Hyperliquid's future hinges on developer adoption, warns VanEck

Since its launch in 2024, the blockchain perpetual income exchange has captured 70% of the market, surpassing established competitors such as GMX and dYdX. Handling approximately $260 million in daily transactions, Hyperliquid's rapid growth has positioned it as a leading player among decentralized exchanges (DEXs). DEX monthly trading volumes hit a record high of $433 billion in December 2024, reflecting the trend of the sector.

Despite these achievements, concerns are mounting about Hyperliquid's long-term sustainability. VanEck pointed out in a recent report that the blockchain's $25 billion market valuation, driven by the meteoric rise of the HYPE token, could be at risk without stronger developer engagement. The report emphasized that the Hyperliquid smart contract platform has yet to cultivate a vibrant ecosystem of developers, a critical factor for sustaining growth and meeting community expectations.

Diversification and strategic challenges

Hyperliquid's airdrop, announced as the most successful token generation event of 2024, has brought HYPE into the scene. The token saw gains of more than 500% within a month, peaking at $34 before settling around $25 in early January 2025. However, VanEck warned that a broader use case is needed to support this trend hold beyond its ever-successful exchange.

Hyperliquid has seen significant growth in market share over the past year. Source: VanEck

The blockchain's intentions extend beyond its primary exchange. By introducing a smart contract platform compatible with the Ethereum Virtual Machine (EVM) in 2025, Hyperliquid aims to diversify its resource and attract decentralized application (dApp) developers . Early testnet activity has shown encouraging signs, with at least six native dApps already operational and gathering thousands of users. This development marks a critical step in positioning Hyperliquid as a general purpose blockchain rather than a single product platform.

Challenges in a Competitive Market

Hyperliquid's rise has been rapid, but maintaining its competitive edge will be challenging. According to VanEck, DEXs often struggle with a lack of long-term competitive moats due to their reliance on open source technology, which makes features easy to replicate. Without unique innovations or a loyal developer community, it could be difficult to dominate the market.

Post-airdrop performance of DEX token. Source: VanEck

Another critical aspect is network decentralization. The selection process of testers for Hyperliquid is taken by the governing body called the Hyper Foundation, which has been questioned many times. Therefore, the foundation clarified that positions of confirmation are given according to merit, thus reestablishing its policy of transparency and fairness. This would help gain the much-needed trust of the community – a key factor in any blockchain ecosystem.

Will Hyperliquid live up to its lofty expectations?

The next 12 months will be very important for Hyperliquid. The success of its EVM-compatible platform will determine whether it can evolve into a multifaceted blockchain capable of supporting diverse applications. Expanding its developer base, fostering innovation, and addressing community concerns will be critical to maintaining its impressive market valuation and long-term relevance.

Hyperliquid (HYPE) stock price history. Source: Brave New Medal

Hyperliquid's rapid ascent is symbolic of the broader trends within the crypto industry, where projects must balance innovation with practical execution. As the competition in the DeFi space heats up, only those who combine technological advances with strong community support are likely to succeed.

For Hyperliquid, the stakes are high, and the future depends on its ability to adapt and deliver its ambitious vision. For crypto investors wondering which crypto to buy right now, there are many alt coin options, such as XRP, and Dogecoin, however, HYPE is a new contender and deserves big gains in 2025.