Hyperliquid, a decentralized finance (DeFi) protocol, has introduced staking on its mainnet, allowing users to earn rewards by supporting network security. Starting December 30, users can choose from 16 validators based on criteria such as uptime, commission rates, and reputation.
Hyperliquid, which boasts over $12 billion in trading volume and $8.6 million in cumulative revenue (according to DefiLlama), offers decentralized trading for cryptocurrencies. Staking enables users to lock tokens to support the network and earn rewards.
According to data compiled by ASXN, $344 million worth of HYPE tokens have been staked.
In late November, Hyperliquid conducted an airdrop of 310 million HYPE tokens (31% of the total supply), causing the token’s price to surge from $3.90 to $26.80. The remaining supply allocation includes 38.8% for future rewards and emissions, 6% for the Hyper Foundation treasury, 0.3% for grants, and 23.8% for the core team (locked for one year).
DEX platforms, including Hyperliquid, recorded an all-time high of $462 billion in trading volume in December, fueled by optimism over potentially favorable U.S. policies in 2025.
Taxation of Staking Rewards
Despite optimism about a more favorable environment for digital assets in the U.S., the DeFi industry faces significant challenges. The IRS has ruled that staking rewards are considered “income” and are taxable based on their market value when received.
On December 27, the IRS issued a regulation requiring front-end protocols in cryptocurrency transactions to report total transaction amounts and taxpayer information, classifying them as brokers.