Core Thesis: HYPE at $319 by 2028
Multicoin Capital published a research report projecting a base-case valuation of $319 for Hyperliquid's native token HYPE by 2028, representing approximately 4x upside from current levels. The report argues Hyperliquid is evolving from a decentralized perpetual swap exchange into a platform-level protocol that mirrors the profitable model of centralized exchanges (CEX). This transformation is the primary source of its valuation premium.
Four Pillars Supporting the Valuation
The report breaks down the valuation into four key drivers:
- Dominant trading share: Hyperliquid has captured a significant portion of the derivatives DEX market. High activity and deep liquidity form the revenue foundation.
- 99% protocol revenue used for buyback and burn: Unlike most DeFi protocols, Hyperliquid allocates nearly all protocol revenue (99%) to repurchasing and burning HYPE, creating persistent deflationary pressure. This directly reduces circulating supply and supports the token price over time.
- HIP-3 market deployment mechanism: HIP-3 allows anyone to create markets and earn a share of trading fees, effectively a 'market-as-a-service' model. It activates long-tail asset trading demand, generating additional revenue streams.
- USDC reserve yield and wallet entry expansion: Hyperliquid holds substantial USDC reserves that generate yield through interest-bearing strategies. Meanwhile, wallet integration (e.g., HyperEVM ecosystem) lowers the barrier for new users, expanding the user base.
The report highlights that these four factors create a self-reinforcing flywheel: more revenue → more buyback/burn → supply reduction → price appreciation → more traders → more revenue.
Risk Factors: Revenue Delivery Is Key
Despite the compelling model, Multicoin Capital acknowledges that the valuation is highly contingent on revenue assumptions. If Hyperliquid's revenue growth disappoints due to competition, volume decline, or regulatory hurdles, the buyback scale will shrink dramatically and the flywheel could reverse. Additionally, token inflation from unlocks and rewards will partially offset the buyback effect. The report concludes that HYPE's long-term value hinges on Hyperliquid's ability to sustain high market share while expanding revenue sources (e.g., monetizing wallet entry).