Hyperliquid, a fast-growing crypto derivatives exchange, offers outside builders the chance to launch their own perpetual-futures markets in exchange for up to 50% of the trading fees those venues generate. However, this policy is now coming under scrutiny from major industry figures, including Kain Warwick, founder of Infinex and Synthetix, who questioned whether such generous incentives can last.
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Through its HIP-3 initiative, Hyperliquid allows anyone to stake 500,000 HYPE—valued at approximately $28 million—to deploy a permissionless perpetual futures market. Builders keep as much as half the trading fees from these markets, many of which focus on tokenized real-world assets such as stocks and commodities. According to DefiLlama data, builder-run markets have grown significantly, rising from about 2% of Hyperliquid’s trading volume at the beginning of 2026 to nearly 50% today.
Warwick suggested on the August 12 episode of the Unchained podcast that such a high revenue split is unsustainable, drawing from his experience at Synthetix. At Synthetix, he recalled, outside market makers sought a much larger cut but never received more than 30% of fees. Highlighting Hyperliquid’s model, he argued, “The fact that Hyperliquid has landed on 50% of the fees is a bit crazy. I can’t see how that’s sustainable.”
Kain Warwick pointed out that while market builders can bring their venues to alternative platforms, Hyperliquid’s dominance as the primary trading venue gives the exchange the power to adjust builder incentives at any time. He predicted the current 50% split is likely an “opening offer that probably is gonna change.”
Financial data shows why the builder cut has become a critical issue for HYPE holders. Hyperliquid routes 99% of its own share of trading fees—excluding what goes to builders—into a buyback Assistance Fund for the HYPE token. As the protocol’s share shrinks, so does the scale of buybacks, directly affecting token value dynamics.
Fee split impacts and revenue decline
Despite steady trading volume, Hyperliquid’s gross revenue has fallen for four consecutive quarters. Third quarter 2025 revenue was about $357 million, but this figure declined to approximately $202 million by the second quarter of 2026—a 43% drop. Quarterly token buybacks mirrored this decline, falling from almost $290 million to roughly $149 million over the same period.
Warwick emphasized that while overall trading volumes have remained stable, the allocation of fees has shifted significantly. “The fees are just going to different people,” he noted, pointing to the redistribution from the protocol to builders.
Market concentration and systemic risks
Open interest within the HIP-3 markets is increasingly concentrated, with trade.xyz accounting for more than 90% of all HIP-3 open interest. In July, tokenized real-world asset perpetuals on Hyperliquid reached a record $3.6 billion in open interest, even surpassing bitcoin’s open interest on the platform. This dependency on a single counterparty presents risks, both for the builder and for Hyperliquid itself.
Warwick underscored the vulnerabilities of relying on one dominant builder: “You never wanna be fully reliant on one platform,” he said, explaining that Hyperliquid could reduce builder fees or subsume those markets at any moment, potentially destabilizing its biggest partner.
Amid these developments, HYPE recently traded at about $57.66, below its June peak of $76.67, while the protocol continues its regular token burn from daily fees.
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