tl;dr
Despite losing market share to rivals, Hyperliquid remains the most investable decentralized perpetual futures exchange due to strong open interest, ecosystem expansion, and innovative tokenomics, according to analyst Patrick Scott.
**Hyperliquid Remains the Most Investable Perp DEX Despite Market Shifts, Says Analyst**
In a rapidly evolving decentralized finance (DeFi) landscape, Hyperliquid has emerged as a standout player in the perpetual futures (perp) market, according to a new thesis by DeFi analyst Patrick Scott. Despite losing significant market share to rivals, Scott argues that Hyperliquid remains the most investable decentralized exchange (DEX) for perpetual futures, citing strong fundamentals and strategic initiatives that set it apart from competitors.
### The Perp DEX Market in Flux
Perpetual futures, or perps, have become a cornerstone of crypto trading, offering traders the ability to speculate on price movements without expiration dates. As traders increasingly shift away from centralized exchanges (CEXes) like Binance, decentralized platforms hosting perps—known as perp DEXes—have seen explosive growth.
Scott notes that perp DEXes now account for over 20% of perpetual trading volume, a sharp rise from less than 2% in 2022. Hyperliquid, which issues the HYPE token, has been a key driver of this expansion. However, recent shifts have sparked debate about the exchange’s long-term viability.
Hyperliquid’s share of perp DEX volume plummeted from 45% to 8% in recent weeks, while Binance-affiliated rival Aster saw its weekly trading volume surge to over $270 billion. Other upstarts, such as Lighter and edgeX, also reported triple-digit percentage gains in activity. These developments have raised questions about Hyperliquid’s competitive edge.
### Why Hyperliquid Still Stands Out
Despite the market turbulence, Scott contends that Hyperliquid’s fundamentals make it a compelling investment. He highlights three key factors:
1. **Strong Revenue and Liquidity Metrics**: While volume and revenue are volatile metrics, Scott emphasizes open interest as a more reliable indicator of liquidity and user stickiness. Hyperliquid still commands about 62% of the perp DEX open interest market, signaling sustained user engagement.
2. **Expansion Plans and Ecosystem Growth**: Hyperliquid is actively expanding its infrastructure. The HyperEVM network, which hosts over 100 protocols and $2 billion in total value locked (TVL), underscores its growing ecosystem. Additionally, the USDH stablecoin—backed by reserves held with BlackRock and Superstate—aims to strengthen the platform’s financial stability.
3. **Innovative Tokenomics**: The Hyperliquid Improvement Proposal (HIP-3) allows developers to launch new perp markets by staking large amounts of HYPE, creating a “supply sink” that could bolster the token’s long-term value.
Scott acknowledges risks, including the possibility of a material drop in open interest or revenue, or USDH failing to gain liquidity. However, he argues that Hyperliquid’s approach is more sustainable than competitors relying on heavy incentive programs to attract users.
### The Road Ahead
As the perp DEX market continues to evolve, Hyperliquid’s ability to maintain its open interest leadership and execute its expansion plans will be critical. Scott’s thesis positions the exchange as a resilient player, but its success will depend on navigating the challenges of a crowded and dynamic space.
For now, however, the analyst’s analysis suggests that Hyperliquid remains a top choice for investors seeking exposure to decentralized perpetual futures.