INIT Drops Nearly 60% From High as Hyperliquid Funding Turns Deeply Negative

Initia's INIT token fell 59.92% from its prior-day high of $0.279, trading near $0.112 on Hyperliquid, as 24 consecutive hourly funding settlements for its perpetual contract turned negative. The token was down 49.78% over the preceding 24 hours, according to the exchange's market data.

The two decline figures use different baselines, and the distinction matters. The 49.78% reading measures the drop over the rolling 24-hour window; the larger 59.92% figure compares the current contract price with the previous day's peak. Both point in the same direction, but neither is interchangeable with the other.

What does negative funding actually signal?

Negative funding means short holders pay long holders — the inverse of the usual arrangement in bullish markets. On Hyperliquid, INIT's perpetual contract recorded 24 straight hourly settlements in negative territory, totaling -7.70% cumulatively.

Eight of those hourly settlements reached -0.5% per hour. The latest reference rate stood at -0.117% per hour. Sustained at that pace, shorts would pay roughly 2.8% per day to hold their positions against longs — a cost structure that typically appears only when traders are willing to pay a premium to bet on further declines.

In plain terms: the derivatives market is pricing continued downside, and paying for the privilege.

How large is the market at stake?

The contract carried about $1.5 million in notional open interest — the value of positions still open — alongside $16.15 million in trading volume over 24 hours. Trading volume records activity across the full period, while open interest captures standing exposure at a point in time.

The gap between the two is instructive. Volume more than ten times open interest suggests heavy churn: positions opened and closed quickly rather than held. That pattern is consistent with a market in active repricing after a shock, not with measured accumulation.

What happened on the chain?

The funding stress did not emerge from a vacuum. Initia paused its layer-1 network on November 10 following a security incident.

The project stated that about $3.27 million in assets moved to an attacker address, and that roughly $2.16 million of that remained on the paused chain. Initia also said it planned to replenish reserves for affected assets.

That replenishment commitment deserves scrutiny. The project did not specify a timeline, a funding source, or whether full recovery is technically achievable for the assets still frozen on the halted network. A pause containing $2.16 million in attacker-controlled funds is a containment measure, not a recovery — the funds remain at risk for as long as the chain stays inactive and the attacker retains control of the destination address.

Nor did the project detail the nature of the incident itself: whether an exploit of a specific module, a key compromise, or another vector. Without that disclosure, assessing Initia's remediation claims is largely guesswork.

What comes next?

The market's verdict is already visible in the funding data. Twenty-four consecutive negative settlements represent a sustained structural bias rather than a single panic session, and the cumulative -7.70% figure shows shorts have been willing to absorb substantial carrying costs to maintain bearish exposure.

The immediate variables to watch are concrete. Whether Initia resumes its layer-1 network, whether the $2.16 million still on the paused chain is recovered or written off, and how the promised reserve replenishment is funded and sized will each shape whether the derivatives market's pessimism proves prescient or excessive. Until the chain restarts and the recovery plan gets specific numbers attached, the negative funding stands as the clearest available measure of confidence — and it is measuring very little.