Hyperliquid Token Unlock Raises $314 Million Risk Amid Transparency Concerns

Hyperliquid finds itself at a critical juncture as it prepares for a $314 million lock release scheduled for Saturday. This event has heightened worries about transparency, market stability, and the long-term management of its tokenomics.

Key Takeaways

Hyperliquid is preparing for a $314 million token unlock, triggering concerns about market transparency and tokenomics management.
The unlock will release nearly 10 million HYPE tokens at once, leading to speculation over sell pressure.
The community is divided on how much transparency the Hyperliquid team needs to provide regarding the distribution of unlocked tokens.
HYPE has faced significant declines in recent weeks, struggling ahead of the unlock with major resistance levels in play.
Despite challenges, Hyperliquid remains a dominant player in decentralized perpetuals trading, with strong trading volumes.

Hyperliquid Token Unlock

According to data from Tokenomist, Hyperliquid, a decentralized exchange focused on perpetuals, will unlock 9.92 million HYPE tokens in one go, which represents 2.66% of the total token supply.

The entire allocation will become available simultaneously, leading to questions about the potential for sell pressure and the team's plans for the newly unlocked tokens.

Community Concerns Over Transparency and Potential Market Pressure

The upcoming unlock has spurred significant conversation within the Hyperliquid community. Earlier this week, a user on X, named Andy, wrote an open letter urging the team to communicate with the community before the unlock occurs.

He noted that token holders are already feeling anxious due to a broader market downturn and a month-long decline in HYPE, down more than 23% over the last month with current trading around $31.

“The team and airdrop recipients finally able to sell is going to ruffle feathers until you address the community head-on,” Andy expressed, highlighting that many traders still bear emotional scars from past collapses following token unlock events.

Arthur Hayes, co-founder of BitMEX, also shared his thoughts, warning that even if insiders promise not to sell, the market cannot simply rely on verbal assurances. He pointed out that Hyperliquid’s price-to-fully diluted valuation ratio has been declining since July, indicating that the market is already factoring in dilution risks.

According to Hayes, only substantial revenue growth can counteract the uncertainty associated with the increased supply.

Despite these concerns, opinions among community members vary. Some believe the team is not obligated to disclose their plans for the newly unlocked tokens, arguing that just announcing the unlock schedule and allocation amount is sufficient. Others viewed Andy's open letter as "desperation," asserting that the contributors have "earned" their share and that the platform's performance speaks for itself.

Hyperliquid remains one of the leading venues in the decentralized perpetuals market, and traders have noted its consistent deep liquidity throughout the year.

HYPE Struggles with Weak Momentum as Unlock Approaches

Market data indicates that HYPE has had difficulty maintaining bullish momentum leading up to the unlock. The token has dropped 14.2% over the past week and over 22% in the last two weeks.

Currently, HYPE is trading nearly 46% below its all-time high of $59.30, and technical indicators suggest continued selling pressure.

On Thursday, HYPE tried to break above its 20-day Exponential Moving Average (EMA) but faced selling resistance, slipping below the $35.50 support level on Friday.

Analysts warn that closing below this level could trigger a wider downtrend to $28 and potentially $24.

Chart analysis shows that HYPE is still below key resistance zones, with supply clusters between $36 and $42 serving as a barrier for recovery attempts.

Indicators like the 34 RSI and negative Chaikin Money Flow reflect weakening momentum and ongoing liquidity outflows.

Market analysts suggest that buyers must quickly reclaim the $35.50 area to avoid further decline, while stronger upward moves would need to surpass the 50-day Simple Moving Average (SMA) near $41.

The token unlock coincides with heightened perpetual futures activity in the wider market, despite price declines in major assets. According to data from DefiLlama, daily perpetual trading volumes across decentralized exchanges range between $28 billion and $60 billion.

Over the past 30 days, the four largest platforms—Lighter, Aster, Hyperliquid, and EdgeX—processed more than $1 trillion in total trading volume.

Lighter led the month with $300 billion, followed by Aster with $289 billion, Hyperliquid at $259 billion, and EdgeX at $177 billion.

Additionally, Hyperliquid leads the sector in open interest, boasting over $6.3 billion in active positions, indicating continued reliance on the platform despite downward pressure on its token.