In late November 2024 the decentralised exchange (DEX) Hyperliquid carried out a genesis airdrop of its native token, HYPE. Roughly 31% of the total supply went to community participants, allocated in proportion to points earned at an early stage. The giveaway was the largest on record, worth about ~$10.8bn at the token’s peak. Since then the platform has steadily set new records for user acquisition and trading volume.
This article examines how the airdrop landscape has evolved, dissects Hyperliquid’s generosity, outlines its L1 blockchain with the HyperBFT consensus, and reviews the venue’s spot and futures functionality.
From life‑changing money to dashed hopes
Free token distributions to users have been one of the industry’s key growth levers, allowing projects to expand their communities quickly while creating demand for their assets. Such campaigns also pulled in crowds chasing “easy money”, many of whom learned the basics of Web3 interactions, DeFi and NFTs.
Until recently the biggest airdrop on record was from the DEX Uniswap. At the end of DeFi summer in September 2020, the team unexpectedly awarded 400 UNI to anyone who had interacted with the exchange at least once. At the time the token was priced around ~$7, instantly turning hundreds of thousands of people into owners of several thousand dollars. At its peak, with UNI at $42.88, the airdrop was worth about ~$6.43bn.
According to CoinGecko, the runner-up for some time was the 2022 distribution of ApeCoin (APE) worth about ~$3.54bn. Holders of the elite Bored Ape and Mutant Ape NFTs received up to 10,950 tokens, valued at a maximum of ~$258,737—enough then to buy a collectible “ape” with a typical price of about ~$200,000.
Third place belonged to the ~$2bn 2021 airdrop from the DEX dYdX, which saw the DYDX token peak around ~$26.80. Users did not get extravagantly rich: the team imposed payout limits with a five-year vesting schedule.
The golden age of airdrops ended on 23 March 2023 with Arbitrum’s ARB retrodrop. Valued around ~$1.97bn, it was then the fourth-largest event and the biggest of 2023. Users could receive roughly ~$1000 for simple interactions with several dapps in the ecosystem, the use of cross-chain bridges and about 30 transactions over a year.
As more projects copied common airdrop models, the process turned into a mechanical grind powered by multi-account farms. Teams inevitably lost users straight after distribution: people took quick profits and moved on in search of the next opportunity.
Some venture investors who had provided capital adopted bad habits after the TGE. Tokenomics often allocated large shares to investors, who took profits and triggered cascading sell-offs. In 2024 a narrative emerged among “hamster traders” to short newly issued tokens, as the chance of appreciation fell alongside ever more bloated FDV.
Many market participants had had enough. VC was publicly criticised for dumping on the market, and developers began to adopt new approaches to airdrops: points systems, anti‑sybil measures and strict eligibility rules. Entry barriers rose; winning a reward increasingly required locking significant sums in a project’s ecosystem for extended periods.
The magic of life-changing money finally evaporated with the launches of Starknet and zkSync tokens. Not only did projects start losing prospective users even before distribution, but teams also struggled under a torrent of criticism. Social media exploded with outrage from crowds who had waited years for these L2 drops. People expected something akin to the last big Arbitrum airdrop; reality fell short.
A well-timed hype cycle
Towards the end of 2024, long-awaited material rewards landed for farmers of the DePIN protocol Grass. Testnet participants shared unused internet bandwidth for 17 months and earned points. A browser extension, and later a desktop app, collected data in the background for subsequent sale to AI firms training LLMs. A mobile app is planned. At the time of writing, Stage 2: Capturing The Web—the second phase of the points programme—is under way.
The ingrained habit of dumping tokens on listing worked against users this time. On 28 October, the largest Solana-based airdrop by participant count took place, and GRASS listed on major exchanges around $0.65. Roughly 1.5m wallets that claimed relatively small rewards could have made ~480% in ten days, with a peak price of $3.77.
Wynd Labs needed to satisfy an audience of about ~2.5m users. Since the volume of tokens distributed could not be large, the only obvious path was a sharp price rise. Timing was shrewd—just before the US presidential election and bitcoin’s looming assault on $100,000. The product was also tied to 2024’s three hottest themes: AI, DePIN and the Solana ecosystem—perhaps a helpful mix.
For airdrop hunters this was a first positive signal, but the main sentiment shift arrived a month later.
On 29 November 2024, Hyperliquid Labs, the lead developer of the Hyperliquid L1 and DEX, airdropped the HYPE token. 310m coins out of a 1bn maximum supply were earmarked for more than 94,000 users who had interacted with the platform.
According to ASXN Data, most participants (56.6%) received up to 100 tokens (~$3500 at the time of writing). The top band—10,000 tokens (~$350,000 at the time of writing)—went to about ~4,000 users. On average, participants received 2,881.73 tokens, worth roughly ~$100,000 at the time of writing; the median award was close to $2,250.
Per CryptoRank, 76.2% of the total allocation is reserved for the community, while the team’s 23.8% vests until 2028, with the first unlock a year after launch.
A striking feature of the Hyperliquid airdrop is the weight given to the community rather than private investors and VC. The initial refusal to list on centralised exchanges was unusual, too: first announcements on BingX, Bitget and KuCoin appeared only two weeks after the drop.
The drop mechanics were simple. Users who had pre‑registered for the Genesis Event received tokens straight into their spot accounts on the exchange. The jubilant social‑media posts that followed looked like this:
By 22 December 2024 the HYPE/USDC price on the platform had reached $35, up from $2 at launch—about ~1700% in 24 days.
What keeps users on Hyperliquid
User behaviour after the HYPE airdrop is notable. In most earlier cases tokens were sold off and users promptly left the dapp. Hyperliquid, by contrast, continues to set records in active users, total value locked (TVL) and trading volumes.
On 16 December 2024, daily net inflows of new users to the DEX peaked at 7,000 wallets; the cumulative number of new addresses has since reached about ~280,000.
The Hyperliquid L1 is built on an optimised version of the Tendermint consensus from Cosmos SDK, supporting spot and perpetuals with leverage up to 50x. The L1 charges no gas and enables high‑speed transactions. According to the team, throughput reaches 200,000 TPS with 0.2‑second finality. At this stage the blockchain can process up to 100,000 trading orders per second.
The HyperBFT consensus is inspired by the Hotstuff protocol, whose implementations power fast chains such as Aptos and Sui. The HYPE token pays for transaction processing in the native HyperEVM.
The user experience resembles centralised exchanges like Binance and outshines DEXs with perpetuals such as GMX. On Hyperliquid, all data are stored in the platform’s database, while trading records are written on-chain. For now the platform’s cross‑chain bridge supports only USDC transfers on Arbitrum. According to the developers, bridge security is provided by a set of validators.
Hyperliquid uses blockchain oracles such as Chainlink for timely price data. For perpetuals, the oracle updates the underlying asset’s price every three seconds; these feeds are then used to calculate funding rates. For spot trading, median prices are taken from several exchanges, including Binance, OKX, Bybit, Kraken, KuCoin, Gate.io and MEXC.
The platform offers copy trading through Vaults. Experienced traders can create their own vaults; users can deposit funds and automatically mirror a leader’s strategy, with the leader taking 10% of profits. HLP vaults supply liquidity and the liquidation fund, and allow users to become liquidity providers.
According to DeFi Llama, Hyperliquid currently ranks ninth among protocols by TVL, at about ~$2.43bn.
Conclusions
Hyperliquid Labs projects an open stance aligned with cypherpunk ideals, emphasising decentralisation and user primacy. The project has shown that an effective economic model can be built without venture capital. Importantly for the industry, this airdrop has rekindled hope for a reset of token‑distribution models.
It has been just over a month since the drop—too little time to validate the strategy’s resilience and the platform’s sustainable growth. Though the drop was smooth and well timed, it is hard to imagine a similar outcome in a weak market cycle. Users are holding unusually large sums, mirroring a fear‑and‑greed phase with a heavy tilt to the latter.
DEXs with perpetuals are relatively new, and for now Hyperliquid leads this segment by a wide margin. Not least, it is a project worth watching.