Introduction

On November 29, 2024, Hyperliquid dropped its token, and it turned out to be a massive airdrop success, hitting a peak of around $35 and still holding strong at $24.5. It’s easily one of the standout tokens in recent times.

Now, there’s a new(ish) player stepping up: Paradex. This decentralized perp DEX comes from the largest institutional liquidity network for crypto options, Paradigm, and yes, they’ve got an airdrop in the works, too. While this isn’t exactly breaking news, it’s been flying under the radar for a lot of people, though it’s recently started picking up more social traction.

So, let’s dive in and see what to expect from this airdrop and whether Paradex has what it takes to be a real contender to Hyperliquid.

Tokenomics Comparison

Airdrops tend to spark a lot of discussion, often leaning negative. A report published by ChainCatcher in autumn 2024 found that 88% of 62 airdrops had declined in price, with most experiencing a sell-off within the first two weeks. The report also highlighted that larger community-driven airdrops tend to see better retention and price stability, while high FDV (Fully Diluted Valuation) launches have frequently led to weaker performance.

Hyperliquid managed to break the trend later in the year, and now Paradex is preparing to take its shot. So, let’s take a closer look at how their token distributions compare.

HyperLiquid

Hyperliquid launched $HYPE with a generous community-focused airdrop that took people on a journey towards riches. The total supply of 1,000,000,000 HYPE tokens was distributed as follows:

• Future Emissions & Community Rewards: 38.888%
• Genesis Distribution: 31.0%
• Core Contributors: 23.8%
• Hyper Foundation Budget: 6.0%
• Community Grants: 0.3%
• HIP-2 Allocation: 0.012%

This shows a community-first approach, with team allocations being unlocked gradually over approximately 2 years, with a full release expected around 2027-2028.

Paradex

Moving on to Paradex and its future $DIME token, we see a somewhat different approach that still shares similarities with that of Hyperliquid:

The total token supply will be distributed as follows, with 57.6% allocated to the community

• Community Airdrop: 20.0%
• Ongoing Community Rewards (post Airdrop): 26.6%
• Liquidity Programs: 5.0%
• Foundation Budget: 6.0%
• Core Contributors: 25.1%
• Future Core Contributors and Advisors: 3.8%
• Paradigm Shareholders: 13.5%

The first noticeable difference is the 20% airdrop for the community at TGE as opposed to 31% from Hyperliquid. This in itself is likely to make people less optimistic regardless of it still being a substantial amount with further community rewards also lower than that of Hyperliquid (26.6% vs 38.9%). There is also the additional factor of 13.5% of the total tokens being allocated to Paradigm shareholders with a 100% unlock at TGE. This will cause a minimum level of sell pressure which can change depending on the risk appetite of the Paradigm shareholders, and as the Paradex Foundation write “this straightforward approach gives the community full visibility from the start and enables a natural transition of tokens to long-term holders should Paradigm shareholders wish to sell.”, which could be interpreted that Paradigm shareholders will not become these long-term holders.

A positive point regarding the unlock for core contributors is that it is 80% performance-based, which will likely create some motivation to turn this into a successful decentralization perpetual exchange. The remaining 20% is set to follow a time-based schedule, and additional details are expected to be shared by Paradex ahead of the token launch.

It is also important to stress that 5% has already been allocated to users who participated in the beta and season 1, lasting from February 1st, 2024, to January 2nd, 2025, with season 2 currently running from January 3rd, 2025, till approximately July 31st 2025.

Paradex vs Hyperliquid Tech & Fees

Core Architecture

Current Features

The above comparisons show that Hyperliquid is relatively mature, whereas Paradex is still moving on from its infancy. In addition, based on the existing roadmap, it seems likely that it will stay a layer2, hoping to enter a “stage 2 rollup” later in 2025.

Based on the L2BEAT framework documentation, a Stage 2 rollup represents the highest level of decentralization and security in rollup technology. The key requirements are:

1. A permissionless fraud-proof system where anyone can submit proofs
2. A 30-day minimum exit window for users during upgrades (except for on-chain detected bugs)
3. A Security Council with minimal powers, that is only able to intervene when there are verifiable on-chain errors

Paradex, at this point, is still centralized but is moving toward decentralization, which will hopefully be achieved later this year. When evaluating Hyperliquid's performance, centralization doesn’t appear to be a major concern except in discussions about the broader future of crypto as users seem more interested in deep liquidity and a broad selection of perpetuals.

Fees & Usage

Paradex operates a simpler, fixed fee structure with maker rebates at -0.005% (earning traders money) and taker fees at 0.03%. Fees are charged on notional value regardless of the leverage used.

Hyperliquid uses a more dynamic model based on 14-day rolling volume, with fees introduced in June 2023 starting at 0.025% (2.5 bps) for takers and -0.002% (0.2 bps) maker rebate. Their system includes volume-based tiers and referral rewards up to $25M in volume. Sub-accounts share fee tiers with master accounts, while vault trading is calculated separately.

A key difference is fee distribution: Hyperliquid directs all fees to the community through HLP and an assistance fund (held mainly in HYPE token), while Paradex's fee distribution model isn't explicitly stated in the documentation at this point.

For users placing limit orders (makers), Paradex is significantly better with a -0.005% rebate compared to Hyperliquid's tiered system that starts at -0.001% rebate and only reaches -0.003% at the highest tier (>3.0% of 14-day maker volume). For market orders (takers), Hyperliquid is actually more expensive at retail levels, charging 0.035% for volumes under $5M compared to Paradex's flat 0.03%. Hyperliquid becomes more competitive only after $25M in 14-day volume, where taker fees drop to 0.025%. Therefore, for retail traders (typically under $5M in 14-day volume), Paradex is more advantageous for both market and limit orders, while Hyperliquid becomes more attractive for very high-volume traders who can access their better fee tiers.

Both the $HYPE and $DIME token will have similar usage in the future, being used as payment for fees and fee discounts, staking & governance.

How to earn XP on Paradex?

Paradex's XP system rewards users for active participation in the ecosystem during Season 2 (January-July 2025). Users can earn from a weekly pool of 4,000,000 XP through various trading and community activities. The main ways to earn include:

• Active trading and fee payment
• Providing liquidity (with emphasis on spread, depth, and uptime)
• Maintaining open positions
• Depositing collateral for trading or vaults
• Community engagement (Discord activity, research publishing)
• Referring new users
• Using new platform features

The exact XP formulas and category weights are intentionally not disclosed to prevent system gaming. Users can increase their legitimacy score by linking social media accounts (X and Discord). Liquidity providers for less-traded pairs may receive additional XP rewards. Distributions occur weekly on Fridays, with additional bonuses available through the referral program.

DEX volume and adoption

1. Size and Volume Dominance

• Hyperliquid has a TVL of $657.49m, 17x larger than Paradex's $37.97m.
• Cumulative volume: Hyperliquid $895.116b vs. Paradex $48.115b.
  • Paradex’s monthly volume has been ranging between $1.4B - $2.8B since september 2024.
• 24h Perps Volume: Hyperliquid $6.229b, over 55x Paradex’s $112.03m.

2. Volume Spikes & Growth Patterns

• Hyperliquid saw a major volume spike in November 2024 after its token launch, with further growth into 2025.
• Paradex has grown steadily but lacks major volume surges like Hyperliquid’s.

Hyperliquid had strong inflows even before its token launch, but the majority of its volume and USD inflows have occurred since November 2024. Additionally, Hyperliquid's social following is about 10 times larger than Paradex’s, indicating that Paradex remains relatively under the radar, which aligns with its lower perp DEX volume and TVL.

Conclusion

Paradex is gearing up for its moment in the spotlight, but how it stacks up against Hyperliquid remains to be seen. The differences in token distribution, fee structures, and underlying technology highlight distinct approaches Hyperliquid, with its more mature custom L1, and Paradex, still evolving on Starknet, aiming for deeper decentralization.

The fee structures of Hyperliquid favor different trader profiles, with Paradex appealing to retail users with lower taker fees and better maker rebates.

The real test will be user adoption and whether Paradex can deliver on its roadmap, including its push toward a Stage 2 rollup for greater decentralization. With its future airdrop and ongoing incentive programs, Paradex has an opportunity to establish itself in the perp DEX space.

So, is Paradex worth farming, and what can be expected at TGE? Given that Paradigm shareholders receive a significant allocation with a full unlock at launch, the airdrop dynamics will likely differ from Hyperliquid’s.

That said, for traders with less than $25 million in bi-weekly volume, Paradex currently offers more favorable taker and maker fees though the lower liquidity is an important factor to consider.

Ultimately, if you're already trading perpetuals, there’s little reason not to use Paradex, regardless of how the airdrop plays out.