Paradigm backs Hyperliquid through large-scale staking initiative
Hyperliquid focuses on revitalizing its native token, HYPE, which struggles below $40. Paradigm, a major stakeholder holding about 1.91% of HYPE’s supply, has revealed its backing by staking a large percentage of tokens, supporting Hyperliquid’s staking ecosystem. Recent staking actions have reduced supply pressure and increased demand metrics for HYPE. Additionally, Paradigm’s staking move aligns with its part in the Sonnet Biotherapeutics merger. Despite HYPE's current trading at $39.34 and weaker open interest of $1.36B, Hyperliquid has injected $80M for buybacks, stabilizing the token. HYPE aims for a potential recovery above $40 and anticipates future growth towards $100, driven by its use in Hyperliquid’s ecosystem and potential third-party projects.
Rebuilding HYPE's Position
Hyperliquid aims to rebuild the position of its HYPE native token, which has sunk below $40. The most recent support comes from Paradigm’s staking deposit, revealing the fund’s significant reserves. Paradigm, one of the biggest holders of HYPE, recently deposited a large percentage of its holdings for staking. HYPE relies on a dedication to holding, striving to form the foundation of the Hyperliquid staking economy.
SWPE Metric and On-Chain Data Insights
As a result of the latest HYPE move, the SWPE metric (demand against the free supply) reached a new low, suggesting solid support. The supply-weighted P/E ratio also dropped to a new low, indicating robust demand for HYPE within the ecosystem. On-chain data showed that Paradigm was the single largest holder of HYPE, holding around 1.91% of the total token supply.
Transparency in Hyperliquid's Funding
Until recently, Hyperliquid’s funding remained non-transparent, as the perpetual DEX disclosed only a single undisclosed round of financing. Unlike other VC-backed projects, awareness was limited about its backers and their intentions regarding the token. Despite this, HYPE continued to grow post-airdrop, avoiding immediate sell-offs. Paradigm emerged as a key backer, holding a notable percentage of tokens.
Paradigm's Token Movements and Sonnet Merger
Paradigm shifted its HYPE stake into Sonnet’s treasury, locking $581M in staking and delegating tokens to secure the network. Paradigm maintained 1.4M HYPE in its spot balance, while the majority were moved to the Anchorage validator. These token transfers are tied to the Sonnet Biotherapeutics merger and the creation of a treasury company. This move links the locked tokens to potential passive income while reducing selling pressure. Following the merger news, Sonnet shares traded at $4.60, mid-range for the past six months.
HYPE's Role in the Ecosystem
Despite the decline in other DAT companies, Sonnet benefited from Hyperliquid’s success as a leading perpetual DEX. The growing Hyperliquid ecosystem for side projects supports the importance of HYPE. The token plays a critical role in securing the HyperEVM network, making Sonnet indirectly supported by HYPE’s performance.
HYPE's Market and Buyback Efforts
Currently, HYPE trades just below $40, attempting to bounce from its recent lows, recently recovering to $39.34. Hyperliquid is still rebuilding its activity post the October 11 deleveraging event, with HYPE's open interest at $1.36B (over 70% of traders are going long). Approximately 67% of whales on Hyperliquid are long on HYPE, but the largest position remains a short worth $61M. In the last month, Hyperliquid re-injected $80M for buybacks, enabling the token to stabilize quickly while not achieving new all-time highs.
Future Potential for HYPE
HYPE is anticipated to break out to $100, driven by ecosystem demand. The token may also be required to create a third-party perpetual DEX with distinct trading and fee conditions. This potential use case reflects ongoing demand and strategic importance within Hyperliquid’s ambitious roadmap.