(a) Problem the project solves

Hyperliquid is a layer-one blockchain built to house an open financial system fully onchain. It removes the tradeoff between centralized-exchange performance and onchain transparency by running order-book trading, settlement, and general-purpose applications on a single high-performance chain.

(Source: About Hyperliquid, Hyperliquid 101)

(b) Operational priorities

Hyperliquid Labs leads core blockchain development and has funded the project entirely with its own capital, with no venture investors or external fundraising. Ongoing operations center on core protocol development by Labs, permissionless validator participation, builder expansion across HyperCore and HyperEVM, and programmatic routing of trading fees to HLP, the Assistance Fund, and market deployers. The Assistance Fund converts fees into open-market HYPE purchases that are treated as burned, and the Hyper Foundation supports ecosystem growth through its validator delegation program and grants.

(Source: Hyperliquid 101, Core Contributors, Fees, Delegation Program)

(c) High-level project overview

Hyperliquid is a layer-one blockchain secured by HyperBFT consensus and split into two execution surfaces. HyperCore contains fully onchain perpetual-futures and spot order books with onchain matching, liquidation, and settlement. HyperEVM exposes a general-purpose EVM environment secured by the same consensus and state as HyperCore.

(Source: About Hyperliquid, HyperEVM)

(d) Primary token functions

HYPE secures the network through delegated proof-of-stake staking to validators, serves as the native gas token on HyperEVM, provides tiered trading-fee discounts of 5% to 40% based on staked amount, and directs governance because stake-weighted validator votes decide delistings, network upgrades, and other protocol matters. HYPE is also the asset the Assistance Fund purchases and burns with protocol fee revenue.

(Source: Hyperliquid 101, Staking, HyperEVM)

(e) Control surface reliance

Governance operates today through stake-weighted validator voting, with HYPE stakers directing outcomes by delegating stake to validators whose positions they support. This mechanism has executed binding decisions including the September 14, 2025 assignment of the USDH stablecoin ticker to Native Markets, the December 24, 2025 vote recognizing Assistance Fund HYPE as permanently burned, and the June 2026 approval of the AQAv2 network upgrade with 69.08% of stake. Hyperliquid Improvement Proposals (HIPs) provide the public proposal surface, and the Genesis Event Terms state that governance transitions over time to the broader community of Hyperliquid L1 users.

(Source: HIPs, USDH Vote, Burn Vote Result, AQAv2 Result, Genesis Event Terms)

(a) IP ownership & control

The project does not have a DAO legal entity, and no DAO owns or controls project IP.

(Source: HIPs, Genesis Event Terms)

(b) Contract/admin powers

The project does not have a DAO. Onchain governance authority sits with the validator set, weighted by staked and delegated HYPE. Validator votes delist validator-operated perpetual markets, slash HIP-3 deployers and certain quote-asset deployments for malicious market operation, approve network upgrades at a two-thirds stake threshold, and decide protocol-level matters put to a vote. Executed decisions include the September 14, 2025 USDH ticker assignment to Native Markets, the December 24, 2025 recognition of Assistance Fund HYPE as burned with 85% of stake in favor, and the June 2026 AQAv2 network upgrade approved by 19 of 26 validators representing 69.08% of stake. Validator operation is permissionless and the active set is selected transparently by stake.

(Source: Delisting, HIP-3, Validator Docs, Burn Vote Result, AQAv2 Result)

(c) Locked-token rights (conditional)

(conditional) Staking HYPE grants three rights. Stakers delegate to validators and direct governance outcomes because validator voting power is proportional to delegated stake, and stakers can redelegate to validators whose declared positions they support during a vote. Stakers earn rewards paid from the future emissions reserve at a rate inversely proportional to the square root of total HYPE staked, approximately 2.37% per year at 400 million HYPE staked. Stakers receive tiered trading-fee discounts from 5% at more than 10 HYPE staked to 40% at more than 500,000 HYPE staked. Tokenholders do not vote directly on proposals and cannot decide matters outside what the validator set puts to a vote.

(Source: Staking, USDH Vote)

(d) Value accrual & holder rights

Tokenholders hold no formal legal claim on protocol revenue, dividends, or treasury assets. Value accrues to holders programmatically. Trading fees route to HLP, the Assistance Fund, and market deployers, and the Assistance Fund converts its fee share into open-market HYPE purchases sent to a system address with no private key. A December 24, 2025 validator vote formally recognized the roughly 37 million HYPE then held in the Assistance Fund as permanently burned and removed from circulating and total supply, and ongoing fee flows to the fund operate as permanent burns. Under the AQAv2 framework approved in June 2026, approximately 90% of cost-adjusted USDC reserve yield on the platform also flows to the Assistance Fund, with yield accrual beginning August 26, 2026 and the first payment scheduled for October 3, 2026.

(Source: Fees, Burn Vote Result, AQAv2 Passed)

(e) Dissolution authority

The project does not have a DAO entity to dissolve, and no public source discloses a dissolution or wind-up mechanism for the onchain governance system.

(Source: Genesis Event Terms, HIPs)

(a) Entity

The Hyper Foundation is a Cayman Islands foundation company. It describes itself as an independent foundation supporting the growth of the Hyperliquid ecosystem.

(Source: Terms of Service, Privacy Policy, HPC Launch Release)

(b) IP ownership & control

The Foundation's Terms of Service state that the Organization and its licensors own rights in the Foundation's Services and content, that user Feedback becomes the Organization's property, and that certain Hyperliquid L1 components are made publicly available under open-source or source-available licenses. The Foundation has not publicly disclosed ownership of the Hyperliquid L1 codebase, specific repositories, or trademarks, and has not publicly disclosed any subsidiary entities.

(Source: Terms of Service)

(c) Powers over DAO, treasury, protocol-controlled resources, and token administration

The Foundation holds no publicly disclosed unilateral powers over governance, protocol treasury actions, token administration, or reward parameters. Its documented governance role is proposal and participation. The Foundation runs a validator delegation program, operates validators and a non-validating node, proposed the December 2025 Assistance Fund burn vote that validators then decided, and in the September 2025 USDH ticker vote committed its validators to abstain and align with the majority of non-Foundation stake. Team-staked HYPE was also excluded from the USDH vote weighting.

(Source: Delegation Program, Burn Proposal, USDH Vote Mechanics)

(d) Powers over DevCo The Foundation has not publicly disclosed any formal power to direct Hyperliquid Labs or Hyperliquid Labs Pte. Ltd.

(Source: Terms of Service, Core Contributors)

(e) Contract/admin powers

The Foundation holds no publicly disclosed pause, upgrade, or governance-executor authority. The Genesis Event Terms state that under current plans and over time the Organization may lack the ability to effectuate upgrades and that upgrades are adopted by Hyperliquid L1 users. In practice, network upgrades require approval by validators representing a two-thirds stake threshold, as demonstrated by the June 2026 AQAv2 vote.

(Source: Genesis Event Terms, AQAv2 Result)

(f) Current economic arrangements and distribution policies

The Foundation received 6.0% of HYPE genesis supply as its budget allocation, which the Bitwise ETF filing describes as funding grant programs, educational initiatives, and strategic partnerships. The Foundation operates a validator delegation program using its holdings and contributed 1 million HYPE in February 2026 to seed the Hyperliquid Policy Center, an independent 501(c)(4) advocacy organization led by Jake Chervinsky. No recurring entitlement of protocol fees or treasury flows to the Foundation has been publicly disclosed.

(Source: Bitwise S-1/A, Delegation Program, HPC Announcement)

(a) Entity

Hyperliquid Labs Pte. Ltd. is a Singapore private limited company and the core contributor to the Hyperliquid L1. The Labs team relocated to Singapore in 2024 and operates with roughly a dozen people. Further corporate details beyond the entity name and its core-contributor role are not publicly disclosed.

(Source: Genesis Event Terms, Core Contributors, Colossus Profile)

(b) IP ownership & control

Hyperliquid Labs has not publicly disclosed its ownership or control of repositories, trademarks, brands, or subsidiary entities.

(Source: Core Contributors, Terms of Service)

(c) Powers over DAO, treasury, protocol-controlled resources, and token administration

Hyperliquid Labs holds no publicly disclosed formal powers over governance, treasury actions, or token administration. Team-staked HYPE was removed from the September 2025 USDH governance vote weighting, and the Genesis Event Terms state that governance transitions over time to the broader community of Hyperliquid L1 users.

(Source: USDH Vote Mechanics, Genesis Event Terms)

(d) Powers over Foundation

Hyperliquid Labs has not publicly disclosed any formal power to direct the Hyper Foundation.

(Source: Terms of Service, Genesis Event Terms)

(e) Contract/admin powers

Hyperliquid Labs holds no publicly disclosed pause, upgrade, or governance-executor authority. Network upgrades are adopted through validator votes at a two-thirds stake threshold.

(Source: Genesis Event Terms, AQAv2 Result)

(f) Current economic arrangements and distribution policies

Development has been fully self-funded with no venture capital or external fundraising. Current and future core contributors received a 23.8% allocation of genesis supply subject to lockups and vesting, and recipients of HYPE allocations from Hyperliquid Labs Pte. Ltd. were subject to a one-year lockup from the November 29, 2024 genesis. No mechanism directing ongoing protocol fees or treasury assets to Hyperliquid Labs has been publicly disclosed.

(Source: Hyperliquid 101, Bitwise S-1/A, Genesis Event Terms)

(a) Launch supply totals

HYPE launched on November 29, 2024 with a genesis supply of 1,000,000,000 tokens. The Genesis Distribution allocated 310,000,000 HYPE, equal to 31.0% of supply, fully unlocked at launch, of which approximately 274 million HYPE was claimed by recipients who signed the Genesis Event terms. Unclaimed genesis tokens were reallocated to the future emissions and community rewards bucket. The remaining 690,000,000 tokens across the other allocation categories were locked or reserved at launch.

(Source: Bitwise S-1/A, MPost Genesis Report, ChainCatcher Airdrop Data)

(b) Recipient categories & use of funds

• Recipient Category: Genesis distribution
  • Allocation: 31.0%, 310,000,000 HYPE
  • Publicly Described Use: Distribution to past users of the network through the genesis airdrop, allocated by points earned through platform activity.
• Recipient Category: Future emissions and community rewards
  • Allocation: 38.888%
  • Publicly Described Use: Reserved for future emissions, staking rewards, and community incentives. Staking rewards are paid from this reserve.
• Recipient Category: Current and future core contributors
  • Allocation: 23.8%
  • Publicly Described Use: Contributor compensation, subject to a one-year lockup and multi-year vesting.
• Recipient Category: Hyper Foundation budget
  • Allocation: 6.0%
  • Publicly Described Use: Foundation budget and treasury funding grant programs, educational initiatives, and strategic partnerships.
• Recipient Category: Community grants
  • Allocation: 0.3%
  • Publicly Described Use: Grants to ecosystem participants.
• Recipient Category: HIP-2 Hyperliquidity
  • Allocation: 0.012%
  • Publicly Described Use: Protocol-owned liquidity for the HIP-2 Hyperliquidity spot liquidity mechanism.

(Source: Bitwise S-1/A, 21Shares S-1, Tokenomist, Staking)

(c) Initial price per token (if applicable)

No fixed offering price, auction, or other price-discovery mechanism was used at TGE. The Genesis Distribution was a free airdrop with no token sale, and HYPE opened trading on Hyperliquid's spot order book at approximately $2 on November 29, 2024.

(Source: MPost Genesis Report, ChainCatcher Airdrop Data)

(d) Ticker / market symbol

The ticker is HYPE.

(Source: 21Shares S-1, Genesis Event Terms)

(e) Total supply & supply regime

Genesis total supply was 1,000,000,000 HYPE and no issuance above the genesis supply has occurred or been adopted. The supply regime is net deflationary in practice. Trading fees route continuously to the Assistance Fund, which converts them into open-market HYPE purchases sent to a system address with no private key, and a validator vote concluded on December 24, 2025 with 85% of stake in favor formally recognized the approximately 37 million HYPE then in the fund as permanently burned and removed from circulating and total supply, with ongoing fund inflows treated as permanent burns. Staking rewards are paid from the pre-allocated future emissions reserve inside the genesis supply rather than from new minting. As of September 1, 2026, CoinMarketCap reports total supply of approximately 952.05 million HYPE and circulating supply of approximately 251.7 million HYPE, while CoinGecko reports circulating supply of approximately 222.4 million HYPE under a stricter unlock-based methodology.

(Source: Burn Vote Result, Staking, CoinMarketCap, CoinGecko)

(f) Initial vesting / release schedules

The 310 million genesis-distribution tokens were fully unlocked at launch. Core-contributor tokens, 23.8% of supply, were locked for one year from the November 29, 2024 genesis and vest monthly thereafter, with most vesting completing between 2027 and 2028 and a portion extending beyond 2028. The next scheduled core-contributor unlock is 9.92 million HYPE, equal to 1.0% of total supply, on September 6, 2026. The Genesis Event Terms separately impose a one-year lockup on organization service providers and recipients of HYPE allocations from Hyperliquid Labs Pte. Ltd. The future emissions and community rewards reserve has no published release schedule and is drawn on for staking rewards.

(Source: MPost Genesis Report, Genesis Event Terms, Tokenomist, CoinGecko)

Planned but not yet executed airdrop. Not applicable. The project executed its TGE airdrop on November 29, 2024.

Executed airdrop. Applicable.

(a) Per-address source Address-level genesis distribution data is published through the ASXN Hyperliquid data dashboard, which records per-address genesis balances, claim amounts, and subsequent holdings for the distribution. Claims were executed onchain through the Genesis Event claim process, exposing per-address claim and amount data on the Hyperliquid L1.

(Source: Blockworks ASXN Coverage, PANews Airdrop Data)

(b) Covered user segments & allocation method The distribution covered users of the Hyperliquid platform across the closed alpha, testnet, and mainnet phases in 2023 and 2024, including points-program participants and referral participants. Allocation was proportional to points earned through platform activity. The distribution reached 94,000 addresses, with approximately 274 million of the 310 million allocated HYPE claimed, an average allocation of 2,915.66 HYPE per address, a median of 64.53 HYPE, and individual allocations ranging from 0.11 HYPE to 1,975,126.70 HYPE.

(Source: Points, PANews Airdrop Data, ChainCatcher Airdrop Data)

No airdrop planned. Not applicable. The project conducted its airdrop at TGE on November 29, 2024.

• Market Maker Name: None. The project has no market-maker agreements and allocated no HYPE to market makers.
  • Token Allocation Committed: None
  • Term Duration: Not applicable
  • Structure Name: Not applicable

The project has no market-maker agreements or deals affecting HYPE liquidity. Hyperliquid's market-making policy states there is no designated market maker program and no special rebates, fees, or latency advantages for any market maker, and no HYPE was loaned or allocated to market makers at genesis.

(Source: Market Making, MPost Genesis Report)

• Exchange Name: None. The project has no CEX or DEX listing agreements and paid no native-token listing fees.
  • Token Allocation Committed: None
  • Term Duration: Not applicable
  • Native Token Listing Fees: None

The project has no exchange-listing agreements or native-token listing-fee arrangements affecting HYPE liquidity. The genesis allocation schedule in the Bitwise and 21Shares ETF filings contains no exchange allocation, and no HYPE was allocated to centralized exchanges at genesis. HYPE launched directly on Hyperliquid's own onchain spot order book.

(Source: Bitwise S-1/A, 21Shares S-1, MPost Genesis Report)

• Series Name: None. No prior fundraising, OTC, or discounted market-maker token sales have occurred.
  • Date Of Sale: Not applicable
  • Number of tokens sold: None
  • Vesting Schedule: Not applicable

No prior fundraising, OTC, or discounted market-maker token sales have occurred. Development was fully self-funded by the founders with no venture capital or external capital, and no HYPE was allocated or sold to private investors.

(Source: Hyperliquid 101, Core Contributors, MPost Genesis Report)

(a) Date & component affected

Three market-manipulation incidents have imposed losses on the protocol-owned HLP vault. No smart-contract, consensus, or bridge exploit has compromised Hyperliquid protocol funds as of 2026-09-01.

(Source: Halborn JELLY Analysis, Halborn POPCAT Analysis, CoinDesk POPCAT Report)

• Date & Component Affected: 2025-03-12, HLP and the ETH perpetual market
  • Exploit Vector Summary: A trader opened a $271 million ETH long at 50x leverage on $6 million collateral, then withdrew margin to force liquidation while hedging short externally, exploiting liquidation mechanics rather than a code vulnerability and leaving HLP to absorb the position.
  • Quantified Impact: $4 million HLP loss.
  • Remediation / Response Taken: Maximum leverage was reduced to 40x on BTC and 25x on ETH, and a 20% additional margin ratio requirement was applied to margin withdrawals from open positions.
  • Current Status: Resolved.
• Date & Component Affected: 2025-03-26, HLP and the JELLY perpetual market
  • Exploit Vector Summary: An attacker opened offsetting long and short JELLY positions, pushed the JELLY spot price higher on external markets, and self-liquidated so HLP inherited a large short position exposed to mark-to-market losses.
  • Quantified Impact: HLP carried an unrealized loss reported at $12 million to $13.5 million at its peak.
  • Remediation / Response Taken: The validator set voted to delist the JELLY perpetual and settle positions at $0.0095 rather than the manipulated price near $0.50, and Hyperliquid made all users whole from Hyper Foundation funds apart from flagged attacker addresses. Onchain validator voting for delistings and stricter open-interest caps and leverage tiers followed the incident.
  • Current Status: Resolved. The market was closed, users were compensated, and HLP finished the incident without a net loss.
• Date & Component Affected: 2025-11-12, HLP and the POPCAT perpetual market
  • Exploit Vector Summary: An attacker distributed $3 million in USDC across 19 wallets, opened more than $26 million in leveraged POPCAT longs, placed and then cancelled a $20 million spoofed buy wall at $0.21, and triggered cascading liquidations that HLP absorbed as bad debt.
  • Quantified Impact: $4.9 million in HLP bad debt. The attacker burned approximately $3 million of its own capital.
  • Remediation / Response Taken: The team briefly paused POPCAT perpetuals, applied an emergency lock to an Arbitrum bridge route, and manually closed inherited positions to cap losses. Normal operations resumed within approximately one hour.
  • Current Status: Resolved. HLP absorbed the loss and platform solvency was unaffected.

(Source: Arrington Capital Analysis, CoinDesk JELLY Report, Halborn JELLY Analysis, Halborn POPCAT Analysis, CoinDesk POPCAT Report, Delisting)

(a) Regulatory, Legal & Tax Risks

The Genesis Event Terms warn that evolving legal and regulatory frameworks for blockchain technology could impair adoption of Hyperliquid and use of HYPE, and specifically disclose the risk that HYPE or HYPE transactions could be treated as securities or other regulated financial instruments in some jurisdictions. The Hyperliquid front end restricts access for users in the United States and other blocked jurisdictions, and Foundation-operated programs impose further restrictions. The Hyper Foundation delegation program excludes validator applicants from restricted jurisdictions including the U.S., Ontario, Cuba, Iran, Myanmar, North Korea, Syria, and certain Russian-occupied regions of Ukraine, and the Foundation non-validating node imposes sanctions and U.S. and Ontario restrictions plus eligibility thresholds tied to 10,000 staked HYPE and Tier 1 maker volume. The project has responded to U.S. regulatory uncertainty at the entity level. The Hyper Foundation contributed 1 million HYPE in February 2026 to launch the Hyperliquid Policy Center, an independent 501(c)(4) led by Jake Chervinsky that advocates for clear U.S. rules for decentralized finance, and U.S. users currently lack a legal path to trade derivatives on decentralized protocols pending CFTC rulemaking. The Genesis Event Terms disclose uncertainty around the tax treatment of digital assets and rewards and direct tokenholders to consult their own tax advisers, and tokenholders are responsible for understanding their own tax obligations.

(Source: Genesis Event Terms, Delegation Program, Foundation Node, HPC Announcement)

(b) Protocol, Technology & Security Risks

Hyperliquid's public risk disclosures identify bridge smart-contract risk, L1 consensus and downtime risk, market-liquidity risk, and oracle-manipulation risk, with open-interest caps and order-resting restrictions deployed as partial mitigants for oracle-related issues. The protocol's operational history demonstrates that its principal realized loss vector is market manipulation of thin-liquidity perpetual markets that forces the HLP vault to absorb bad debt, as in the March 2025 JELLY incident and the November 2025 POPCAT incident, rather than code exploits. Additional control-surface risks are disclosed in official docs. Validator-operated perps can be delisted by validator vote, HIP-3 deployers are responsible for market definition and operation and can be slashed by validator vote for malicious market operation, and the Foundation's non-validating node is not an authoritative source for time-sensitive activity. The Hyperliquid bridge contract has been audited by Zellic, and Hyperliquid runs a bug bounty covering mainnet node and API-server outages and logical errors that pays rewards in USDC and provides safe-harbor language for good-faith researchers. Staking currently has no automatic slashing, which leaves validator discipline dependent on stake-weighted voting and operational response rather than an automated slashing regime. Audits and the bug bounty do not cover economic-design failures of the kind realized in the HLP manipulation incidents.

(Source: Risks, Delisting, HIP-3, Foundation Node, Audits, Bug Bounty Program, Staking)

(c) Token Economics, Unlocks & Incentive Risks

HYPE's economics depend on continued trading volume and fee generation. Trading fees route to HLP, the Assistance Fund, and market deployers, and the Assistance Fund converts the substantial majority of protocol fees into open-market HYPE purchases that are permanently burned, a mechanism that had repurchased approximately 45 million HYPE for roughly $1.1 billion cumulatively by August 2026. The AQAv2 framework approved by validators in June 2026 adds a second buyback input by directing approximately 90% of cost-adjusted USDC reserve yield on the platform, estimated at $135 million to $160 million annually on roughly $5 billion in reserves, to the Assistance Fund beginning with an August 26, 2026 accrual start and a first payment on October 3, 2026. A sustained decline in trading volume would reduce both fee-funded buybacks and HLP returns, and a decline in platform USDC balances or interest rates would reduce AQAv2 flows. Staking rewards are paid from the future emissions reserve at a rate inversely proportional to the square root of total HYPE staked, approximately 2.37% per year at 400 million staked, so staking yield declines as participation grows and depends on the finite reserve. Supply-side risk centers on the core-contributor allocation of 23.8% of genesis supply, which exited its one-year lockup on November 29, 2025 and vests monthly with most vesting completing between 2027 and 2028, including a 9.92 million HYPE tranche on September 6, 2026. The December 24, 2025 validator vote recognizing Assistance Fund HYPE as permanently burned removed approximately 37 million tokens from circulating and total supply and committed validators to never authorize a protocol upgrade accessing that address, making the burn mechanics a load-bearing assumption for long-run supply.

(Source: Fees, AQAv2 Coverage, AQAv2 Passed, Staking, Tokenomist, Burn Vote Result)