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Following
HYPE Kinetiq, operator of Hyperliquid's largest liquidity pledge product, announced the launch of Elysium, a new two-layer network built for Hyperliquid, with HYPE as its fuel token. Half of Elysium sorter fee revenue will be used to repurchase Kinetiq's native token KNTQ on the open market and destroy it all.
The announcement comes as Kinetiq's kHYPE pledged tokens are said to have dropped from approximately 10% of all pledged HYPE a year ago to less than 5% currently, although its total locked position value continues to climb.
As the agreement behind kHYPE (Hyperliquid's largest liquidity pledge token), Kinetiq announced on August 24 that it is building Elysium, a new two-layer network designed for Hyperliquid that aims to accelerate spot trading, token issuance and automated market-making. Elysium will use HYPE directly as its fuel token rather than introducing new assets. Kinetiq said it will connect directly to Hyperliquid's native order book HyperCore to achieve faster block times than existing HyperEVM environments. At the same time, the broader ecosystem is also promoting developments such as the online launch of Hyperliquid HIP-4 testing.
Kinetiq has not yet set a mainline launch date, published technical specifications, designated infrastructure partners, or disclosed audit reports. The company said the details would be released "soon." "HyperEVM introduces complexities that confuse even the best developers and veteran traders in order to be compatible with HyperCore," Kinetiq wrote, adding that during peak activity periods, a simple redemption on HyperEVM costs as much as $20.
Why Kinetiq built a second revenue line
Elysium's fee design reveals that its motivation goes beyond solving HyperEVM's congestion problems. For every dollar charged by the Elysium Sorter, 50 cents will be used to purchase KNTQ on the open market and destroy it, 25 cents will go to the app that generated the activity, and 25 cents will go to Kinetiq's treasury. This mechanism links the value of KNTQ to the volume of users 'transactions on Elysium, which is completely independent of the amount of HYPEs pledged through Kinetiq.
This distinction is crucial because Kinetiq's core pledge business appears weak amid the impressive aggregate data. According to DefiLlama data, the total locked value of Kinetiq has climbed to approximately $1.26 billion, an increase of more than one-third in the past month. The total locked value of Kinetiq
However, kHYPE's share of all pledged HYPEs on the Internet is said to have dropped from approximately 10.4% a year ago to approximately 4.4% currently, and the supply of kHYPE has decreased significantly since August last year. An agreement that continues to shrink market share of pledged products (although its dollar-denominated TVL rises as HYPE prices rise) naturally has the incentive to open up a fee stream linked to transaction volume, especially in the context of broader activities such as the closure of the Ventuals HIP-3 market.
KNTQ rose after Elysium announcement, HYPE remained stable
KNTQ allegedly soared 30% in the hours after the announcement. Some gains have since been retracted: As of August 25, KNTQ was trading at $0.2289, up 9.94% in the past 24 hours. HYPE itself responded flatly. The token fell to a high of more than US$70 overnight, and then recovered to about US$80 the next afternoon, showing a round-trip move rather than a sustained trend. As of 11:51 UTC on August 25, HYPE was trading at US$80.22, up 0.43% in 24 hours.
Elysium's launch time and the basis for its performance claims remain key factors, especially in the absence of independent benchmarks. Whether Elysium can become KNTQ's true second revenue engine, rather than just causing price surges on announcement day, depends on whether Kinetiq can provide clear information on these aspects and whether kHYPE's pledge share continues to decline after that.
