Asset manager VanEck has expressed concerns about the sustainability of Hyperliquid’s HYPE token, citing the need for a strong developer community to justify its current market valuation of approximately $25 billion. The layer-1 blockchain, notable for launching its HYPE token through a widely praised airdrop in November, has quickly become one of the most valuable networks in the industry. However, VanEck’s research note highlights the lack of a significant developer base for Hyperliquid’s smart contract platform, which may challenge the chain’s continued growth and the valuation of its native token.
Since its debut in 2024, Hyperliquid’s perpetual futures exchange has captured about 70% of the market share from competitors like GMX and Dydx, managing around $260 million in daily transactions. This rapid rise aligns with the overall expansion of decentralized exchanges (DEXs), which recorded record monthly volumes of $433 billion in December. Despite the token’s gains of over 500% since its launch, it has seen a correction from a high of $34 per token to around $25 as of early January.
VanEck emphasizes that Hyperliquid must diversify beyond its successful Perp DEX to maintain its high valuation and stay competitive. The planned launch of an Ethereum Virtual Machine (EVM) smart contract platform is seen as a critical step in achieving revenue diversification. Although some decentralized applications (DApps) are already being tested on the EVM’s testnet, VanEck warns that most DEXs lack lasting competitive advantages due to their open-source nature. For Hyperliquid to realize its ambition as a general-purpose blockchain, it must attract a thriving developer ecosystem to support various applications, ensuring sustainable growth beyond its current achievements.
