Hyperliquid is erasing $1 billion in token supply, but the market is still punishing the wrong metric

Decentralized perpetuals exchange Hyperliquid is seeing its token (HYPE) drop due to stalled trading volumes while newer platforms surge with points campaigns, leading to a perception of lost market share. In response, two major developments aim to shift the narrative: Cantor Fitzgerald issued a report valuing Hyperliquid as a cash-flowing exchange, and the Hyper Foundation proposed burning approximately $1 billion worth of HYPE tokens from its fee-funded treasury, effectively removing 13% from the fully diluted supply.

Cantor Fitzgerald argues that rival platforms inflate volume with low-quality flows, whereas Hyperliquid maintains "organic" trading reflected in open interest, suggesting its users employ real leverage. The proposed token burn is largely cosmetic for fundamental investors who already discount the unspendable treasury tokens, but it improves optics by aligning headline FDV with adjusted figures and signals a commitment against future misuse of the pool.

The bullish thesis from Cantor values Hyperliquid based on its fee engine, projecting massive revenue growth over a decade if it recaptures market share and expands into spot and real-world assets (RWAs). However, the article notes that crypto markets often prioritize flows and narratives over discounted cash flow logic, and the ambitious RWA expansion faces significant regulatory hurdles that may cap its potential, leaving the token's price currently reflecting market pressure rather than long-term valuation.

(Source：CryptoSlate)