@HyperliquidX has officially accumulated $521.85 million in value through its buyback mechanism since launch.
Data shared on X reveals the protocol has repurchased 15.26 million $HYPE tokens through collected fees, offsetting 5.64% of circulating supply.
The buybacks have run consistently from March through October 2025, showing sustained accumulation and strong fee performance.
. @HyperliquidX ‘s buyback mechanism has accumulated $521.85M in value since launch.
Key metrics:
• 15.26M $HYPE repurchased via protocol fees
• 5.64% of circulating supply offset
• Steady accumulation from March-October 2025The chart shows consistent buyback activity.… pic.twitter.com/UVYZAIocUB
— Tokenomist (@Tokenomist_ai) October 18, 2025
Steady Buybacks Reflect Active Market Demand
Hyperliquid’s buyback system works directly from protocol-generated fees, automatically purchasing $HYPE from the market and adding deflationary pressure.
The accumulated $521.85M represents months of consistent performance. According to data shared by Tokenomist, the chart shows steady upward momentum, a signal of both platform usage and organic demand.
Since March, buybacks have accelerated in tandem with trading volume and fee income. Analysts note this mechanism has helped stabilize $HYPE price volatility while reinforcing Hyperliquid’s long-term value framework.
The 5.64% offset of circulating supply is a strong indicator that Hyperliquid’s fee model is not just revenue-driven but actively redistributive to holders.
FUD Around Protocol Revenue Prioritization
As buyback metrics spread, discussions emerged online suggesting Hyperliquid might prioritize protocol revenue over trader benefits.
Hyperliquid founder Jeff, known as @chameleon_jeff, directly addressed these claims, calling them FUD and offering a transparent breakdown of recent events.
Debunking the FUD that Hyperliquid prioritizes protocol revenue over traders
On 10/10, Hyperliquid ADLs net made users hundreds of millions of dollars by closing profitable short positions at favorable prices. If more positions had been backstop liquidated, HLP could have made…
— jeff.hl (@chameleon_jeff) October 18, 2025
He cited the October 10 ADL (Auto-Deleveraging) event as an example of how the system works in favor of traders, not against them.
“On 10/10, Hyperliquid ADLs net made users hundreds of millions of dollars by closing profitable short positions at favorable prices,” Jeff wrote.
According to him, had the platform used backstop liquidation instead, Hyperliquid’s liquidity providers (HLP) could have earned “hundreds of millions more” in unrealized PnL. But the team deliberately avoided that, reducing exposure risk and prioritizing user profits.
“ADL passed on HLP’s potential pnl to users while decreasing HLP’s exposure, a win-win,” Jeff added.
How Hyperliquid’s ADL Works
The Auto-Deleveraging mechanism is a critical risk management component used across derivatives platforms.
Hyperliquid’s ADL queue determines which positions are closed first during liquidation events, using a formula based on leverage used and unrealized profit and loss (PnL).
This design ensures traders with higher risk exposure and higher unrealized profits are first in line for position closure, mirroring how most centralized exchanges operate.
Jeff clarified that the formula’s simplicity is deliberate, it prioritizes reliability and transparency over complexity.
“The ADL queue has always followed a formula similar to what most CEXs use,” he said. “Simple formulas are more robust and easier to understand.”
Balancing Profitability and Risk
Jeff’s defense of Hyperliquid’s model highlights an ongoing tension in DeFi, balancing protocol sustainability with user fairness.
While some critics argue that buyback systems and fee accruals can lean toward maximizing protocol gains, Hyperliquid’s ADL framework shows the opposite.
By limiting exposure and allowing users to retain profits during the October event, Hyperliquid effectively sacrificed internal gains to maintain system health.
That approach, Jeff argues, keeps the platform aligned with trader outcomes and mitigates liquidation cascades that could destabilize markets.
Community Feedback and Ongoing Research
Despite the defense, community discussions remain active. Some users have proposed more complex ADL logic, such as partially offsetting long and short positions across correlated assets to reduce forced closures.
Jeff acknowledged the feedback but cautioned against overengineering.
“Most of the suggested improvements increase complexity,” he wrote. “I don’t know of other major venues that use more complex logic for ADL. Simpler systems are more understandable.”
Still, he confirmed that research is ongoing to assess whether any substantial improvements would justify the added complexity.
This openness reflects a maturing phase for Hyperliquid, which continues to emphasize user-centric iteration rather than opaque back-end adjustments.
Buyback Mechanism as a Strength Signal
The success of the buyback program has become a central narrative in Hyperliquid’s growth story.
Accumulating over half a billion dollars in buyback value in less than a year places Hyperliquid among the strongest derivatives protocols by internal liquidity generation.
Repurchasing 15.26 million $HYPE since inception has provided measurable support for the token’s market structure, reducing supply while increasing perceived value among holders.
Even without direct token burns, the consistent buyback inflow acts as a soft deflationary force, incentivizing longer-term holding and reinforcing token utility within the ecosystem.
Market analysts view the buyback as a proxy for platform health, as protocol fees reflect real trading volume, the buyback ratio mirrors user activity in real time.
From Controversy to Clarity
Hyperliquid’s communication following the ADL event was key in quelling the FUD.
By breaking down the internal decisions and exposing the trade-offs between profit-taking and risk reduction, Jeff reframed the debate.
What initially appeared as a protocol favoring revenue was, in fact, an example of responsible risk control that prioritized users’ realized gains.
This transparency has helped stabilize sentiment across the community and reinforced Hyperliquid’s reputation as one of the few derivatives protocols openly publishing both buyback data and internal explanations behind key decisions.
Broader Takeaways for DeFi Protocols
Hyperliquid’s handling of the October 10 ADL event, and the subsequent $521.85M buyback milestone, offers a few broader lessons for the space:
1. Transparency builds trust. Sharing details of liquidation logic and PnL distribution helps counter misinformation.
2. Simplicity scales better. Complex liquidation systems risk introducing errors and confusing users.
3. Sustainable incentives matter. A buyback tied to real protocol fees reflects genuine economic performance.
4. Trader-first risk models attract loyalty. Prioritizing user outcomes, even at protocol cost, strengthens long-term ecosystem credibility.
From March to October 2025, Hyperliquid has demonstrated measured growth, transparent operations, and strong market discipline.
The $521.85M buyback isn’t just a milestone, it’s proof of a functioning model that rewards real usage over speculative hype.
Founder Jeff’s insistence on maintaining a simple yet transparent ADL system underscores Hyperliquid’s focus on reliability and trader trust.
As DeFi derivatives continue to evolve, Hyperliquid’s balance between protocol profitability and user protection could set a new standard for how decentralized exchanges manage growth under scrutiny.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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