Consider the HYPE token, as Hyperliquid's shift to a user-facing platform and the launch of its BLP lending feature are expected to significantly boost protocol revenue. To position for a potential airdrop, consider using the Felix Protocol, a key application on Hyperliquid that does not yet have a token. Watch for the successful listing of major spot assets like XRP or BNB on Hyperliquid, as this could be a major growth catalyst. The emerging Real-World Assets (RWAs) theme is a key area to monitor, with protocols like Felix aiming to bring tokenized stocks on-chain. Finally, the HYPE token benefits from a strong buyback mechanism, directly linking the platform's revenue growth to the token's value.

Hyperliquid (HYPE)

• Hyperliquid is currently perceived primarily as a perpetuals exchange (perps dex), with its spot markets struggling to gain traction.
  • Spot trading volume is very low for most assets outside of Bitcoin (BTC) and Ethereum (ETH).
  • The platform is missing key, high-volume cryptocurrencies that are popular with retail investors, such as XRP, BNB, and Chainlink (LINK).
  • The initial "outsourcing" model for listing spot assets, which was successful with a single team (Unit), is now facing challenges with fragmentation, lower revenue, and user confusion.
• The platform is strategically shifting from being a backend liquidity layer (a "decentralized NASDAQ") to a user-facing application that owns the customer relationship (a "decentralized Robinhood/Coinbase").
  • This is seen as a more profitable model, as front-end applications like Robinhood earn significantly more revenue per dollar of activity than backend infrastructure like NASDAQ.
• A new native feature called BLP (Borrowed by the Protocol) is being rolled out.
  • This is a portfolio margin system that functions like a traditional borrow/lend protocol (similar to Aave).
  • Hyperliquid will earn a 10% fee on the interest generated by lenders, creating a new, diversified revenue stream denominated in USDC.
• The protocol has a strong token buyback mechanism. A significant portion of protocol revenue is used to buy back the native token (HYPE), directly linking protocol success to token value.
  • This is viewed as "table stakes" in the current market to prove value accrual to token holders.
  • The team is also spending on growth by offering fee splits to developers who build on the platform (e.g., builder codes, spot listing revenue shares).

Takeaways

• Bullish long-term view on the business model shift. The move to become a user-facing "decentralized brokerage" and introduce native monetization features like BLP could significantly increase revenue and user stickiness. This positions Hyperliquid to capture more value from its ecosystem.
• Monitor the success of BLP. The launch of BLP is a key catalyst. If it successfully attracts capital and generates significant interest fee revenue for the protocol, it would be a strong positive for HYPE's value accrual.
• Spot market weakness is a short-term concern but also an opportunity. While the current state of spot markets is a weakness, any successful effort to list major assets like XRP, BNB, or LINK and attract liquidity could unlock a new wave of retail users and volume.
• The token buyback provides a strong value floor. The commitment to using revenue for buybacks provides a direct and easily understandable link between platform usage and token price, which is a positive for investors seeking clear value accrual.

Felix Protocol

• Felix is a borrow/lend protocol built on Hyperliquid's HyperEVM, targeting "power traders" rather than the general retail audience.
• The protocol does not have a token yet.
• Felix is actively exploring the listing of tokenized stocks (RWAs) on-chain. The goal would be to allow these assets to be used as collateral within their lending protocol.
  • The main challenge identified is bootstrapping deep liquidity for these new assets to avoid high slippage for traders.
• Felix is built on top of the Morpho protocol. They are aware of the possibility that Morpho could introduce a fee in the future but believe they have leverage, as they could fork the protocol if the terms were unfavorable.
• The protocol will directly compete with Hyperliquid's native BLP for borrow/lend activity. The speaker believes this competition will primarily be decided by interest rates.
  • Felix is already working on ways to integrate with BLP, potentially allowing its users to access the best rates across both platforms, turning a competitor into a synergistic partner.

Takeaways

• Watch for a potential token launch/airdrop. As a key protocol in the Hyperliquid ecosystem without a token, Felix is a prime candidate for a future token launch. Early users of the protocol could potentially be eligible for an airdrop.
• The move into tokenized stocks is a major potential growth catalyst. If Felix can successfully solve the liquidity problem and become a venue for trading and borrowing against on-chain equities, it would tap into a massive new market. This is a key theme to monitor.
• The competition with BLP is a key risk. Investors should watch the interest rates and user flows between Felix and BLP once BLP is fully launched. Felix's ability to integrate with BLP rather than just compete against it will be crucial for its long-term success.

Investment Themes & Other Assets

Real-World Assets (RWAs)

• The podcast mentions a nascent theory that "RWAs are the new alts for the near future."
• There is perceived high demand for holding and trading spot equities (stocks) on-chain, but the primary barrier is the lack of deep liquidity.
• Protocols like Felix are actively exploring this space, signaling a potential new growth sector within DeFi.

Takeaways

• Investors should pay attention to protocols and platforms that are building infrastructure for tokenized RWAs, particularly those focused on solving the liquidity problem. This is identified as a high-growth area for the near future.

Stablecoins (USDC, USDH, USDT)

• USDC is the dominant and preferred stablecoin within the Hyperliquid ecosystem. There is a strong "stickiness" where users prefer to stick with the stablecoin they are used to.
• USDT is notably absent from Hyperliquid's main offerings. This is not a technical issue but a business one.
  • The Tether team is reportedly unwilling to enter into revenue-sharing agreements, demanding 100% of the treasury revenue, which makes it an unattractive partner for platforms like Hyperliquid.

Takeaways

• The stablecoin landscape on a given platform is often shaped by business deals, not just user preference. USDC's entrenchment on Hyperliquid is a strategic advantage for them within that ecosystem. The high barrier for USDT integration means this is unlikely to change soon.

Morpho Protocol (MORPHO)

• Morpho is a "modular" lending protocol that allows other teams, like Felix, to build on top of it.
• A key question is whether Morpho will eventually turn on a "fee switch" to capture value from the protocols built on its infrastructure.
• The risk of this to builders is mitigated because they have the leverage to fork the protocol if a fee becomes too extractive.

Takeaways

• The modular design of protocols like Morpho creates a more dynamic and potentially more resilient ecosystem. While the base protocol may have monetization challenges, the leverage held by builders (like Felix) can create a healthier balance of power than in monolithic systems. This makes the ecosystem's health less dependent on a single team's decisions.