Hyperliquid slashes token unlocks by nearly 90%

Hyperliquid’s team stated that it is reducing the number of upcoming team token emissions to 140,000 tokens. The firm revealed that the tokens from Hyperliquid Labs will be unstaked on Thursday and distributed to its team members on February 6.

According to a post on Hyperliquid’s Discord channel, the firm is scheduled to release 140,000 tokens next month. The initiative has marked a steep drop from 1.2 million tokens unlocked in January to 2.6 million in December.

Hyperliquid cuts distribution from 1.2M in December to 140K

The trading platform’s reduction of upcoming team token unlocks represents an approximate 90% reduction in monthly team allocations. The initiative will also allow traders to monitor token supply schedules for potential price impact.

The firm’s initiative to reduce token unlocks could help stabilize the token’s liquidity and also reduce sell-side pressure. However, Hyperliquid didn’t provide any detailed reasoning behind the reduction. 

Hyperliquid’s reduction of team token unlocks could cause short-term volatility in HYPE, and the sharp drop in HYPE emissions may also reduce market pressure in the coming weeks. At the time of publication, HYPE is trading at $34.3, down 0.72% in the past 24 hours. The asset has gained nearly 57% in the past 7 days and more than 34% in the past 30 days.

Hyunsu Jung, CEO of Nasdaq-listed Hyperion DeFi, argued that HYPE’s rally reflects the growth of popular traditional instruments such as futures and ETFs tied to digital assets. He also pointed out that Hyperliquid is the first publicly listed U.S. company to build a long-term treasury of HYPE tokens. On-chain data showed the firm held more than 1.4 million HYPE tokens as of late last year.

Hyunsu stated that most of the convergence of all asset classes under the megatrend of tokenization is happening on Hyperliquid. He noted that the firm has transitioned from a decentralized exchange for trading perpetual futures to trading equity indices, stocks, and commodities.

Hyperliquid’s HIP-3 framework hits new all-time highs each week

Yan revealed on Monday that Hyperliquid has quietly achieved an important milestone of becoming the most liquid venue for crypto price discovery in the world. He also acknowledged that Hyperliquid has grown to become the most liquid venue for perps on TradFi assets. 

Hyunsu revealed that the firm’s shift in trading stems from the Hyperliquid Improvement Proposal-3 (HIP-3), launched three months ago. The firm also acknowledged that its HIP-3 framework is leading the way, with HIP-3 Open Interest hitting new all-time highs each week. HIP-3 OP reached an ATH of $790 million earlier this week, driven recently by a surge in commodities trading.

Hyunsu noted that HIP-3 has captured over $1 billion in Open Interest, roughly $25 billion in total trading volume, and more than $3 million in total fees. He added that users can now also access trade equities or get exposure to precious metals.

Hyunsu championed Hyperliquid’s token-burning mechanism, which burns HYPE tokens based on protocol fees. The firm uses nearly 97% of fee revenue to buy back HYPE and remove tokens from circulation. He argued that the initiative is a deflationary mechanism not found in any other blockchain ecosystem. Hyunsu also believes that the firm’s 24/7 availability in traditional markets helps traders achieve fairer spot prices outside regular hours, even on weekends when traditional markets are often closed.

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