$PURR - expressing the Hyperliquid thesis

Cat coin gud

If you didn’t already read the recent piece we put out on Hyperliquid, read that first (link) for some context on Hyperliquid and where they are heading.

Hyperliquid against the dYdX backdrop

The bull case for Hyperliquid is clear, it is currently a highly performant decentralised derivatives exchange implemented as an appchain which is eating away at the market share of incumbents like dYdX (Hyperliquid regularly does more volume). With HIP-2, Hyperliquid will increasingly transition to a L1 blockchain whose first app was a very successful decentralised derivatives exchange. This transition greatly increases the usecases for Hyperliquid and equally, increases the valuation potential for the eventual Hyperliquid token.

This bull case becomes even more compelling when we consider it against the back drop of dYdX. With the implementation of spot trading, listing new markets rapidly and now allowing for general purpose computation - Hyperliquid are shipping significantly quicker and appear to be far hungrier than the slow moving incumbent. Billions of dollars of unlocked dYdX, a potentially inflated head count, multiple corporate structures and Antonio stepping down as CEO all indicate high levels of complacency and bureaucracy. Equally, in a market where price is often considered signal, a brutal unlock schedule and relentless dumping has not helped the dYdX narrative:

Compare this to an extremely hungry pre-token team and make your own conclusions…

$PURR

With their points program having come to a close, market participants are now beginning to ask “wen token” and look for other ways to express a bullish Hyperliquid view now that they can no longer accumulate points.

$PURR came into existence via an airdrop to Hyperliquid points holders following the first stage of HIP-1 which enabled native tokens and therefore, spot trading. As an airdropped token which was originally intended to test native asset functionality, $PURR is fully diluted and has become the defacto native token for Hyperliquid. In the golden age of memecoins, it also probably helps that it is a cat coin!

Despite all of this, one does have to ask the question of why an experiment continues to enjoy a valuation north of $80m. The speculation among market participants is that $PURR holders will be recipients of a Hyperliquid airdrop, or perhaps will be able to redeem their $PURR for Hyperliquid tokens or similar. No one actually knows anything (to our knowledge) but $PURR represents a way to bet on some outcome along these lines.

$PURR itself just received an airdrop this afternoon from a team building a Telegram bot on Hyperliquid, this could be the beginning of an incipient trend as an increasing number of tokens launch on Hyperliquid L1 over time.

With $PURR airdrop recipients having received their tokens just over a month ago, we could be seeing a reacccumulation period or in other words, jeets out chads in.

Conclusion

It is hard not to be bullish Hyperliquid at this juncture with the team shipping harder and faster than ever while their largest competitor looks to be very complacent. With points having come to a close, $PURR represents a solid proxy bet, allbeit a high risk bet on Hyperliquid.

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