Arca CIO Jeff Dorman Names Hyperliquid First Project With L1, DEX and Stablecoin Fees

Three Fee Streams, One Valuation Test

An L1 token, on its own, is not worth much. Jeff Dorman, chief investment officer at digital asset investment manager Arca, built a valuation call on that premise: Hyperliquid (HYPE) is, in his view, the first crypto project to hold all three of what he described as crypto’s “three crowns,” running its own layer-1 blockchain while collecting decentralized exchange fee income and stablecoin fee income. The remarks appeared in an interview published on Friday, 2026-11-06, at 11:58 a.m. Korea time, or 02:58 UTC.

The argument runs ahead of the label. Dorman said the value of an L1 token by itself is limited and that a project has to earn DEX fees and stablecoin fees before its token is worth holding. He put chain operation and fee revenue together as the standard a project should be measured against, a frame that moves crypto valuation away from token supply schedules and toward something closer to an income statement. It is a first-of-its-kind framing rather than a league table; Dorman attached no size ranking to the claim.

Each of the three streams behaves differently. Blockspace on the project's own layer 1 produces fees only when the chain is actually used. Exchange fees accrue when traders route orders through the venue, and the trader's realized cost has two parts, the published fee and the slippage accepted at execution. Stablecoin income arrives when the project earns on its own dollar token's issuance and circulation. On venues where derivatives volume dominates, the same activity that fills the fee line also drives the funding rate, the periodic payment exchanged between long and short positions, so exchange income tracks live positioning rather than idle balances. In practice one stream does the heavy lifting: protocol income data over the trailing seven days shows trading fees made up 90% of Hyperliquid's revenue.

Two things make the assessment more than a compliment. The first is precedent. Most crypto projects hold one of the three positions Dorman described and stop there: a layer 1 with a native token and little fee income, an exchange whose venue generates fees but runs on someone else's chain, or a stablecoin issuer with revenue and no blockchain of its own. Hyperliquid, in Dorman's telling, is the first to stack all three, which means a single token now sits on top of three separate fee engines.

The second is concentration. The 90% share of trailing seven-day revenue taken by trading fees cuts both ways. It confirms the exchange business is real and paying, and it shows the other two streams are early: if nine of every ten dollars of income comes from trading, the layer 1 and the stablecoin are not yet carrying comparable weight. Dorman's benchmark, chain operation plus fee revenue judged together, implicitly requires all three lines to mature before the thesis is fully paid.

The market impact runs through how investors rank layer-1 assets. Under a supply-schedule lens, an L1 token is a claim on adoption, and adoption is easy to narrate. Under Dorman's lens, it is a claim on fees, and fees either exist on the tape or they do not. Sentiment gauges such as the Crypto Fear and Greed Index move with speculative appetite; fee revenue is the part that survives a bear market. That distinction gives income-based allocators a screen they have mostly lacked for L1 assets, and it explains why he rejected the idea that an L1 token holds much value by itself. Whether the screen flatters or punishes any given chain depends on the fee mix underneath it, a question the framework leaves to the data rather than to the narrative.

Where the Screen Meets Sui

The framework is portable, and that is where Sui enters the picture. A screen built on fee income gets run across every layer 1 with a venue or a stablecoin on top, and our Sui coverage tracks that question for this ecosystem. Sector data already frames the difficulty: OAK Research found stablecoin issuer revenue beat chain fees 7.4 to 1 in the third quarter, meaning the stream Dorman weighs most is one most chains do not collect. SUI Group, the treasury vehicle holding 109.1 million SUI, is set to report Q3 results with that fee picture in the background. The shift is not isolated: Franklin Templeton's Perkins says investors now weigh activity and revenue. The thesis's exposed flank is the one its own number shows: with trading fees at 90% of the trailing week's revenue, the two streams that justify the other crowns still have to scale.