econews. Hyperliquid's Layer-1 (L1) blockchain and DEX combine the speed, liquidity, and user-friendly features of centralized exchanges -- such as Coinbase (COIN-7.49%) -- with the flexibility and decentralization of blockchain platforms like Ethereum (ETH-2.57%).
But while Ethereum's L1 blockchain can process only 15 to 30 transactions per second, Hyperliquid can process up to 200,000 orders per second via HyperCore, a specialized execution layer optimized for order matching, risk management, and clearing processes.
Like Ethereum, Hyperliquid is a proof-of-stake (PoS) blockchain. However, Hyperliquid uses a custom PoS consensus algorithm, HyperBFT, which was built from the ground up to achieve much higher speeds with lower latency. It also allows Ethereum-compatible smart contracts and decentralized apps to run on its blockchain through HyperEVM (Ethereum Virtual Machine).
Hyperliquid initially distributed its HYPE token, which is used for staking and paying gas fees on HyperEVM, through airdrops for its DEX traders. HYPE's value increased as Hyperliquid's blockchain attracted more active traders and developers.
Why is HYPE soaring even higher?
HYPE's price has risen more than 230% over the past 12 months. Four catalysts drove it higher.
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First, Hyperliquid launched the Aligned Quote Assets v2 (AQAv2) framework with Coinbase and Circle (CRCL-7.35%) to start earning yield on the reserves backing the $6.7 billion in USD Coin (USDC-0.01%) deposited across its blockchain. Hyperliquid is using that interest to fund its annual buybacks of about $180 million in HYPE tokens, equivalent to about 10% of its current market cap of $18 billion. Second, more institutional investors and public companies -- most notably Hyperliquid Strategies (PURR-7.48%) -- began investing in HYPE.
Third, Hyperliquid's recent HIP-3 and HIP-4 upgrades expanded its ecosystem with more support for custom prediction markets and tokenized real-world assets (RWA). Both of those markets are flourishing as the broader crypto market stays chilly. Lastly, Trump's comments suggest Hyperliquid's blockchain will become a major financial rail in the U.S. market.
Those buybacks and real-world uses indicate that HYPE still has a bright future. It will remain volatile in this choppy market, but it should hold up better than most of the other altcoins.
