Hyperliquid Unlocks 1.2M HYPE Amid Capital Flight at Rival Lighter

Hyperliquid Labs' scheduled distribution unfolds against a stark backdrop: a leading rival saw one-fifth of its total value locked exit within a day of its own token generation event.

Hyperliquid Labs said on Dec. 28 that it had unstaked 1.2 million HYPE tokens to be distributed to team members on Jan. 6, marking the protocol’s second internal allocation since the token’s launch.

The announcement, shared via Discord, also confirmed that any future team distributions will occur on the sixth day of the month. At current prices, the tranche is valued at roughly $31 million and represents a small fraction of the roughly 238 million HYPE tokens already in circulation.

Notably, Hyperliquid’s latest token unlock event stands in sharp relief to the frenetic capital rotation currently destabilizing the broader perp DEX sector, which saw monthly volume drop from a record 1.2 trillion in October to $1.13 trillion in November, according to a Dune Analytics dashboard.

Hyperliquid to distribute second HYPE payouts

Hyperliquid introduced the HYPE token in November 2024 through a widely anticipated community airdrop that set the tone for its broader distribution model. The protocol earmarked nearly a quarter of HYPE’s total 1 billion token supply, approximately 237 million tokens, for core contributors under a multi-year vesting schedule.

This allocation was balanced by a significant 31% of the supply distributed directly to early protocol adopters and community members in the initial airdrop. HYPE functions as the network’s governance and staking asset, with a unique fee model that directs 97% of trading fees back into ecosystem incentives, including token buybacks and burns.

Hyperliquid Labs has also moved to bring structure to how team allocations enter the market. “Moving forward, distributions, if any, will take place on the 6th of the month,” Hyperliquid co-founder iliensinc said on Discord.

Further bolstering its tokenomics, the Hyper Foundation recently proposed burning $1 billion worth of HYPE that had accumulated in its Assistance Fund, a mechanism that permanently removes tokens from circulation. If executed, this deflationary action would directly counterbalance new supply entering the market from vesting events, a key consideration for long-term token holders.

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Lighter weathers market turbulence

The structured nature of Hyperliquid’s activity unfolds as its competitive landscape experiences significant turbulence. One of its closest rivals, Lighter, launched its own token generation event with a $675 million LIT airdrop on December 30.

The aftermath was immediate and stark.

Onchain analytics from Bubblemaps revealed that approximately $250 million was withdrawn from the Lighter platform within 24 hours, comprising roughly $201.9 million from Ethereum and $52.2 million from Arbitrum. This represented an outflow of about 20% of Lighter’s total value locked.

Bubblemaps CEO Nicolas Vaiman noted that such outflows following a major airdrop are not uncommon, as users “rebalance hedging positions and move capital to the next farming opportunity.” He added that similar capital flight was observed after the launches of both Hyperliquid and Aster’s tokens.

CertiK senior blockchain security researcher Natalie Newson expanded on the trend, telling CoinDesk, "Large withdrawals after TGEs are usually driven by airdrop farmers and early participants exiting their positions... Without clear insight into new token distributions, there's a fog that allows a few insiders to operate and capture outsized gains shortly after launch."

Meanwhile, despite the inroads made by competitors, Hyperliquid retains its position as the heavyweight in the arena, maintaining the title of the largest decentralized perps exchange by accumulated volume. HYPE has a market capitalization of $6.2 billion and a fully diluted valuation of $25.1 billion, according to CoinMarketCap data.

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