Thread by @defi_monk

1) A Valuation of Hyperliquid
Key takeaways from my latest Messari report

My updated valuation outlook on the $HYPE token places it at a $13B FDV, with the potential to rerate higher than $30B in the right market conditions.

Let's dive in:

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2) The end of incentives have done little to stop Hyperliquid's momentum.

We saw ATHs in market share in October, and OI has also hit an ATH at over $1.5B.

3) With TGE we'll also get the launch of the HyperEVM, with over 35+ teams planning to participate in the new eco.

This moves Hyperliquid closer to a general purpose L1 and away from an appchain.

Here's a market map I made:

4) The new Hyperliquid deserves a new valuation framework.

Typically a killer-app and its L1 network are separate entities. App fees accrue to the app's token, and L1 fees accrue to the network validators.

Hyperliquid consolidates those revenue streams.

5) Thus, Hyperliquid owns both crypto's leading perp DEX and the L1 upon which it is built.

We opt for a sum-of-the-parts valuation method to better reflect the protocol's vertical integration.

Let's start with the perp DEX.

6) Our full assumptions are reserved for Messari's enterprise clients, but I'll talk through a key driver below.

Our top-line views on the derivs sector align fairly closely with those from @multicoincap ($DRIFT) and @asxn_r.

Where I differ from consensus is on HL's share.

7) I believe the perp DEX market is a winner-take-most market. This is because:

1. Any perp DEX can list any perp, removing chain fragmentation.

2. DEXs are permissionless to use unlike CEXs.

3. There is a network effect flywheel when it comes to order flow and liquidity.

8) I think Hyperliquid's dominance only grows. In our base case we think Hyperliquid can take close to half of the onchain market.

This results in $551M in revenues in 2027. Currently trading fees accrue to the community, and thus, we report this as real revenue.

9) Using a DeFi standard 15x multiple we arrive at a valuation of $8.3B for the perp DEX as a standalone business.

Again you can see our full model if you are an enterprise customer.

Now let's move on to the L1:

10) L1s are typically valued at a premium over DeFi apps. Hyperliquid's valuation can continuously rerate higher as it fleshes out activity on its network.

Note the widening opportunity here:

11) Hyperliquid is ALREADY the 11th largest chain by TVL.

Smaller players like Sei and Injective are valued at $5B and $3B respectively. Similar sized, parallelized performant networks like Sui and Aptos are valued at $30B and $12B.

12) We use a conservative $5B L1 premium to Hyperliquid's valuation given HyperEVM is yet to launch.

Realistically, this could move towards $10B or higher if we're pricing the L1 at current market rates.

So for our base case:

13) Hyperliquid's perp DEX is worth $8.3B and the underlying L1 is worth $5B. Base case FDV is $13.3B.

Bear: ~$3B | Bull: ~$34B

I cannot stress enough how we have yet to see a leading crypto app vertically integrated with one of the most performant early stage alt-L1s.

To check out the full report if you are an enterprise client (not pro this time sorry), read it here.

You can see our full bear and bull cases there as well as access the model.

messari.io/report/a-valua…