Hyperliquid has directed roughly 97% to 99% of its trading fees into HYPE token buybacks and burns through its Assistance Fund, pushing the reported value of repurchased and retired tokens above $4 billion. The mechanism has become closely tied to the platformâs economics: trading activity generates fees, fees fund HYPE purchases, and the acquired tokens are removed from circulation.
That model is operating at a scale unmatched by other perpetual decentralized exchanges, according to recent market tracking. Perpetual DEXs generated about $125 million in fees across 38 venues during the past 30 days, with Hyperliquid accounting for $84.55 million, or 67.6% of the total. The five largest venues collectively represented 85.6% of fees, underscoring how concentrated revenue has become among a small group of derivatives platforms.
Hyperliquidâs reported $84.55 million monthly fee intake places substantial trading costs at the center of the tokenâs supply-reduction program. The arrangement gives HYPE holders exposure to a system in which platform revenue is routinely recycled into market purchases, though the trading losses and fees incurred by active users remain separate from the economics of holding the token.
Retail trading losses outpaced small deposits
A wallet-tracking analysis covering roughly 400,000 retail wallets that reached Hyperliquid through six consumer applications estimated cumulative losses of about $280 million. The apps included Phantom, MetaMask, Rabby, Trust Wallet, Invo and fomo.
About $126 million of those losses occurred after November 10, 2025, as access through third-party applications expanded rapidly. The rest was attributed to trading before November 2025 or activity that did not pass through those consumer-app routes.
Fees represented more than half of the retail losses in the dataset, including in the more recent $126 million group. Reported combined costs for a $100 order ranged from about 6.5 cents to 14.5 cents, with a Builder Fee added on top of base trading fees.
Builder Fees are paid to applications or interfaces that route orders to Hyperliquid. They can create an additional cost layer for users who access the exchange through wallets and trading front ends rather than its native interface. On a single trade, the charge may appear limited. Repeated short-term trading can turn that friction into a substantial drag, particularly for users entering and exiting leveraged positions frequently.
Typical deposits among users of five of the tracked apps ranged from about $30 to $60 per wallet. Rabby users were described as holding larger balances and showing a higher likelihood of profitability than users arriving through the other applications.
The same analysis found weak retention among third-party-channel traders. New-user retention after three months was estimated at roughly one in seven, while around 86% of users exited after recording losses. Invo provided an especially sharp example of high turnover: its users reportedly deposited about $12.4 million while producing approximately $5.8 billion in trading volume.
BTC was identified as the market associated with the largest losses in the tracking data. Higher trading friction was also reported in HIP-3 markets and smaller-token USD pairs, where costs and liquidity conditions can weigh more heavily on frequent traders.
A fee-dragged market structure
Perpetual contracts are often described as a zero-sum market before costs: one sideâs trading gain corresponds to another sideâs loss. Fees, funding payments and liquidation penalties make the aggregate outcome negative for traders as a group, while the venue and order-routing partners collect revenue regardless of whether individual positions win or lose.
Hyperliquidâs buyback structure links a large share of that revenue to HYPE supply reduction. Yet reported ownership data suggests that most HYPE holders may not directly participate in the derivatives activity producing those fees. About 86% of addresses holding HYPE were reported to have never traded perpetual contracts.
That split places token holders and active derivatives traders in different positions within the same ecosystem. Holders may benefit when fee-funded purchases reduce token supply, while frequent traders face execution costs, leverage risk and funding expenses. The difference is particularly acute for users making small deposits, where a succession of modest losses and trading charges can quickly consume available collateral.
Market tracking cited a $2.5 million daily revenue figure for the leading perpetual venue on October 20, exceeding the combined earnings of the next nine platforms. Separate liquidation data showed roughly $1 billion in leveraged positions erased on October 15, including about $894 million in long positions. Such events demonstrate how quickly collateral can disappear when prices move against heavily leveraged traders.
Public wallets reveal leverage reversals
The transparency of on-chain positions has also made Hyperliquid a prominent venue for monitoring large traders. Several highly visible accounts that previously posted large gains later experienced severe drawdowns.
Garrett Jin, who was previously linked to major short positions during the â10·11â selloff and was reported at the time to have earned $200 million, later recorded an ETH long-position drawdown of about $250 million. One account balance associated with the episode reportedly fell to around $53.
James Wynn was associated with reported profits exceeding $87 million and position sizes that reached $1 billion before later reversals. Another trader, @qwatio, was identified by on-chain investigator ZachXBT as suspected of links to a fraud case covered in U.K. newspapers.
A wallet publicly labeled â100% WIN Whale (Not anymore)â became another example of a record that deteriorated after earlier consistency. A trader known as âéș»ćâ was reportedly liquidated seven times in around 10 hours on one occasion and later surrendered gains after building funds above $10 million. The traderâs main address was reported to show cumulative profit and loss of approximately $37 million.
Around November 2025, several wallets described by trackers as âinsider whalesâ and âroll-up whalesâ reportedly moved from gains of tens of millions of dollars to near-zero balances. Average losses in that group were said to exceed $40 million.
IMF flags fragmented tokenized-stock trading
The risks of around-the-clock, fragmented trading have also drawn attention beyond crypto-native derivatives. In its October 2026 Global Financial Stability Report, the International Monetary Fund estimated the tokenized stock market at about $2.3 billion at the end of July.
The IMF said more than half of tokenized U.S. stock trading occurred outside regular market hours, while about 80% of transactions involved less than one share. It estimated tokenized-stock volatility at about 1.5 times that of the underlying shares, citing thinner liquidity and fragmented trading venues.
Traditional equity markets absorbed roughly 85% to 99% of tokenized overnight price moves within the first five minutes after the opening bell, according to the IMF. The report also pointed to legal, liquidity and settlement risks in tokenized markets.
Hyperliquidâs fee engine and HYPE buybacks show how decentralized venues can turn high trading activity into sustained token demand. The retail-wallet data shows the other side of that model: small traders, particularly those using leverage through third-party applications, can face a fee burden that compounds long before a position reaches liquidation.
Concerned about fee drag on small traders? Explore lower-friction derivatives on perpetuals and risk management before opening your next position.
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