Hyperliquid HIP-3 Proposal Analysis: The Open Perpetual Market May Reshape the Decentralized Finance Landscape

The latest HIP-3 improvement proposal launched by Hyperliquid has garnered widespread attention in the Decentralized Finance space. This is not just a simple protocol upgrade, but marks a key step in Hyperliquid's development blueprint, which could have profound implications for the future of on-chain derivatives trading.

To fully understand the importance of HIP-3, we need to start with the overall design concept of Hyperliquid, which involves its three core proposals (HIPs).

The three core proposals of Hyperliquid

Hyperliquid has built a layered and fully functional financial ecosystem through three key improvement proposals.

HIP-1: Lowering the threshold for listing coins

The token listing process on traditional centralized exchanges is opaque and costly, often accompanied by harsh terms. HIP-1 allows anyone to create new tokens on Hyperliquid without permission, similar to the ERC-20 standard. Project teams only need to pay a certain fee to create their own tokens and automatically open a spot market, significantly lowering the threshold for assets to enter the public market.

HIP-2: Automated Market Making

The new token faces the "liquidity cold start" challenge after its launch. HIP-2(, also known as "Hyperliquidity"), is Hyperliquid's native automated liquidity strategy. After the new token is created through HIP-1, HIP-2 acts as a market-making robot, automatically placing buy and sell orders on the order book to provide basic tradable liquidity for the new market.

HIP-3: Open Perpetual Market Creation Rights

Perpetual contracts are the largest area of trading volume in the crypto market. HIP-3(, also known as "Builder-Deployed Perpetuals"), completely opens up the creation rights of the perpetual contract market. Any "builder" can deploy custom perpetual contracts on Hyperliquid as long as they stake a sufficient amount of HYPE tokens.

Builders have complete control over the markets they deploy, allowing them to independently define key parameters, including selecting collateral, price oracles, leverage limits, and margin parameters. At the same time, builders can also share the trading fees of the market, earning substantial profits.

After completing these three steps, Hyperliquid has transformed from a DEX solely aimed at end users to a "financial infrastructure layer," surpassing other DEX competitors in narrative and deriving a new business ecosystem and gameplay.

The potential impact of HIP-3

1. In line with physical assets ( RWA ) craze

HIP-3 has set a high-threshold access mechanism, attracting capital-rich institutional players. These institutions are likely to focus on markets with huge and stable trading volumes in traditional finance, such as major stock indices, commodities, foreign exchange, and other RWAs. Taking S&P 500 index futures as an example, even capturing a tiny share of the traditional market can bring considerable returns to the builders.

2. Foster a new token ecosystem

The community may develop new DeFi protocols to address the high barriers and initial liquidity issues of HIP-3. This could trigger a "liquidity war" around the HYPE token, similar to the early "Curve wars". This will expand the application scenarios and market demand for HYPE, providing strong support for its token price.

3. Meet the trading needs of unlisted company stocks ( Pre-IPO )

Hyperliquid's Hyperps feature, combined with HIP-3, provides futures trading for assets that are not yet listed or lack reliable price sources. This not only meets the investment needs of retail investors for popular private placement stocks but also offers important price discovery functionality for these companies before they go public.

4. Responding to the competition from centralized exchanges

Compared to the prudence and slowness of traditional centralized exchanges, Hyperliquid enhances its response speed to market demand through HIP-3. This agility is a key advantage in its competition against compliant exchanges.

Overall, HIP-3 represents an important step for Hyperliquid towards becoming a financial infrastructure that connects real-world assets, innovative ecosystems, and agile market responses. Although there are still many challenges ahead, such as liquidity management and regulatory compliance, HIP-3 undoubtedly paints a picture of a more open, composable, and imaginative on-chain financial future.