Hyperliquid's gross protocol revenue has fallen sharply even as trading activity on the platform keeps setting records, according to CoinDesk. Revenue peaked at roughly $357 million in the third quarter of 2025 and has slid every quarter since, down to about $202 million in the second quarter of 2026 — a 43% decline — even as open interest hit a record $11 billion on July 13 and 30-day perpetuals volume ran near $178 billion.
The disconnect comes down to where the fees are actually going. Under Hyperliquid's HIP-3 program, outside builders who stake 500,000 HYPE — worth roughly $28 million at current prices — can deploy their own perpetual markets on the exchange and keep up to half of the trading fees those markets generate. Builder-deployed markets have grown from about 2% of total volume at the start of 2026 to roughly half of it now, meaning a growing share of Hyperliquid's trading activity no longer flows fully back to the protocol.
Why Hyperliquid Built a Revenue-Sharing Model
HIP-3 went live on October 13, 2025, and was explicitly designed to undercut the listing economics of centralized exchanges. Base creator Jesse Pollak has publicly criticized exchanges that charge "2–9% of a token supply" just to get listed, while developer Jeffy Yu has called the practice "disgusting and unethical." By letting anyone with enough staked HYPE spin up a market permissionlessly, Hyperliquid removed that gatekeeping — but the tradeoff is that it also gave away a meaningful cut of its own fee revenue in the process.
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One Firm Dominates the New Markets
Real-world-asset contracts have become the biggest beneficiary of the shift, hitting a record $3.6 billion in open interest this month and overtaking bitcoin as Hyperliquid's largest market category; in the week of July 13-19 alone, RWA perps accounted for $25 billion of volume, or 52% of the weekly total. But that growth is concentrated: trading firm Trade.xyz accounts for more than 90% of HIP-3 open interest. The risk of that concentration surfaced on July 22, when a thin pre-market trade on a Korean stock knocked Hyperliquid's SK Hynix contract down 19% and triggered a wave of liquidations that Trade.xyz ultimately reimbursed.
Cost Structure Is Shifting Too
The cost of generating that revenue has climbed alongside it. Cost of revenue was under 6% of gross revenue in the second quarter of 2025; by the same quarter this year it had reached 18%, with $16 million of that tied directly to pass-through builder-code fees. Hyperliquid still routes about 97% of trading fees into its Assistance Fund, which uses the proceeds to buy back HYPE, but even those purchases have shrunk — from roughly $290 million in the third quarter of 2025 to about $149 million in the second quarter of 2026, even as the fund has retired some 44.5 million HYPE in total.
HYPE itself trades around $55, down 28% from its June 16 peak of about $77, leaving the token valued at roughly 16 times circulating-supply earnings and closer to 70 times on a fully diluted basis. Singapore's Monetary Authority added the platform to its investor alert list in late June, and spot HYPE ETFs logged their first weekly outflow — about $7 million — in the week ending July 17, adding regulatory and sentiment headwinds to a revenue picture that was already softening.
