HYPE Holders Brace for Impact Ahead of Looming Token Unlocks

Hyperliquid, a perpetuals exchange and Layer 1 blockchain whose HYPE token has surged more than 1,000% since late 2024 and reached an all-time high earlier this week, is slowly approaching a sizable token unlock at the end of November.

According to data from DefiLlama, approximately 238 million HYPE tokens — or about 23.8% of the total supply — are allocated to core contributors, with the first unlock scheduled for November 29.

If spread evenly over two years, about 9.9 million HYPE tokens would enter the market each month. At the current price of $45, that’s roughly $446 million in potential selling pressure every month, totaling around $10.7 billion through late 2027.

To support HYPE, Hyperliquid has an Assistance Fund, a protocol-managed treasury that uses trading fees to repurchase tokens on the open market. To date, the fund has purchased over $1.3 billion, or roughly $2 million a day on average.

Yet, as Delphi Digital analyst @simononchain noted in an X post on Aug. 21, the fund’s buying power is “still far from being able to counter the magnitude of looming unlocks.”

In its next network upgrade, the project plans to redirect nearly all protocol revenue into this fund, reducing the Hyperliquidity Provider vault’s allocation to 1% from 3%. Even so, it doesn’t seem that the fund alone will be enough to absorb the influx from the upcoming unlocks.

Corporate Treasuries

Although corporate treasuries could add some demand, their activity might still be small compared to the amount of new tokens entering circulation. In June, Eyenovia bought just over 1 million HYPE, then added another 265,872 HYPE at the end of the month. Lion Group reported around $5 million in combined HYPE, SOL, and SUI purchases as of late June.

Hyperliquid Strategies, the Nasdaq-listed entity formed from Sonnet BioTherapeutics and Rorschach I, is expected to hold 12.6 million HYPE tokens and $305 million in cash for future purchases. However, it’s not clear how quickly or often those purchases will happen.

In total, the publicly reported corporate buys for June amount to roughly $50 million in HYPE tokens, which is a small fraction of the nearly $450 million in potential monthly selling pressure from the core contributor unlocks. Even with treasury plans like Hyperliquid Strategies’ in the pipeline, the token may still face pressure once the unlocks begin.

The project, which famously turned down venture capital funding at its launch, is also expanding its validator set and adjusting derivatives funding rates to attract more traders. In the meantime, another 38.888% of HYPE tokens are also set aside for future emissions and community rewards, meaning more supply remains to be distributed over time.

The Hyperliquid team did not respond to multiple requests for comment from The Defiant. As of press time, HYPE is trading at $44.8, down 12% from its all-time high.