Hyperliquid Erodes the Contract Market of Centralized Exchanges

With trillion-dollar trading volume, 60% perpetual contract market share, and an average of $400 million in daily on-chain

Author: Frank, PANews

Trillion-dollar trading volume, 60% perpetual contract market share, and an average of $400 million in daily on-chain settlements - Hyperliquid (HYPER:CRYPTOCURRENCY), a decentralized exchange that has been established for less than two years, is eroding the contract market of centralized exchanges with a series of disruptive data.

Whales are playing a "life-and-death gamble" with 50x leverage. Institutional funds are frantically buying orders with low fees, while retail investors continue to wait and see due to the lack of token categories. While Binance (BNB:CRYPTO) and Coinbase (NASDAQ:COIN) still dominate the industry, Hyperliquid has opened up a new battlefield for DEX counterattack with its extreme efficiency and risk coexistence model. However, the "slow" mechanism of the Dutch auction and the dilemma of the governance token HYPE being cut in half also make this subversion full of variables.

Trading volume exceeds one trillion, Hyperliquid becomes the 'dark horse' of contracts

Since the airdrop detonated the market in 2024, Hyperliquid's contract trading volume has increased exponentially, completely breaking the industry curse of "decline after airdrop". On the contrary, in the recent market fluctuations, Hyperliquid has already established its position as a leading exchange.

Data from March 5 showed that Hyperliquid's total trading volume exceeded $1 trillion for the first time. According to Coinglass data, Hyperliquid's contract trading volume on that day was about $8.5 billion, and Hyperliquid's contract trading volume ranked sixth among all exchanges, only lower than five centralized exchanges including Binance, OKX, Bitget, Bybit, and Gate.io. Binance's contract trading volume was about $91.7 billion. Although the gap is still obvious, Hyperliquid seems to have become a new force that Binance cannot underestimate.

According to data from hypurrscan, Hyperliquid's fee income is annualized to $746 million. In comparison, Coinbase's full-year trading revenue in 2024 is $4 billion.

Among decentralized exchanges, Hyperliquid has become the dominant player in the perpetual contract market. According to data provided by analyst WarDaddyCapital on February 8, Hyperliquid's market share in perpetual contracts has reached 60.5%, while on November 1, 2024, its market share was only 33.2%, and in March 2023, its market share was less than 2%. This growth rate is unique among decentralized exchanges.

Trump's new casino under the giant whale deal

The rise of Hyperliquid is inseparable from institutions and high-net-worth traders. Especially recently, the frequent opening of orders by whales has triggered market discussions. Hyperliquid seems to have become a public place for whales to open orders, including cases of smart money that takes unconventional actions and shows off its strength.

On March 2, before Trump announced that five crypto assets including BTC, ETH, SOL, ADA, and XRP would be added to the strategic reserve of crypto assets, a whale held $6 million in assets and used 50 times leverage to go long on ETH and BTC. The opening price of ETH was $2,197 and the liquidation price was about $2,149. After the order was opened, the price of ETH fell to as low as $2,171, and it almost went bankrupt. Fortunately, a few minutes later, the market surged with the help of Trump's favorable news, and the user eventually made a profit of more than $6.8 million in a single day. Many people on social media believe that this extreme operation may have been done by insiders around Trump. However, this statement was later denied by Conor Grogan, director of Coinbase, who found that the funds came from phishing and the user was a user of the crypto gambling platform Roobet. This risky operation seems to be just a gambler's exciting way to play.

In addition to this extreme speculation, some whales have also gained huge profits from long-term holdings. According to on-chain analyst @ai_9684xtpa, a whale opened an Ethereum short position with 50x leverage in January, with an opening price of $3,169 and a maximum floating profit of over $78 million. As of March 5, the order is still held, and the current floating profit is still $69 million. The user has also become the user with the most profit on Hyperliquid. According to information provided by social media users, the address belongs to the new stablecoin protocol Resolv, which may be an order from its hedge fund.

In addition, it is not uncommon to hear news about whales spending millions of dollars to open orders and build positions on Hyperliquid. From the data, the average transaction volume