Hyperliquid Airdrop Model Analysis: Why the "Product First, Token Later" Approach Wins
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Hyperliquid Airdrop Model Analysis: Why the "Product First, Token Later" Approach Wins
Building a cult around images or slogans unrelated to the core product is a substitute for the cult that should center on your product itself.
Navigating Web3 tides with focused insightsAuthor: kaledora
Translation: TechFlow
Mutually compatible perspectives can coexist:
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The Hyperliquid airdrop marks a turning point—reflecting the market’s outright rejection of the prevailing trend favoring insider-backed infrastructure and “air software” projects that typically allocate minimal ownership to the community.
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Raising massive sums at absurd valuations, then launching with ridiculous fully diluted valuations (FDVs), leading to sustained price declines and dumping onto retail investors, is a flawed model.
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For most teams, it's difficult to build without fundraising and without insiders—not even team members—unless founders have already personally earned tens of millions of dollars beforehand.
Here are some thoughts on reconciling these seemingly contradictory viewpoints.
Where Hyperliquid Got It Right
The Hyperliquid airdrop was a defining event of this cycle. I particularly appreciate four aspects:
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It reset expectations around how, when, and to what extent token ownership should be distributed.
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It reaffirmed the centrality of DeFi and user-centric applications in the industry.
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It demonstrated that sell pressure should be resolved quickly, not prolonged.
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The cultural aesthetics of its community
Hyperliquid’s brilliance lies in combining the token timeline of venture-backed projects with the distribution mechanics of an ICO. Build first, launch without a token, iterate multiple times with users, use multi-season point systems to gradually incentivize behaviors most valuable to the protocol, and then release a token over a year later (rather than raising funds before product launch). Yet, like community-funded projects, distribute tokens directly to users.
Ironically, in a space where many founders obsess over minimizing sell pressure by restricting initial distribution and liquidity at token generation event (TGE), Hyperliquid achieved what may be the strongest post-launch buy-side pressure and the broadest token distribution among major protocols in years.
On sell pressure: the more protocols attempt to artificially spread out the pain of short-term speculators dumping, the worse the sell pressure becomes—making it nearly impossible for genuine long-term supporters to hold (as complex supply dynamics in the medium term will outweigh project strength in determining price).
My final point of appreciation for Hyperliquid is its community’s cultural aesthetic—a rarely discussed aspect. "Community" here means people who actually use the product. Crypto’s love for community has evolved into an implicit requirement for every project to cultivate its own pseudo-religious cult—real or bot-generated—filled with exaggerated visual motifs, slogans, and Discords full of profiles (real or bot) repeating a few mantras daily. Building a cult around images or slogans unrelated to the core product substitutes for building a cult around the product itself.
Hyperliquid’s cult exists, but it was—or at least began as—a cult of users, not followers. To my knowledge, its most devoted users don’t even share a self-referential name. I’ve heard “bozos” used informally, but overall, HL’s crypto-native cultural markers are sparse. I’m not sure I’ve ever seen a HL-themed pepe; there’s PURR cat and PIP, but that’s about it. Aesthetically, it’s a clean brand that takes itself seriously, with no cartoon characters flooding its posts.
Yet, Hyperliquid’s cult is exploding—and its social media presence is being thoroughly botified. Its follower count appears to have tripled in recent weeks, despite having only around 30,000 when they started processing tens of billions in daily volume. Compare that to projects with hundreds of thousands or even millions of Twitter followers—yet you don’t personally know a single user!
Even if You Can’t (or Won’t) Replicate Them, You Can Still Learn From Hyperliquid
Setting aside the product, most founders building serious projects cannot simply avoid fundraising—the obvious reason being they don’t have $5–10 million to fund a small dev team for several years. Those privileged enough to do so should consider bootstrapping and capturing the outsized returns possible if execution is strong. But if you’re a college graduate starting up or in any way an ordinary person, that likely isn’t an option.
Even if Hyperliquid sets unrealistic expectations for those who must raise external capital, I believe this reset is actually beneficial if you're raising modest amounts rather than huge sums.
Just observe the type of announcement that triggers the biggest status boost and consistently fuels bot-driven growth: funding announcements. Over the past few years, fundraising news has become the definitive status signal in crypto—the bigger, the better. This creates natural pressure on founders to raise increasingly large amounts at higher valuations, regardless of actual capital needs for the next stage. This isn't unique to crypto, but if you believe in crypto’s foundational ethos at all, this trend is certainly not healthy for the ecosystem.
Even if you can’t avoid fundraising altogether, you can raise more reasonable amounts, stay focused on the product, and opt out of the race to secure the largest funding round. Instead, compete on who can build the best product—this would be more interesting and, hopefully, better for crypto as a whole.
Summary:
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HL puts DeFi first and redefines token distribution models
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Sell pressure should be resolved quickly
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Reject communities that aren’t centered on the product
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The market now allows you to focus more on product development than fundraising
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@kaledora
