Bởi Maksym Misichenko · Nasdaq ·
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The panel consensus is that Hyperliquid's buyback mechanism, while innovative, is highly dependent on sustained trading volume and faces significant risks, including regulatory threats and market downturns. The panelists generally agree that Hyperliquid's valuation is sensitive to these factors and that its moat is not yet proven.
Rủi ro: Collapse in trading volume during market downturns, potentially leading to a significant decrease in fees and buybacks.
Cơ hội: Potential for outsized equity value compared to ETH/XRP if trading volume and fees remain durable.
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Many cryptocurrencies don't have an automatic mechanism for providing returns to holders.
Hyperliquid doesn't have that problem, but XRP and Ethereum do.
Most investors will eventually confront the issue of how much value they're actually getting when they buy a crypto token. For most coins, the answer to that question is vague.
But Hyperliquid (CRYPTO: HYPE) is different: Its protocol generates about $714 million in annualized fees thanks to the trading activity on its decentralized crypto exchange, and it routes roughly 99% of those fees toward open-market buybacks of its native Hype coin via an automated mechanism. Since its launch in late 2024, more than $1.1 billion has gone toward repurchases.
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In comparison, Ethereum (CRYPTO: ETH), with a market cap near $250 billion, and XRP (CRYPTO: XRP), at more than $80 billion, are both much larger than Hyperliquid, which has a cap of about $15 billion. But the smaller asset might be significantly undervalued. Let's do a quick investigation and figure it out.
Given Hyperliquid's annualized fees of $714 million and its current market cap, it has an implied price-to-sales ratio (P/S) of near 20, which is quite reasonable for a fast-growing tech company.
In 2025, the total fees generated by protocols operating on Ethereum's chain exceeded $6.2 billion, but almost none of that value flows to Ethereum holders. The chain's own revenue, the portion of gas (user) fees that are automatically destroyed rather than paid out to the network's validators and stakers, came to only about $93 million. The result is a P/S multiple of 2,677, a staggering figure for a network whose fee economics are under growing scrutiny despite (or perhaps because of) its gas fees falling by 99% during the past five years.
So, the amount of Ether coins that will be burned by future transactions on the chain will likely not be a major driver of returns for holders as the chain scales up even further and forces the average paid fee per transaction even lower. Of course, Ethereum is still probably a fairly valuable network since it's the home to more than $42 billion in decentralized finance (DeFi) value.
In contrast, fees on the XRP Ledger (XRPL) are intentionally designed to be negligible to incentivize financial institutions to use the network with vast sums of capital, and its fees are burned rather than distributed. For instance, on May 26, it only incurred $536 in transaction fees. As a result, it isn't meaningful to calculate a P/S, as it would be even more comically high than Ethereum's.
Thus, XRP's value, to the extent it exists, rests on how well the actions of its issuer, Ripple, can convince investors that the coin is going to increase in value.
Therefore, on the basis of tokenomics alone, the case for Hyperliquid being worth more than XRP or Ethereum is hard to rebut.
If we expand our valuation discussion to be a bit wider than tokenomics alone, Hyperliquid is still very promising, but its immaturity compared to Ethereum and XRP starts to look like an impediment to its valuation in the near term.
Hyperliquid is expanding, having launched its Ethereum Virtual Machine (EVM) compatible smart-contract environment in early 2025, enabling it to run smart contracts. And it recently rolled out the capability for native prediction markets. Its DeFi layer remains small, with just $1.7 billion in value, and because it only has $6.8 billion in stablecoins on its chain, it will probably continue to depend on Ethereum's infrastructure for both its liquidity as well as its smart-contract tooling.
When crypto enters a downturn, trading activity on Hyperliquid's platform will likely fall, causing its pace of buybacks to slow. Ethereum and XRP will experience the same issue of lower activity leading to even less burning of their coin supply, but the effect won't matter much because the amounts being burned were proportionally very small to begin with.
Against XRP, Hyperliquid's valuation case is stronger because it offers measurable economic returns linked to the network's utilization that XRP simply cannot match. Hyperliquid should probably be worth more than XRP.
Against Ethereum, however, the argument is harder to make since Ethereum's moat is its ecosystem rather than its fee structure, and that moat remains very formidable. But regardless of where Hyperliquid ranks, its fee economics earn it a serious look.
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Alex Carchidi has positions in Ethereum. The Motley Fool has positions in and recommends Ethereum, Hyperliquid, and XRP. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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"Hyperliquid's buyback model overstates durability because trading-fee revenue lacks the sticky ecosystem that supports Ethereum's value."
The article highlights Hyperliquid's automated buybacks from $714M annualized fees as superior tokenomics versus Ethereum's $93M burn or XRP's negligible fees, implying HYPE's $15B cap deserves re-rating above ETH and XRP. Yet this ignores execution risks: Hyperliquid's $1.7B DeFi TVL and $6.8B stablecoins tie it to Ethereum infrastructure, while its revenue hinges entirely on perpetuals trading volume that collapses in downturns. Ethereum's moat lies in developer activity and $42B DeFi, not fees. HYPE's P/S of 20 looks reasonable only if volumes prove durable, which history of DEXes suggests is unlikely beyond cycles.
Sustained bull-market volumes could keep buybacks compounding faster than ETH's ecosystem growth, allowing HYPE to close the valuation gap before any downturn hits.
"Hyperliquid's superior tokenomics are real but fragile—entirely dependent on sustained trading volume that crypto bear markets historically destroy, making the 20x P/S valuation contingent on a bull-market assumption the article doesn't stress-test."
The article conflates two separate valuation problems. Yes, Hyperliquid's 20x P/S on $714M annualized fees looks reasonable versus Ethereum's absurd 2,677x P/S. But that comparison is misleading: Ethereum's value isn't in fee burn—it's in $42B DeFi TVL and network effects. Hyperliquid's $1.7B DeFi layer and dependency on Ethereum's liquidity infrastructure suggest it's a *trading venue*, not a settlement layer. The real risk: buyback mechanics only work if trading volume sustains. One bear market and those $714M fees crater—potentially 50-70% based on 2022 precedent. The article acknowledges this but treats it as a minor headwind rather than an existential threat to the valuation thesis.
Hyperliquid's buyback mechanism could be a value trap: if fees collapse 60% in a downturn (as they did in 2022), the P/S multiple re-rates violently downward, and the buyback becomes a forced seller into weakness rather than a support mechanism.
"Hyperliquid's valuation relies on a reflexive buyback loop that functions more like a trading rebate program than a sustainable, long-term store of value."
The article conflates 'protocol revenue' with 'investor yield,' a dangerous trap for retail. Hyperliquid’s buyback mechanism is a powerful marketing tool, but it is effectively a circular economy: traders generate fees, which are used to buy the native token, which then supports the price of the asset used to pay those same fees. At a 20x P/S, you are paying for a high-velocity trading engine that is highly sensitive to market volatility. Unlike Ethereum, which functions as a settlement layer with massive network effects and L2 scaling, Hyperliquid is a specialized application-specific chain. If trading volume dries up, the 'buyback machine' stalls, leaving holders with a token that lacks Ethereum's deep DeFi liquidity and institutional trust.
If Hyperliquid successfully captures the majority of perpetual futures trading volume from centralized exchanges, its fee-capture model could create a reflexive feedback loop that justifies a massive premium over stagnant, non-revenue-generating assets.
"Hyperliquid's upside hinges on sustained, high trading volumes funding buybacks; if volumes falter, the buyback flow collapses and HYPE risks underperforming ETH and XRP."
While the piece makes a compelling case that Hyperliquid’s fee-driven buybacks could translate into outsized equity value vs ETH/XRP, the narrative rests on fragile, circular math. On-chain revenue can shrink fast in a downturn, and the 99% buyback flows depend on sustained trading activity and liquidity capture. The moat is not yet proven: Hyperliquid relies on Ethereum’s tooling and liquidity; any scaling delay, regulator action on DeFi, or competition from other L1s/L2s could choke fees. Valuation mixes tokenomics with ‘it’s early’ optimism; as a standalone asset, HYPE’s upside is highly contingent on continued volume growth and broad crypto cyclicality—riskier than it looks.
Strongest counter: even if Hyperliquid proves resilient, a bear market could collapse trading volumes, making buybacks insufficient to sustain value; moreover, Ethereum's network effects and XRP's real-use adoption may outpace HYPE's ability to monetize fees, making a bullish case questionable.
"Buybacks create net supply reduction distinct from prior cycles, but regulatory targeting of perps remains an unaddressed single-point failure."
Gemini's circular economy framing underplays how fee buybacks still reduce circulating supply even if traders are the source, unlike pure marketing spends. This creates a structural difference from 2022 DEX precedents where no such mechanism existed. The bigger unmentioned risk is that any CFTC action targeting on-chain perps could hit Hyperliquid harder than Ethereum's broader settlement layer.
"Supply reduction via buybacks is structurally different from 2022, but only defensible if fee sustainability—not mechanism novelty—holds through a downturn."
Grok's supply-reduction argument has merit, but conflates mechanism with durability. Yes, buybacks differ from 2022 DEXes—but that's only valuable if fees persist. Gemini's circular economy critique stands: traders fund buybacks that support the token traders use. The CFTC risk Grok flags is real, but underspecified. Regulatory action targets *activity*, not infrastructure. Hyperliquid's on-chain perps are more exposed than Ethereum's settlement layer, agreed—but the timeline and probability matter. Without specifics, it's a tail risk, not a valuation driver.
"Hyperliquid's buyback mechanism acts as a reflexive volatility dampener that may provide superior downside protection compared to Ethereum's inflationary model."
Grok and Claude are missing the structural reality of the 'circular economy' Gemini identified: Hyperliquid’s buybacks are essentially a tax on liquidity provision. If the token price drops, the cost of trading increases relative to volume, which ironically accelerates the burn rate. This reflexivity isn't just a marketing tool; it’s a volatility dampener that could theoretically sustain HYPE during drawdowns better than Ethereum’s inflationary issuance, provided the platform maintains its competitive edge in execution speed.
"Regulatory enforcement risk could kill Hyperliquid's buyback model as liquidity migrates to compliant or off-chain venues, making bear market volumes even more ruinous than price drawdowns."
Responding to Grok: you flag CFTC action on on-chain perps as existential, but not quantified. The bigger flaw is enforcement asymmetry: if regulators push on-chain venues, liquidity migrates to compliant layers or off-chain venues, destroying fee traction and buybacks even before a price crash. The model assumes ongoing permissionless activity; in a real-world regime shift, Hyperliquid could be stranded with sunk costs and a shrinking user base, far more painful than a 50% drawdown in volume.
The panel consensus is that Hyperliquid's buyback mechanism, while innovative, is highly dependent on sustained trading volume and faces significant risks, including regulatory threats and market downturns. The panelists generally agree that Hyperliquid's valuation is sensitive to these factors and that its moat is not yet proven.
Potential for outsized equity value compared to ETH/XRP if trading volume and fees remain durable.
Collapse in trading volume during market downturns, potentially leading to a significant decrease in fees and buybacks.