SKN | Binance Threatens Hyperliquid Revenue Model as HYPE Buybacks Reach New Highs

Key Points:

• CoinMarketCap research chief Alice Liu says Hyperliquid’s strong network activity does not necessarily translate into sustained HYPE price performance.
• Binance has rapidly captured liquidity and volume in tokenized real-world-asset perpetuals, taking roughly 50% of the market despite Hyperliquid remaining the leading decentralized venue.
• Hyperliquid’s reliance on network activity and trading revenue to support token buybacks could make HYPE more vulnerable if centralized exchanges continue taking market share.

Hyperliquid Faces a Revenue Challenge

Hyperliquid has emerged as one of the strongest decentralized venues for perpetual futures, but growing competition from centralized exchanges could challenge the revenue base supporting its HYPE token economics.

Alice Liu, head of research at CoinMarketCap, said Hyperliquid’s network activity and HYPE price should be viewed separately because strong usage does not automatically translate into sustained token appreciation.

“For Hype [Hyperliquid], there are two things I want to mention. Number one is the activity, and number two is the price,” Liu said, highlighting the disconnect that can develop between protocol fundamentals and token performance.

That distinction becomes particularly important as Hyperliquid relies on ecosystem activity to support a token-buyback mechanism that has helped drive HYPE toward record levels.

Binance Gains Ground in RWA Perpetuals

Liu identified tokenized real-world assets as one of the most important competitive battlegrounds for Hyperliquid.

The market for perpetual contracts tied to tokenized stocks, exchange-traded funds and indexes has expanded rapidly, creating a new source of trading activity for crypto platforms.

Hyperliquid has historically been a major destination for these products, particularly within decentralized finance. However, Binance’s entry has quickly shifted trading activity.

According to Liu, once Binance launched its own RWA perpetual products, volume and liquidity moved rapidly toward the centralized exchange. Binance now accounts for approximately 50% of the market, according to Liu.

Hyperliquid nevertheless remains the leading platform within the decentralized exchange segment, preserving a significant position as traders seek onchain alternatives to centralized venues.

Revenue Matters for HYPE

The competitive shift could matter beyond trading-volume rankings because Hyperliquid’s network economics are closely connected to the investment case for HYPE.

The token has benefited from strong activity, growing liquidity and buybacks, creating a feedback loop in which increased trading activity supports protocol revenues while buybacks can strengthen demand for the token.

But that mechanism becomes more vulnerable if competitors capture a larger share of the underlying trading activity.

Centralized exchanges have advantages in liquidity aggregation, execution infrastructure and user reach, potentially allowing them to absorb high-volume markets faster than decentralized competitors. Binance’s rapid gains in RWA perpetuals illustrate how quickly liquidity can migrate when a major centralized venue enters an emerging market.

For HYPE holders, the key question is therefore not simply whether Hyperliquid continues to grow, but whether it can maintain enough of the highest-value trading activity to preserve its revenue advantage.

Bitcoin Recovery Provides Broader Support

Liu’s comments come against a backdrop of improving sentiment across the broader cryptocurrency market.

Bitcoin recently reached approximately $81,600 after rallying about 28% from its mid-August levels. Although the cryptocurrency failed to maintain the $80,000 level, Liu believes the market may have already established a significant low.

She pointed to Bitcoin’s decline toward $59,000 in June, roughly 53% below its October all-time high of $126,100, as a potential cycle bottom. Market sentiment has also improved, with the CoinMarketCap Crypto Fear & Greed Index moving back into Greed after spending much of the year in Fear.

That recovery could provide a favorable backdrop for altcoins and decentralized trading platforms. However, Hyperliquid’s longer-term valuation may increasingly depend on whether its decentralized market can withstand competition from centralized exchanges.

Outlook

Hyperliquid remains a dominant force in decentralized perpetual trading, but Binance’s rapid expansion into tokenized-asset derivatives introduces a potentially important threat to its revenue growth. If centralized exchanges continue absorbing RWA perpetual volume, investors may place greater emphasis on Hyperliquid’s ability to retain liquidity, generate sustainable activity and maintain the revenue base supporting HYPE buybacks.