Author: Carlos & Toma

Translated by: Shenchao TechFlow

Introduction by Shenchao: Hyperliquid's TradeXYZ captures the traditional financial perpetual market with a transaction fee of only 1% (0.9bp vs 9bp), with the trading volume of real-world assets (RWA) surpassing 50% within two weeks. This strategy of "occupying territory before charging" has proven successful: priority fee income has exceeded 80% of HIP-3 direct trading fees, and the platform holds $5.7 billion USDC to earn interest. In the two weeks before the listing of China’s chip stock CXMT, TradeXYZ accurately predicted the opening price within a 2.6% error range, whereas traditional institutions predicted a price range of 45-75 yuan (66% error). This proves that the native infrastructure of cryptocurrency is not only capable of trading coins but also effective in pricing real assets.

On Monday, global risk assets collectively plummeted, with Bitcoin closing down 2.4%, while the stock market, gold, and oil simultaneously fell—such a synchronous decline is rare.

Image: On July 27, global risk assets fell simultaneously, comparison of the daily movement of BTC, gold, Nasdaq 100 and S&P 500

The backdrop for the intensified selling pressure is this Wednesday's Federal Reserve FOMC meeting. Following inflation data that came in below expectations two weeks ago, the rate hike probability on CME FedWatch plummeted temporarily but has now climbed back to 40%. After Monday's close, Bloomberg reported that Citadel Securities believes "an unexpected rate hike" is a real possibility, prompting the subsequent acceleration of selling.

Image: CME FedWatch shows the probability of a July rate hike rebounding from 16.0% a week ago to 36.3%

By sector, only three indices rose on Monday: 2025 Crypto Stocks (+1.6%), Solana Eco Index (+1.5%), and Launchpad Index (+0.4%).

Image: Daily return rankings by sector, only 2025 Crypto Stocks, Solana Eco and Launchpad Indices rose

The perpetual contract index (-6.1%) experienced the largest drop, mainly due to a sharp decline in HYPE. Although Hyperliquid's exchange metrics (which Carlos will analyze in detail below) remain strong, HYPE is facing the dual pressures of large-scale unstaking requests and regulatory concerns.

Image: HYPE's pending unstaking volume has surged, with an estimated 7.4 million HYPE unlocking before next weekend

An estimated 7.4 million HYPE (about $400 million) is expected to complete unlocking before next weekend, including portions from funds such as Multicoin Capital. Though Multicoin clarified that these tokens will not be sold and are only for routine wallet management, HYPE still faced selling pressure.

The RWA Flywheel of Hyperliquid is in Motion

TradeXYZ successfully transitioned from pre-IPO price discovery to the live public market this week.

On July 14, TradeXYZ initiated the pre-IPO market for China's chipmaker SMIC (CXMT) just before its listing on the Shanghai STAR Market. For nearly two weeks before the public trading of the stock, Hyperliquid users could gain exposure and continuously price its expected market value.

At the opening, the implied contract price was about 48.20 yuan, only 2.6% lower than CXMT's opening price of 49.50 yuan. The publicly available pre-listing forecast range was 45-75 yuan, which strongly demonstrated the effectiveness of the perpetual contract as a real-time price discovery tool before the IPO.

More importantly, CXMT once again shows that RWA is becoming central to Hyperliquid. For the second consecutive week, RWA has become the leading category by futures trading volume, accounting for over 50% of weekly trading volume.

Image: Composition of Hyperliquid perpetual contract trading volume, with RWA surpassing 50% for two consecutive weeks

TradeXYZ also set a record of $3.76 billion in open contracts on Sunday, bringing Hyperliquid's total open contracts to $11.42 billion.

Image: Hyperliquid's total open contracts for perpetual contracts reached a new high of $11.42 billion, with significant contribution from Trade[XYZ]

It is worth noting that TradeXYZ's market remains in growth mode, with protocol fees reduced by 90%. The base transaction fee is about 0.9 basis points, while the standard rate is 9 basis points. I believe this will not change in the short term. Traditional financial perpetual contracts are still in their early stages, and liquidity will attract liquidity; maintaining the platform's leading position may be more valuable than maximizing recent fee rates. Even if the growth mode concludes, the full standard rate may still be unreasonable for the highly competitive stock and index markets.

Nonetheless, discounted trading fees do not mean that the monetization ability of this activity is weak. The HIP-3 market also generates revenue through priority fees, as traders and market makers compete for low latency and priority packaging. On certain days, priority fee income has already exceeded 80% of HIP-3 direct trading fee income. Thus, Hyperliquid can monetize the growing RWA activity through the trading order stack while maintaining low surface transaction fees.

Image: Hyperliquid's daily priority fee income has repeatedly exceeded HIP-3 direct trading fee income

The broader conclusion is that Hyperliquid is diversifying how the content and protocol that users trade generate income. Native crypto perpetual contracts remain the core business, but HIP-3 has expanded trading volume to RWA assets, and priority fees will monetize execution and sorting competition, while the approximately $5.7 billion USDC held within the ecosystem creates another significant source of revenue through yield sharing.

Image: Changes in Hyperliquid's ecosystem stablecoin (USDC) supply, with rapid growth in HyperEVM fund size

CXMT is the latest evidence of this strategy's effectiveness: Hyperliquid is evolving from a crypto perpetual contract exchange into infrastructure for broader financial markets. Shaunda will release an in-depth report on the increasing importance of priority fees in the coming days, so stay tuned.

HPC and Multicoin Support CFTC's Prediction Market Framework

The Hyperliquid Policy Center and Multicoin Capital submitted a comment letter supporting the prediction market framework proposed by the CFTC, arguing that event contracts fall under the exclusive federal jurisdiction of the commission and should not be dispersed among state gambling regimes. The letter emphasized that Hyperliquid's HIP-4 outcome contracts are fully collateralized on-chain tools that can support prediction markets without leverage or liquidation. It suggested two amendments to the final rule. First, the CFTC should formally adopt a settlement-based definition to determine when contracts "involve" gambling or other restricted activities and provide more examples. Second, regulators should publish their reasoning after each contract review, including when allowing markets to continue, so that builders can rely on a consistent regulatory precedent system.