ICP Tokenomics are MUCH Better than Hyperliquid's

[00:00:00]Welcome back to Blockchain Pill. My name is Alex and welcome back to a new video.

[00:00:03]In this video, I want to compare ICP's tokconomics to one of the giants in the crypto space and that is Hyperlid. And we see on our crypto timelines that everybody's super super bullish on Hyperlid right now. And listen, rightfully so. The price has been pretty much up only in 2026. People are talking about the Hyperlid buyback and burns like it's the best thing ever. And it's an incredible system, don't get me wrong. and the price has appreciated pretty nicely since the beginning of the year. However, there are a few things that many people are not paying attention to which I want us to discuss in today's video. And after we compare the tokconomics of ICP and Hyperlid, we will take a dive into ICP's mission 70 which is definitive to further reduce the ICP inflation. I want us to first of all look at the FDV of both projects.

[00:00:54]This is an important number. This is the number that tells you what you're really buying into. It reflects what the project is worth. If every single token that will ever exist is already in circulation today. Circulating market caps tells you where things stand right now. FDV tells you where the supply is actually going. And we're going to start with ICP because ICP has something that Hyperlid simply cannot say. ICP circulating market cap right now is approximately $1.4 billion. Its FDV is also approximately $1.4 billion. It's the exact same number because all of the ICP tokens are currently in circulation.

[00:01:30]There are no more VC unlocks, no more seed round investors waiting to get their tokens to dump on the retails.

[00:01:36]Everything is in circulation. I think it's not even just Hyperlid that cannot say the same thing. I think it's most of the projects in crypto that cannot say the same thing. The final major unlock for ICP tokens happened on June 11th, 2025. That's when every last batch of seed and private sale allocations finally hit circulation. Every early investor, every VC, every team allocation fully unlocked and it's over.

[00:02:00]It's done. The overhang that waited on ICP since the date launch in 2021 is completely gone. Now, let's have a look at Hyperlquid. I want to say I said this in previous videos as well. I first used Hyperlquid in 2025 when ICP got listed on both Hyperlquid and Astra decks. You get Binance level of liquidity and speed on a hyperlquid. It's it's just a good project. Like it definitely won the perpetual DEX wars out there and it's definitely one of the good projects of crypto. The community is also strong.

[00:02:29]You know, they received a massive airdrop. Overall, Hyperlid is a decent project. However, in my opinion, not at those valuations. Hyperlid's circulating market cap is approximately 13.4 billion. So it's almost 10 times higher than ICPs, ranking it number 10 on Coin Gecko. But the fully diluted valuation of Hyperlid is approximately 57.5 billion. So that's almost like four or five times the circulating market cap.

[00:02:57]That means that the circulating market cap is less than a quarter of the FDV.

[00:03:00]As of today, approximately 22.24% of Hyperlid's total supply has been unlocked. The remaining tokens are still locked and will be released according to the vesting schedule which extends into 2027. So when you buy hype at today's price and at today's market cap of $13.4 billion, you're actually buying into a fully diluted valuation of $57.5 billion. And this supply is coming on a schedule every single month whether the market is ready for it or not. So, we hear people talking about the token buybacks and that 99% of the hype revenue goes toward token buybacks and burns and that is impressive given the volumes that Hyperlid has and everything else. But still, there is 75% of the entire token supply that is yet to hit the market. In my opinion, the market is not pricing that in. People are super super hyped on hype right now when it's close to the all-time highs. Listen, I don't tell people to go ahead and sell their hype, but at least, you know, get a clear image of the whole picture. The unlocks are not a one-time event. This is the recurring reality of owning a token where 78% of the total supply is still vesting. Hype is structurally net inflationary due to the monthly unlocks.

[00:04:13]The buyback program, which is genuinely impressive, routing 99% of the protocol fees into purchasing and burning hype, is working overtime to absorb that supply and is running against a tide that keeps coming every month for the next year and a half. I want us to go back to ICP because ICP is actually even extra steps. So, it's not enough that there are no more unlocks on the way.

[00:04:35]Definitely came with a solution to further lower inflation. It's called mission 70.

[00:04:41]ICSB's inflation has been a talking point for the bears and definitity took it seriously. ISP gets minted in two major ways. Voting rewards paid to neuron holders who participate in governance and node provider rewards paid to the people running the physical infrastructure that makes the network function. Those two streams have been minting new ICP at a rate that network usage based burning hasn't fully offset, resulting in steady cell pressure from stakers dispersing maturity and node providers converting their monthly rewards. On January 13th, 2026, Dominic Williams and Definitity Economist Bjorn Asen dropped the Mission 70 white paper.

[00:05:16]The network nervous system has since approved Mission 70, a set of changes to voting and note provider rewards designed to cut ICP inflation by at least 70% by the end of 2026. The governance proposal passed with over 53 community support. The target of mission 7 is to bring the annual ICP inflation down from 9.72% down to 2.92. That's a 70% reduction and it goes there through two tracks. Track number one is supply reduction accounting for 44% of the total cut on voting rewards. The maximum dissolve delay is being reduced from 8 years down to two years and the minimum from 6 months down to two weeks. A new convex reward curve means short-term stakers get modest rewards while long-term commitments remain well incentivized up to 7% APY for the 2-year stakes. Legacy long-term stakers receive a 10% reward boost through 2030. On node rewards, Gen 1 node providers see a 40% reduction in rewards with SCV subnet sizes reduced from 13 nodes to 7. The rationale is straightforward. The reward to cost ratio for Gen One node providers was between two and five, meaning the protocol was paying between two and five times what it actually costs to run the hardware. And Mission 70 aims to correct that. Definitation from 9.72% in January 2026 to 5.42% in January 2027. That alone is significant, but it's only half of what Mission 70 is doing. Track two is burn acceleration, delivering the remaining 26% of the inflation cut through real network demand. On ICP, there are no gas fees the way you experience them on Ethereum. Instead, developers pay for compute by converting ICP into cycles, the unit of computational fuel that powers everything on a network. Every canister call, every AI inference, every cloud engine workload consumes cycles permanently and that ICP is gone out of the circulation. To achieve the full 70% inflation reduction, the cycle burn rate needs to increase from the current 0.5 XDR per second to 77 XDR per second, which is a 15x increase. It sounds like a lot and it is a lot. However, ICP was for a few periods of time in 2025, it actually became deflationary without even the reduction in staking rewards and the note provider rewards. The white paper notes that the burn rate already exceeded this level for several months in 2025. The network already demonstrated it can hit this target. It already happened. This is not a theoretical number. The demand drivers that get the burn rate there permanently are cloud engines and caffi. Caffi is definitable directly inside canisters. An ICP canister can call AI inference natively, meaning AI powered applications that run entirely on decentralized infrastructure become possible. The ICP team calls this the selfwriting internet where users describe what they want in natural language and CFAI generates the onchain code to run it. Every application built and run through caffeine burns ICP.

[00:08:28]Every cloud engine deployment burns ICP.

[00:08:31]So ICP has this buyback of ICP and burned to generate compute. It's used by developers. So it actually has a use case. It's not like definitity is buying ICP from the fees to burn it. This ICP is actually burned for apps to exist on the ICP blockchain. Cloud computing generated about $1 trillion in revenue in 2025 and is projected to hit two trillion by 2030. Definity is pitching cloud engines as ICP's entry into the market. And even capturing a small slice of that would represent enormous cycle burn. This is the mechanism. More compute demand means more ICP converted to cycles. More cycles burnt means reduced supply. Reduced supply means increasing scarcity. Increasing scarcity means the token economy gets structurally tighter every time someone runs a workload on the network. So here's the full picture side by side.

[00:09:20]Hyperlquid circulating market cap of $13.4 billion the FDV of 57.5 billion only 22% of the total supply in circulation 78% still vesting through 2027 monthly unlocks every single month structurally net inflationary. It does indeed have an incredible buyback program, routing 99% of the fees into hype purchases, but running against a tide of new supply that doesn't stop for over a year. In contrast, we have ICB circulating market cap approximately $1.4 billion. FDV approximately $1.4 billion. It's the same number because all of the tokens are in circulation.

[00:10:03]Supply fully vested as of June 2025. No cleiff unlocks, no VC wallets, no schedule dumps. Mission 70 is now live after passing the NNS vote in April 2026. It has already cut the staking rewards and the note provider rewards.

[00:10:18]So, it's already in effect and the cycle burn rate already demonstrated at the required target level during 2025.

[00:10:25]Caffeine AAI and cloud engines are positioned to drive that burn structurally higher through real compute demand. And once again, Hyperlid is a great project. It deserves its reputation. I personally used it. I bought ICP on Hyperlid. Had no problems whatsoever. The liquidity is great, but the market is pricing it at a $57.5 billion FDV. Well, 78% of the supply is still yet to come. ICP sits at a $1.4 billion circulating market cap. And the FDV is the same number with no future supply overhang, inflation being cut by 70% this year through live protocol changes, and a burn mechanic that the network has already demonstrated works.

[00:11:04]One of them is priced for perfection with the supply still coming. The other is priced as if the protocol hasn't already addressed the biggest criticisms when in fact it actually has. And even if you look at the charts, you have the option of buying hype right now when everybody on crypto Twitter is talking about it and hyping it up. And on the other hand, you have the best layer 1 project, the best blockchain out there that outclasses everything else as far as technology goes and as far as the tokconomics go that you can currently buy at the pico bottom when everybody's telling you that, you know, we're going to go lower and it's going to drop lower. You're buying a token that is clearly underpriced. So, I hope this episode about ICP's tokconomics was of use to you. If you learned anything or if you have any questions, leave them in the comment section below. Thanks for watching and I'll see you guys in the next