Hyperliquid’s HYPE token surges 60% after billion-dollar airdrop

Decentralized finance (DeFi) protocol Hyperliquid has entered the ranks of the largest airdrops in history with its genesis event on Nov. 29, when it distributed 310 million HYPE tokens to its community.

At the launch, the HYPE token was valued at $3.90, placing the total distribution at $1.2 billion, according to data from CoinGecko. The token’s value jumped by 63% within approximately 12 hours, trading at $6.16 at the time of this report. Its market capitalization currently nears the $2 billion mark. 

Hyperliquid is a layer-1 blockchain based on a proof-of-stake consensus mechanism, designed to process up to 200,000 transactions per second. The HYPE token is central to the ecosystem, serving both as the staking asset for consensus and as the gas token for Hyperliquid’s Ethereum Virtual Machine compatible layer, HyperEVM. 

According to the protocol, it has distributed 31% of its $1 billion HYPE tokens on the genesis event, with 38.8% of the remaining supply allocated for future emissions and community rewards, 6% to the Hyper Foundation treasury and 0.3% to grants. 

Core contributors will receive 23.8% of the total supply under a 1-year lock period, with vesting schedules ending after 2028. There are no allocations for private investors, centralized exchanges, or market makers, said Hyperliquid in a statement. 

Related: Scroll refutes allegations of ‘predatory’ airdrop

The largest airdrops

Hyperliquid’s airdrop ranks as one of the largest in DeFi history so far. In September 2020, Uniswap’s airdrop distributed 400 Uniswap (UNI) tokens to over 250,000 addresses, with each token initially valued at about $3.40 — making the distribution worth approximately $1,300 per recipient. While many users quickly cashed out their tokens, holders witnessed the value of UNI skyrocket to over $42 just a few months later during the DeFi summer of 2021. 

Another notable airdrop was carried out by the Arbitrum protocol in 2023, distributing its native Arbitrum (ARB) token to over 625,000 eligible wallets for a market value of around $1.30 each, totaling $812,500. 

An airdrop is a free distribution of new or existing tokens of a blockchain-based protocol. It can serve multiple purposes, from incentives to early adopters to the promotion of new cryptocurrencies. 

According to CoinGecko, crypto tokens worth over $26.6 billion have been distributed to users over the past few years. The analysis considers token prices at all-time highs rather than at distribution.

Related: What is a crypto airdrop, and how does it work?