Valantis acquires stHYPE as Hyperliquid liquid staking competition intensifies

Valantis Labs, a decentralised exchange platform, has acquired Staked Hype, a liquid staking protocol on Hyperliquid, with more than $181 million in investor funds, for an undisclosed sum.

Staked Hype allows users to lock up their Hyperliquid tokens in exchange for stHYPE, one of the major liquid staking tokens in the $2.7 billion Hyperliquid DeFi market. Kinetiq’s kHYPE, with about $1.3 billion in investor funds, is Staked Hype’s biggest competitor.

The deal carries extra weight within Hyperliquid’s $1.5 billion liquid staking market. That’s because Valantis operates one of the largest decentralised exchanges for liquid-staked Hyperliquid assets, hosting liquidity pools for both stHYPE and kHYPE.

By acquiring Staked Hype, Valantis becomes the stHYPE token issuer while still operating a major liquidity pool for its rivals’ liquid-staked tokens.

But Valantis CEO Deven Matthews said the move won’t cause market distortion.

“Hyperliquid will benefit heavily from greater competition in the [liquid staking token] space,” Matthews told DL News. “Having different options available will be valuable for the end user and the Hyperliquid ecosystem.”

Matthews also said rivals can use features like discounts on transaction fees, emission rewards for staking, and other token design quirks to carve out their own niche.

The deal marks a growing wave of acquisitions across the crypto industry this year, with bigger firms like Stripe and Ripple buying smaller projects.

Lost dominance

The timing of the move is notable.

Staked HYPE has lost its liquid staking dominance on Hyperliquid to the much newer kHYPE token. Once a $500 million liquid staking token, it now trails the market leader by over $1 billion in locked investor funds.

Matthews said Valantis will “address the most common pain points around stHYPE first,” by improving liquidity and introducing new yield sources for investors.

“Liquidity is the single most important factor in an asset’s success,” Matthews said. “[Staked Hype] can have a long-term technical edge as an LST with Valantis.”

The move also comes amid Hyperliquid’s meteoric rise this year as one of the hottest crypto projects.

Still, Hyperliquid’s liquid staking market is a fraction of the broader DeFi liquid staking sector that has crossed $77 billion in locked investor funds.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com*.*

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