Hyperliquid’s HYPE token reached an all-time high of over $62 on May 21, 2026. Analyst Zennon Kapron emphasized that the main reason for this rise is the buyback mechanism implemented on the Hyperliquid platform. Although spot ETF openings attracted attention during this period, the cash flow provided was limited compared to HYPE purchases. Since launch, the protocol has used a total of more than $1.16 billion in transaction commissions to buy HYPE directly from the market.
The role and working of the Assistance Fund
Hyperliquid transfers approximately 99 percent of the commissions obtained from both perpetual and spot transactions to the fund called Assistance Fund. Assistance Fund purchases HYPE from the market in blocks and without requiring any management decision. This process works directly with the revenue model of the protocol; The administration or community votes have no power to stop it.
HYPE purchases by the Assistance Fund significantly dwarfed inflows into the spot ETF. For example, Bitwise launched its first Hyperliquid spot ETF in the US in May and attracted tens of millions of dollars of interest in its first week, but the Assistance Fund only made a difference in scale by purchasing $316.76 million of HYPE in the third quarter of 2025.
Kapron stated that ETF openings stand out in the headlines, but the main factor that determines the price is the automatic buybacks maintained by the Assistance Fund.
Mini dictionary: Assistance Fund; The fund that receives the majority of transaction fees in the Hyperliquid protocol and is used to automatically purchase HYPE tokens from the market without being subject to any management decisions. The fund makes regular purchases on a block basis and this process is completely transparent and algorithmic.
The Assistance Fund is not the only support. The investment fund, called Hyperliquid Strategies, trades on Nasdaq under the ticker symbol PURR and holds about 20 million HYPE. This fund posted net earnings of $152.5 million in the last quarter, mainly from unrealized profits. In addition, up to 90 percent of the reserve returns obtained from USDC assets held across the platform are transferred to buyback and ecosystem incentives.
Thanks to this triple structure, a constant demand for HYPE is created in the market and the price of the token is supported from below. However, the sustainability of this model depends entirely on the continuity of transaction volume.
Volume dependence and risks
Quarterly buyback data revealed a downward trend in recent quarters despite record token prices. The Assistance Fund repurchased $316.76 million in the third quarter of 2025, $255.05 million in the fourth quarter and $192.25 million in the first quarter of 2026, indicating a decrease of approximately 40 percent in two quarters.
During the same period, HYPE continued to hit new highs. While the price increased, the decrease in the size of the buyback attracted attention. Especially when there is a market-wide recession, the weakening of buyback support becomes a critical risk for token holders.
Kapron points out that in a major crypto market decline, perpetual-futures volume may drop sharply, so the buyback mechanism will shrink at the same pace. Thus, the support of the mechanism decreases when the receiver is needed the most.
An additional risk is the gradual release of locked HYPE tokens. As more tokens come into circulation, the Assistance Fund will need to buy back a much larger volume to offset the current selling pressure and maintain price stability. If supply increases while volume decreases, the pressure will increase.
As Kapron points out, buying HYPE now depends almost on a single variable: the need to increase the volume of perpetual futures transactions in Hyperliquid. This presents a very niche and risky position; Investors are advised to carefully review this structure before taking positions at current price levels.
