's perpetual contract trading volume; today, that share is close to 50%.
Revenue data clearly shows the impact of this revenue sharing. The portion of trading fees directly returned by Hyperliquid to developers, market makers, and the platform's liquidity treasury was just 6% of total revenue in Q2 2025; a year later, that proportion had reached 18%.
In Q2, developer fee revenue generated by front-end routers like Phantom amounted to about $16 million, and this entire amount flowed out as cost expenditure, representing pure pass-through revenue.
Flow of Trading Fees
The continuous influx of traders is driven by new product listings on these third-party markets: real-world asset (RWA) perpetual contracts. Contracts for crude oil, gold, Nvidia, Tesla, Nasdaq 100 tracking products, and even for unlisted companies like SpaceX, saw their open interest hit a new high of $3.6 billion this month, surpassing Bitcoin to become the platform's largest trading market by volume.
From July 13th to July 19th, trading volume for tokenized stock and commodity contracts reached $25 billion, accounting for 52% of the week's total volume and exceeding cryptocurrency perpetual contracts for the first time. Settled in stablecoins with no expiry date, these contracts can be traded even on weekends when the NYSE is closed. For those wanting to trade leveraged Nvidia contracts at 2 a.m. on a Sunday, there are almost no other similar options available.
However, this round of growth is highly dependent on a single entity. Trade.xyz accounts for over 90% of the open interest under the HIP‐3 mechanism. This means Hyperliquid's impressive records are highly dependent on this deployer's oracle choices, margin parameter settings, and risk management capabilities.
The risks inherent in this model were exposed last Monday: a large trade on a low-liquidity Korean pre-market exchange caused Trade.xyz's SK Hynix contract to plummet 19%, triggering a wave of liquidations. The firm later agreed to compensate affected users.
Hyperliquid allocates about 97% of its trading fees to a buyback fund, which repurchases and burns HYPE tokens on the open market. So far, approximately 44.5 million HYPE have been burned from the total supply. The buyback amount is directly linked to platform profits; as profits fall, so does the buyback scale. In Q3 2025, the fund bought back nearly $290 million worth of HYPE; in Q2 2026, the buyback was about $149 million, nearly halved.
CoinDesk data shows HYPE traded near $55 last Friday, down 5% for the week, and about 28% below its all-time high of around $77 on June 16th. Based on an annualized revenue of roughly $785 million, the token's corresponding P/E ratio for its circulating market cap is about 16x, and about 70x on a fully diluted basis.
Over the past month, institutional holders like Multicoin Capital and Bitwise have transferred large amounts of HYPE tokens to exchanges.
The Hyperliquid ecosystem is actually quite thin. Among the 48 Hyperliquid ecosystem tokens tracked by CoinGecko, almost all the market capitalization is concentrated in HYPE. The second and third largest are Ethena's USDe (~$4.5 billion) and USDT0 (~$4 billion), both externally issued, cross-chain bridged stablecoins. The largest natively issued token on the platform is PURR, with a market cap of just $53 million, less than 0.5% of HYPE's market cap. The market's valuation of HYPE primarily stems from Hyperliquid's own business model, not a rich native application ecosystem.
Hyperliquid ecosystem value is concentrated in HYPE
Token supply and regulators are applying simultaneous pressure. On August 6th, nearly 10 million HYPE were unlocked for core contributors, worth about $550 million at current prices; subsequent unlocks will continue monthly until 2027, while the total circulating supply of HYPE is only 222 million tokens.
For the week ending July 17th, the HYPE spot ETF saw its first weekly net outflow since inception, about $7 million, ending a nine-week streak of inflows. Singapore's MAS placed the platform on its investor alert list in late June, with the UK having issued a similar warning earlier; executives from CME and ICE have also urged the U.S. CFTC to review its commodity perpetual contract business.
Competition is also emerging from unexpected places. Just one month after brokerage Robinhood launched Robinhood Chain, daily settlement volume on its meme coin decentralized exchange has surpassed $600 million. By some measures, its daily speculative trading activity already exceeds that of Hyperliquid.
Of course, none of this necessarily means the platform is headed for failure. ARK research data shows that as of July 31st, Hyperliquid and Pump.fun together account for 67% of total crypto application revenue. Grayscale has also likened Hyperliquid to Amazon AWS: external developers build products on the platform, and the platform takes a cut from all transactions.
But this analogy precisely highlights the existing problem. In the first four weeks of Q3 2026, Hyperliquid's total revenue was approximately $45 million. If this pace continues, total revenue for the quarter would be close to $150 million, marking a fourth consecutive quarterly decline. The buy-side pressure supporting the HYPE token would then weaken further.
