Decentralized exchange Hyperliquid has introduced an update that allows third parties to independently launch their own perpetual swap contracts on the platform.
According to the official Hyperliquid Discord channel, Hyperliquid Improvement Proposal 3 (HIP-3) goes into effect on Monday. This change introduces permissionless perpetual futures contracts for builders and represents a major step towards fully decentralized perpetual futures listings.
The implementation of HIP-3 on decentralized exchanges (DEXs) allows anyone who stakes 500,000 HYPE ($20.5 million at the time of writing) to deploy their own perpetual swap contracts with independent margins, order books, and parameters.
Deployers “can set up to a 50% fee share” in addition to base commission rates and are responsible for market definition, including oracle and contract specifications, as well as market operations such as oracle pricing, leverage limits, and settlement if necessary.
Perpetual swaps are futures derivative contracts that track the price of an underlying asset, but have no expiration date and allow traders to hold leveraged long or short positions indefinitely. Through a funding rate mechanism that periodically transfers payments between longs and shorts, prices are kept close to the spot market.
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Under construction for a long time
HIP-3’s minimum viable product implementation on the testnet has been live since late September, and a network upgrade will take place on Monday to enable it on the mainnet as well. Blockchain infrastructure company QuickNode said in an analysis that HIP-3 will make the market more responsive to the needs of builders.
“HIP-3 replaces gatekeepers with code, allowing teams to ship designs to market as quickly as possible while maintaining quality and user safety through on-chain rules and incentives.”
The proposal would eliminate listing fees found on centralized exchanges, reduce fixed costs by sharing infrastructure, and allow builders to recover costs through fee sharing.
“The quality of execution improves while transaction costs fall, resulting in increased inflows to the HIP-3 market and further subsidies to builders through fee income,” QuickNode said in its analysis.
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Hyperliquid turns into financial infrastructure
Blockchain data layer Chainsight also wrote in its analysis that HIP-3 disrupts the current model where only exchange operators can list assets. According to Chainsight, this will transform “Hyperliquid from a single exchange to a permissionless financial infrastructure.”
Chainsite expects this to lead to the creation of a new asset class in decentralized finance (DeFi), as “virtually any data feed can now become a tradable market.” This includes realized volatility, pre-IPO valuations of companies, and exotic derivatives such as traditional forex pairs, stock indices, and correlation swaps.
Synthetic market protocol Ventuals also plans to leverage HIP-3 to enable exposure to price movements in private companies. “Ventuals enables anyone to express their views on the trajectory of the companies they closely follow by creating perpetual futures (also known as Perps) tied to private company valuations,” the company said.
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