Multicoin Capital has released a research report projecting a base case valuation of $319 for Hyperliquid’s native token HYPE by 2028, representing roughly 4x upside from current prices. The thesis hinges on Hyperliquid’s revenue model, which closely resembles that of centralized exchanges (CEXs).
Core Valuation Drivers: A CEX-Like Profit Model
The report highlights several key supports:
- High trading share: Hyperliquid commands a significant portion of the perpetual swap market with steadily rising fee income.
- 99% protocol revenue used for buybacks and burns: The vast majority of protocol revenue is used to repurchase and burn HYPE tokens, creating deflationary pressure.
- HIP-3 market deployment mechanism: Users stake HYPE to list new trading pairs, boosting token utility and governance participation.
- USDC reserve yield: Hyperliquid holds large USDC reserves, earning additional yield via DeFi protocols or lending markets, part of which supports ecosystem incentives.
- Wallet onboarding expansion: Continuous improvements to the frontend wallet experience lower entry barriers for traders and liquidity providers.
Valuation Risks: Revenue Growth Is the Wildcard
Despite the clear model, the report explicitly warns that the $319 base case is highly dependent on sustained revenue growth. Slowing trading volume, increased competition (from dYdX, GMX, etc.), or declining USDC yields could shrink buyback capacity and undermine price support. Regulatory uncertainties also add downside risk.
In summary, Multicoin Capital’s analysis offers a useful framework, but investors should recognize that long-term forecasts involve multiple variables. Whether HYPE can realize the projected 4x return ultimately hinges on Hyperliquid’s execution and market dynamics.