On October 1, the HyperLabs address applied for a redemption of 3.75 million HYPE from its staking, totaling about $338 million. After the funds arrived on October 7, they were handed to the institutional market maker Flowdesk for OTC distribution.
"This is an over-the-counter transaction with an institution, and will not be sold in the open market."
The first market reaction is panic—HYPE only just touched the $98 mark at the beginning of September, so why would the team de-pledge at this time? But if you look back historically, it’s clear: from December 2025 to July 2026, the team de-pledged 4.93 million HYPE, of which only 1.19 million entered the public market; the remaining 3.14 million were transferred via OTC. Most of that went to institutions. In the same period, HYPE rose from $30 to over $90. In July 2026, when a16z and Multicoin de-pledged, the actual publicly sold portion was only 12.3%. The price still fell from $70 to $52.4—panic itself hurts more than selling pressure. The value of OTC is that it keeps the shock out of the door.
Three HYPE ETFs attracted funds against the trend as BTC and ETH ETFs saw net redemptions; as of August, net inflows reached $284 million. a16z has cumulatively bought 9.18 million shares at an average price of $38.77; Grayscale bought seed shares at $100 in April and still plans to add despite the unrealized loss. Hyperliquid Strategies holds about 13.5% of circulating supply and increased its holdings by $45.8 million over the 16 hours on September 16. Add the 5%-12% annualized staking yield, and institutions are calculating for the long run.
Previously, Hyperliquid injected 97%-99% of trading fees into an assistance fund for daily buyback-and-burn, totaling about $1.3 billion—around 4.77% of total supply. But this logic is tied to trading volume: when volume drops, buybacks shrink. AQAv2, launched on August 26, plugs the gap: in cooperation with issuers such as USDC, it directs 90% of reserve earnings to buyback-and-burn, projected to annualize between $135 million and $200 million—about 24.6% of current average daily revenue. On top of that, HIP-3/HIP-4 requirements force deployers to stake 500,000 HYPE tokens, further locking down token utility.
The substance is not "team cashing out," but the professionalization of value capture: providing early holders with a low-friction exit route, transferring the chips precisely to long-term institutions, and using a second buyback engine to hedge against trading volume fluctuations.
While other DEXs are still worrying about unlocking and selling-off pressure, Hyperliquid has already stitched together an exit channel, institutional demand, and a deflation mechanism into a predictable system. This may not be the answer to a bull market, but it is indeed a sign that the industry is maturing.
