as we continue to grow our hype treasury position. Net cash provided by financing activities was $11.0 million in Q2, primarily from our May public offering, versus $6.6 million in Q1. As of Q2, we hold $11.8 million in cash, cash equivalents, and stablecoins, versus $9.1 million as of Q1. As of August 10th, our common share count is approximately 15.5 million shares. looking ahead in our first earnings call under the new DeFi strategy in November 2025 along with our ambitious goal to create a new kind of operating company we set out ambitious financial goals which we continue to stand behind as we innovate and grow our businesses we originally gave guidance of four million to six million dollars of adjusted gross profit for 2026 and raised that guidance in May to $5 million to $7 million. In addition, we anticipate our adjusted net operating cash flow to flip positive by the end of the year, and that's what we have been communicating since day one. We continue to be confident in achieving that guidance based on our delivery of consistent quarterly performance, including growing businesses, declining costs, and improving cash flows. We believe we have the right team, partners, and resources and the right chosen blockchain in Hyperliquid to achieve these goals. Every day, we remain squarely focused on continued execution, driving value for shareholders over time while helping to build Hyperliquid into the blockchain to house all of finance. As Huntu said earlier, our model is no longer a concept that we ask investors to envision. It has become a reality that stands alone among public companies. We believe the results will continue to speak for themselves. With that, we look forward to answering your questions.
Operator
We will now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. Confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions.
Our first question is from Gareth Cassetta with Antor.
Operator
Please proceed with your question.
Hey, guys. Thanks for taking the question. You were very quick to kind of reallocate your host deployments to skew in entropy. So, I was wondering if you could talk about how much of a ramp you're expecting from those new deployments in the back half of this year, and if any of that might be baked into guidance. And then also how we should think about the pipeline going forward, if you guys have any additional hype kind of sitting idle to do more deployments or if you'd have to kind of find a new allocation for that.
Hey, Gareth, thanks for the questions. So I would say that one of our core functions is to continuously have conversations with teams that are either directly building on or looking to come to build on hyperliquid. And a large part of our ability to pivot so quickly was maintaining those relationships and ensuring that our diligence was robust to ensure that these were the right products to launch through our deployment product house. We expect them to ramp relatively quickly with SKU. Their institutional listing service that we're calling Partner Markets is designed to onboard more bespoke products that are not yet listed on Hyperliquid and have them trading relatively quickly and that's obviously contingent upon the roadmap for permissionless HIP4 and then with entropy HIP3 is already live and we expect that that the team to start very very quickly we have actually staked the 500,000 hype today and we'll be working on getting the deployment deployer set up in terms of the longer term roadmap for this year we want to see these teams scale their revenues and obviously directly contributing to Hyperion and we'll continue to have conversations either through our listing service or bespoke deployments for individual permissionless markets.
Great. Thank you. And then just a quick one on your validator business. I'm wondering if you could provide how much of the 11.1k total hype you guys earned was from the validator business. And did you guys see any uplift from the early days of the integration with BlockDamon? And how are you thinking about potential future integrations?
Thanks so much for the question, Gareth. In terms of the commissions earned from validating in isolation, it was about 500 tokens from validating, meaning the majority of our tokens earned in Hype were from our own native staking. The partnership with Block Game, while announced, is expected to ramp throughout the quarter and into next and I think that the the platform that we have set up we believe to be a world-class for a number of reasons right kinetic is the number one liquid staking protocol on hyperliquid which means that it's functionally attractive for for multiple reasons and the partner that we have on the infrastructure side peer two who is purchased by maven owned by bitmine uh one of the largest players in validating across multiple blockchains and a very very large player among institutions and essentially what happens and this is what happened block damon you know like every other financial service product institutions really care about who they're working with why they are working with them they care about the track record the compliance the reporting uh of course economics and overall reliability and dependability And blockchain is just the first institutional partnership that we have, and we are expecting others to follow. And it's part of the broader trend on hyperliquid more broadly, where, of course, it's achieved such a large market share of overall crypto activity and financial activity, but so much is still not yet accomplished of institutional adoption. And when that shifts, even more balances will flow, even more institutions and other participants will be active. We think and we believe, and quote to our thesis, is that they will want to be active with world-class institutions such as ourselves.
Awesome. Thanks for the call, guys. A good quarter. Thank you, Garrett.
Operator
Our next question is from Brian V10 with Cybert. Please proceed with your question.
All right. Thanks, guys. A nice job at the summit in July. I was able to catch it online. Sorry, I missed it. But, you know, in the past, you guys spoke to HIP4, you know, it's kind of a potentially larger opportunity than HIP3. Is that still how you guys see it?
Hey, Brian. Great to hear from you. Yeah, absolutely. We think that the trend – I mean, there's obviously so much that's going on right now, both in the political sphere and the financial sphere, with regards to prediction markets, perpetuals, and the changing nature of financial systems moving on-chain. But net-net, we think that there are so many ways to not only directionally express beliefs through markets, and prediction markets or outcome markets captures that the best. And the advantage with Hyperliquid as a unified settlement layer for all financial services or systems is the fact that you will be able to not only access spot, but perpetual and outcome markets all in that same settlement layer. And our belief from the Hyperion perspective is that we can not only support perps, which we have already, but also find teams on the outcome market side as HFB4 moves to permissionless and basically establish infrastructure that enables all of these to functionally grow as a result of volume generally increasing. The other trend that we're seeing is the tokenization of real-world assets, and that continuously drives more utilization, not only to the hyper-core platform, but also to hyper-EVM. And that means that you have many verticals that are using these financial primitives to not only satisfy the use of DeFi, in addition to having that collateral, to utilize it for outcome markets. And so net-net, we think that we're just beginning to scratch the surface of what's possible when you have infrastructure like hyperliquid.
That's great. And we'll see some elections or something like that later in the year. But just two other quick ones, hopefully. So great to hear the quick pickup from winding down the Felix relationship. And I guess, could you guys contextualize the pipeline a little bit more? It seems like the longer the better, the more volume and activity, the better. And so long as the pipeline is there, it's a relatively costless, painless switch. That's the beauty of the tokens themselves. But I guess how sticky are these folks? How long might someone be in the pipeline ready to go before maybe they go try and find another avenue? Do you guys have a couple months or some amount of timeline to be able to find a way to work together? Does that make sense?
So it varies by each deployer. We take our diligence process very seriously. And I would say that both SKU and Entropy have been well capitalized. They've been participants in the markets for a long time, and we looked at their methodology both for perps and outcome markets and felt very confident in their ability to create products that traders want to trade, both at the retail and institutional level. When it comes to deal structures, I would say the base minimum requirement at the hyperliquid platform level is six months, but we do design longer-term deal structures and, again, have revenue share and equity exposure to our partners. So if they're able to generate substantial revenues and use it to allocate to their own hype stake, then that's perfectly fine. We still have exposure to their long-term success. But realistically, for teams that are building new infrastructure, they should be allocating that capital towards the growth of their own product and distribution. And so that's why we feel very confident in our ability to not only position Hyperion as the bonded capital layer for these deployers, But with products like partner markets with institutional listing services, we can scale both horizontally and vertically. So that's how we think about long-term deployments of Hype. And again, our unique offering in this market is that we're not just a Hype holder and provider, but we've also built primitives across the Hyper EVM and have services like the Hype ASAE service for fee reductions to offer to traders. So we offer this cohesive partnership-based product that is what enables us to not only engage with, but work long-term with the best builders in the ecosystem.
Okay, that's great. That kind of answers this next one, but just quick housekeeping. I think you guys might have hit on it, but how much of the token holdings are ready to rock as far as deploying to new strategies? And then can you just talk about the balance between, hey, let's get out there and track down more tokens to marry them with all the folks in the pipeline versus, hey, It's more about getting the right partnerships, sort of, I guess, quality versus quantity. Like, just talk about the balance a little bit.
Sure. So I guess it should be relatively clear, right? We faced the headwind, unexpected event with USDA Sunset, and within a month we were able to deploy more hype than we had actually had to undelegate and have built better economic structures. So there is a lot of flexibility that we have, and it's the same thing that attributes to our increasing cost efficiency in terms of our operating structure. We are able to use these digital assets most optimally and are able to find the best deal structures that enable long-term growth. So when it comes to, again, going to market, most of these times the teams are coming to us, and we have a lot of privilege to be able to identify the best teams and work with them closely to support the growth of the hyperliquid ecosystem, but also generate and establish long-term revenue opportunities. So it's about maintaining the flexibility around the asset, and then obviously it's critical for us to be able to continue to accumulate and redeploy hype and optimize the yield that's possible in the ecosystem.
That's great. Are you guys going to leave the charge there?
So I had to ask, but thanks again, guys.
Operator
Once again, if you would like to ask a question, please press star 1 on your telephone keypad. Our next question is from Jim McCleary with Chardon Capital Markets, LLC. Please proceed with your question.
Yeah, thanks a lot. Good evening, guys.
I'd like to figure out how you get to the adjusted gross profit guidance. You did two in the first half, so you need three, four in the second half, and it's a pretty big jump from from q1 the um staking is it looks like it's really driven by the price of the token more than anything else um so you know that the delta's got to come from something else and i'm assuming that it's deep by monetization is is that is that true and then secondly it sounds like it's really going to be more fourth quarter loaded than than third quarter loaded.
Thanks so much, Jim, for the question. I think when you consider that we had two major partnerships wind down in the second quarter, both impacting DeFi monetization, yes, it's certainly logical to extrapolate that. That is where we will have the most recovery and growth following through, both from the partnerships that we've announced and potentially future activity through the remainder of the year. So, DeFi monetization should be a large source of growth. Ecosystem reward, to the extent that there are airdrops or other awarded tokens and equity positions, could contribute quite a bit. Your point on staking is correct. That is fairly linear to the number of tokens that we have and the price of hype. I think that, you know sitting here today we certainly continue to feel very very confident in the guidance that we have um i think that you know we expect to continue to grow every single quarter uh there's there's reasons why there could be variability uh but we expect q3 to be strong uh and q4 to potentially be stronger but there's a lot of reasons why q3 might end up stronger than q4 and vice versa. As you can imagine, as part of our broader triple-dip strategy of owning tokens and sharing the upside in businesses and sharing the upside in the equity of the various protocols and companies that we support, it supports a long-term way of operating. And that is how we aim to position ourselves for the benefit of shareholders. So quarter-to-quarter numbers are going to continue to be volatile. It's the nature of the way that we operate and it's the nature of the broader digital assets in crypto space. But I think that how you've described it is a fair overall sense for where things could land.
Great. And just two more I'll ask them at the same time. So one is, is the kinetic staking yield, is that reported in ecosystem rewards? And then secondly, with the sale of the legacy healthcare to Arctic Vision, do you get any significant reduction in operating expenses from the Q2 levels?
Great question. The additional staking on Kinetic, where we have our KNTQ staked into SKMTQ and are continuing to earn yield, we view that as defined monetization. As I mentioned earlier on the call, we've accumulated about 40,000 tokens while these tokens continue to be a liquid stake. So that is where that is and will continue to be. In terms of the sale to Arctic Vision, Q2, obviously, we saw a substantial decline in our costs from $3.0 million to $2.3 million. However, that doesn't reflect a full quarter of the legacy segments of being run off. So we would anticipate even further declines, Q3 versus Q2, to have a full quarter of lower personnel costs, patent IP maintenance, and things of that nature.
Can you just frame that in terms of how big that decline might be? Maybe a range?
Sure. I think that an incremental reduction of anywhere between 10% to 20% versus the run rate of the core expenses, excluding stock-based compensation, I think would be a good measurement of success for us. And again, keeping that in context, the first quarter that we started Q3 last year, it was $4.3 million Q3 2025. So we've already reduced to close to half and getting under half of where we started of overall run rate cash would be a great success. And then going to an earlier question, you know, we can do all of these activities with a fairly low enduring cost base. It's infrastructure that we've built. It is legal frameworks that we have developed that we've obviously cleared through all of our reporting infrastructure and governance procedures. And this kind of growth can happen only because of scalable blockchain technologies, and, in particular, the blockchain that we've chosen, which is Hyperliquid. So, yes, you should continue to see declining costs as we saw this quarter, quarter of the quarter, and continue to see further optimization from here as we're laser-focused on how we scale.
Got it. Thanks a lot. Well done, guys.
Operator
If there are no more questions, we will now turn the call back over to Hunsu Jung for closing remarks.
Our second quarter was defined by two things, resilience and expansion, supported by sound operating processes and flexible pioneering partners. When the ecosystem shifted, we adapted within weeks and came out with stronger economics and better infrastructure than we had before. That is a core mandate as a true operating company, and today's results reflect it. But what excites us most is what's to come. Hyperliquid crossed $1 billion in cumulative revenue this quarter and opened an entirely new frontier in outcome markets, one where existing perpetual infrastructure operates in a unified financial system and where Hyperion is positioned at forefront. From validator operations and the Hype asset use service, to institutional volatility and credit products on the HyperEVM, to the next generation of markets on HyperCore, the foundations we spent the past year laying are becoming the infrastructure this ecosystem runs on. Each business line feeds the flywheel. Revenue tied to utilization, rising value across our partner protocols, and more hype bought back and burned. As that flywheel accelerates, so does the global adoption of Hyperliquid, bringing new users, new products, and new capital to the ecosystem we serve. While a passive treasury experiences Hyperliquid's evolution as price volatility, Hyperion experiences as a pipeline. That is the difference we set out to build, and our objective is to keep proving that each quarter to come. And again, as large shareholders ourselves, our goals have been and always will be directly aligned with yours. We only win if you win. Every decision we make, every partnership, every deployment, every dollar of capital is optimized for that outcome. To our investors and partners, thank you for your continued support as we build the premier institutional gateway to Hyperliquid.
Thank you. This concludes today's teleconference. You may now disconnect.
