After the dramatic collapse of FTX, Binance founder Changpeng Zhao (CZ) is once again at the heart of the controversy, with speculation growing that the takedown of Hyperliquid, a decentralized exchange behind the hype token, can be guided to engineering.
As Aster’s trading volumes skyrocket and concerns grow over the unlocking of tokens in the hype upcoming, the whispers of a potential “death spiral” are rapidly spreading. Is Hyperliquid the next domino, or is FUD simply exaggerated?
Double killing for hype
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Former Binance CEO CZ has recently been drawn into the heated debate surrounding high lipids (hype). The debate broke out as high lipids could soon face intense supply pressures.
Meanwhile, the newly-occurring Project Astor, rumored to be supported by CZ, recorded a 24-hour trading volume, more than three times the high lipids. Together, these factors raise questions. Is high lipids at risk of losing their position quickly?
First, a recent study by the Maelstrom Fund, led by Bitmex co-founder, highlighted a serious flaw in Hyperliquid’s tocononomics.
The 237.8 million hype tokens began linear vesting over 24 months starting November 29th, representing approximately $500 million per month, according to the report. However, it is estimated that buybacks will only be absorbed by around 17% (approximately $90 million), so the market could face an oversupply of around $410 million each month.
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Maelstrom also pointed to the role of data (data availability tokens) such as Sonnet, pointing out $583 million in hype and $305 million in cash. Still, they argued that these were insufficient to offset the unlocking pressure.
Maelstrom further warned of growing competition. They particularly questioned their involvement with Astor two months before CZ’s Hyperliquid unlock event. This has spurred community speculation that CZ might attempt to “kill” high lipids to clear Aster’s path to growth.
Can CZ manipulate hype?
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Some communities have accused CZ of being “one of the biggest holders from Get Go.” In fact, there are claims that he holds up to 10% of the hype, and has not yet been sold, and is preparing for a “death spiral final act.”
There is no concrete evidence, but such rumors raise serious concerns. The logic is: If the main owners also operate derivatives markets (hype/USDT), they can move prices in favor of their long/short positions. On top of that, they were able to throw away all their holdings in a “complete vamp attack” on the hype.
“Does CZ really think that by shortening HL/NANCE and trying a full vamp attack on tokens, you can’t kill $hype by dumping his entire spot bag into the open market?” one user asked with X.
On another note, Trader Ignus argues that the actual problem is the market reflective mechanism. A price drop reduces the value of future airdrops/accumulations, thereby weakening the incentives of high liquid trading. This creates a loop in which reduced participation will further reduce buyback fees and exacerbate price declines.
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“High advertising prices drop
That said, not everyone agrees with a bearish story. Some people argue that profitable investors (from Aster, for example) are more likely to reinvest in powerful products like high lipids, but not all fluctuations in volume indicate a death to the platform.
“The story of high lipids being dead, CZ theory is now the top holder to throw away hype to zero, making a weekly revenue year… Most of you don’t know what this is doing with the code, or just want engagement at this point,” another X user noticed.
Artemis data shows that high lipids have generated more charges in the last 24 hours than Tron, Solana, BNB, Ethereum, and Bitcoin combined.
