The Hyperliquid development team provided clarity on Saturday’s token unlock in response to community fears of increased selling pressure.
The team behind the Hyperliquid decentralized exchange (DEX) disclosed a 1.75 million HYPE token unlock for its developers and core contributors on Saturday, valued at over $60.4 million at the time of this writing.
Saturday’s token unlock was previously announced and is part of HYPE’s vesting schedule, according to pseudonymous Hyperliquid developer iliensinc, who celebrated the first anniversary of Hyperliquid’s historic airdrop and token generation event. He said:
“For perspective, about 270 million tokens were fully unlocked on Nov 29, 2024, in the largest airdrop in history, measured in today’s market value at about $9.5 billion. There are no investor unlocks, as Hyperliquid never raised any external capital.”
The unlock sparked fear about potential selling pressure that could impact HYPE’s market price, which declined by about 4.6% at the time of this writing.
Hyperliquid’s airdrop and token generation event was considered a landmark debut in the crypto industry that changed product launches, by touting a community-focused model, rewarding early adopters, developers, and users, as opposed to venture capitalists.
Related: Trader torches $3M to punch a $5M hole in Hyperliquid’s vault
“Even if the team pinky swears to not sell, there is nothing holding them to that,” founder of the BitMEX crypto exchange and market analyst Arthur Hayes said.
HYPE token holders must expect a non-zero chance of daily selling pressure, which has already been priced in by the market, reflected in HYPE’s decline since September, Hayes added.
The price of HYPE has declined by about 42% from its all-time high of about $59.40, reached in September, and is trading well below its 200-day moving average, a critical support level.
HYPE started falling on September 19, before the historic market crash in October that wiped away up to 95% in value from certain altcoins.
The token fell by about 54% in a single day during the October 10 market crash but rebounded to the $40 level within two days of the crash.
Analysts and crypto industry executives have praised Hyperliquid for its revenue generation and the platform’s ability to handle $330 billion in monthly trading volume with a small development team.
