LiquidLaunch - HyperEVM Beta Play Thesis

• ◆HyperEVM is one of the few L1s that has seen traction. Hyperliquid’s success + the fact that Hyperliquid team still has a decent amount of HYPE tokens leftover for community implies that they might do a secondary HYPE airdrop - which should keep the HYPE flywheel going for a while

• ◆Its hard to find many investable tokens within Hyperliquid’s ecosystem
• ◆Given scarcity + potential expected flows - best to bet on plays that capture both ‘speculation’ and ‘flows’
• ◆This is where LiquidLaunch comes in

Overview

• ◆Couple of things are still working in the market
  • ◆Bitcoin
  • ◆Hyperliquid
  • ◆And select memes
• ◆For Bitcoin
  • ◆Its a pretty easy investment case
• ◆For Hyperliquid
  • ◆They have fundamentals on their side:
    • ◆Derivatives volumes
    • ◆DEX volumes on hyperevm with an increasing volume share (relative to global volumes)
    • ◆And interestingly - meme performance relative to other ecosystems over the past month or so

• ◆For the derivatives side, HYPE itself is the best exposure
• ◆Beyond HYPE, there isn’t much tokenized within the HyperEVM landscape
  

• ◆Heck, Hype has been the best exposure in general v/s ecosystem plays, as shown in the chart below

• ◆So essentially
  • ◆Need to either bet on HYPE alone (safe option) or something that captures HYPE and its memes + fundamental growth
• ◆This is where liquid launch comes in

• ◆LiquidLaunch is Hyperliquid’s first native ERC20 token fair launch platform + a multi market DEX aggregator (LiquidSwap) on HyperEVM
• ◆How does the launchpad work?
  • ◆Typical on-chain bonding curve sale - with listing on HyperSwap/KittenSwap (spot DEXs on Hyperevm) once bonding is complete
  • ◆Has a 1 hour dev lock to try and reduce rugs
  • ◆Charges a 1% fee per trade
• ◆How does the aggregator work?
  • ◆Aggregator is called ‘LiquidSwap’
  • ◆Combines liquidity from HyperEVM DEXs (Kittenswap, HyperSwap and Laminar)
  • ◆Pretty typical DEX. Nothing out of the ordinary.
  • ◆Charges a 0.05% fee per trade

• ◆Key innovation/selling point
  • ◆Is essentially that its more of a platform that integrates token launchpad/aggregator under one protocol
  • ◆Have recently enabled LIQD (Liquid Launch’s toke) staking - with 100% of the protocol’s revenue (in HYPE) being shared with the stakers

The core competition would be:

• ◆Hypurrfun (on launchpad side)
  • ◆Has broadly seen traction decline (shown below) - especially post the move to have a minimum threshold of HFUN required to launch a token
• ◆No real competition on the aggregator side at the moment

Traction

HyperEVM

• ◆There is clearly a sense of traction as evident by Daily unique users > 50k and daily transactions > 404k

LiquidLaunch

• ◆There is no timeseries data on the launchpad side of things that’s publicly available
• ◆Total volume since launch has just crossed >$50m
  • ◆This gives us roughly $300k in volumes per day

• ◆Liquidswap (the dex aggregator)- has seen some traction
  • ◆$6m volumes per day
  • ◆1k in daily users

• ◆Lastly, the protocol recently enabled LIQD staking:
  • ◆~304m LIQD have been staked
  • ◆i.e. 27% of total supply is staked
    • ◆This figure is likely to go up given the team have said they will likely stake their tokens (and not sell once fully unlocked (in July 2025))
  • ◆Rewards are in HYPE, which currently equates to $17m (ann.)

Token

• ◆Total supply: 1.19b LIQD
• ◆Circ supply: 1.11b LIQD
• ◆Breakdown:
  • ◆Team: 8.91% - locked for 6 months
    • ◆Vesting from July 2025 with 20m LIQD per month
    • ◆At current price ($0.03), this accounts for 23% of daily volume and ~3% of circ supply being sold per month.
    • ◆Have to take the team on their word and assume this won’t be hitting the market anytime soon
  • ◆Treasury: 8.91%
  • ◆Community: 8.91%

Team

• ◆Partially doxxed:
  • ◆https://x.com/lordshisho - core dev. Involved with Sei (Seipex.fi - a fair launchpad - although doesn’t seem to have much traction)
  • ◆https://x.com/JoshDev0 - frontend dev

Valuation

• ◆The protocol currently trades at a $58m FDV with a FDV/Revenue (ann.) i.e. ratio of 25
• ◆For comparison, Jupiter and Raydium (not exact comparisons but still) currently trade at 39 and 8 P/R respectively but have had historical peaks >100 during frenzy periods i.e. before both protocols became more mature.
• ◆So, as far as the current P/R goes - think 25 is roughly fair with the expectation that this can expand to close to a 100 in a bullish scenario.
• ◆Table below summarizes my valuation and expected multiple for LIQD (4.2x)
  • ◆The core assumptions are around volumes and P/R expansion
    • ◆P/R expansion: covered above - the idea is these speculative plays do experience some pickup in P/R during frenzy periods
    • ◆Volumes:
      • ◆1.5x increase in base case
      • ◆3x increase in bull case: seems reasonable given competitor hypurrfun actually did a 10x increase in volumes during peak periods
• ◆The overall weighted implied FDV is $249m, which is actually lower than Hypurrfun’s peak FDV (~$300m) - makes this reasonable. Some discount is fair given we don’t have as much visibility into Liquidlaunch’s launchpad numbers yet

• ◆Given the P/R is a sensitive unit, charts below help visualize how the multiple would look like under base and bull case with different P/R assumptions

• ◆Looking at the potential downside:
  • ◆Return/Risk ratio of:
• ◆329/40 = ~8x - that’s chunky enough in my opinion to take the risk
• ◆LIQD/HYPE ratio - is definitely looking interesting
  • ◆LIQD outperforming hype since like middle of April. Currently approaching prior peaks in the ratio - key is to see this breaks out
• ◆LIQD/HFUN ratio definitely makes it clear which launchpad platform is currently the preferred choice on Hyperliquid

Conclusion

• ◆Overall - think the core premises + early traction (whatever data is available) + lack of Hyperevm plays makes this a decent bet on the Hyperliquid ecosystem
• ◆Core concern here is:
  • ◆Team unlocks - this is definitely a bet on the team and assuming that Hyperevm takes off meaningfully to sustain any sort of team unlock sell pressure
    • ◆Its not extreme - so that’s good
  • ◆Outside of the above - the other core concern is - probable pickup in competition
    • ◆This is inevitable - but these guys have a first mover advantage
• ◆Thesis Invalidation
  • ◆Proper competitors show up on aggregator side
    • ◆Likely to happen so key to monitor aggregator volumes + market share on Hyperevm
  • ◆Hyperevm itself loses steam
    • ◆Hyperevm/Solana tvl and HYPE/SOL price ratio might be a good reference ratio here - currently does not indicate any signs of slowdown

Most of the above data is available at the following dashboards (+ helps in monitoring the position):

• ◆Hyperliquid Dashboard
• ◆Hyperliquid TradingView Dashboard