What is Hyperliquid Improvement Proposal 3 (HIP-3)?

Hyperliquid Improvement Proposal 3, or HIP-3, is the network’s “builder-deployed perpetuals” framework. It lets qualified builders launch independent perpetual futures DEXs on Hyperliquid’s HyperCore infrastructure, rather than waiting for a centralized team to approve every new perp market.

In practical terms, HIP-3 turns Hyperliquid from a single perp exchange into a permissionless market-creation layer. A deployer that meets the staking requirement can create one perp DEX with its own margining, order books, collateral choice, market parameters, and deployer settings.

The mainnet staking requirement listed in Hyperliquid’s docs is 500,000 HYPE, with the first three assets in a perp DEX not requiring auction participation. Additional assets are introduced through a Dutch auction process shared across HIP-3 perp DEXs.

HIP-3 matters because it expands what can be traded as perpetual futures. Builders can design markets around crypto assets, commodities, equities, indices, or more niche assets, provided the market can be supported safely with suitable collateral, oracle design, liquidity, and risk controls.

How Does HIP-3 on Hyperliquid Work?

HIP-3 works by separating market deployment from core exchange infrastructure. Builders configure and operate perp DEXs, while Hyperliquid’s HyperCore handles execution, settlement, margining, liquidations, and order-book mechanics.

1. Builder Deployment Layer

The builder layer defines who can launch markets, what they control, and how each HIP-3 perp DEX is configured before traders interact with it.

Key builder-side components include:

• Stake: Deployers must stake 500,000 HYPE on mainnet to launch one HIP-3 perp DEX and maintain that requirement after market activity ends.
• Perp Dex: Each deployment creates a separate perp DEX with independent margining, order books, deployer settings, and operational responsibilities.
• Market Slots: The first three assets can be deployed directly, while additional assets require participation in a shared Dutch auction process.
• Collateral: Builders choose the quote collateral for their DEX, but collateral eligibility depends on permissionless quote-asset status and validator governance.
• Oracles: Deployers define oracle inputs, making reliable pricing essential for funding, liquidations, mark prices, and overall market safety.
• Parameters: Builders manage contract specifications, fees, caps, oracle settings, and market rules that shape trader experience and risk exposure.
• Operations: After launch, deployers must actively monitor markets, adjust configurations, and manage risks rather than simply listing assets once.

2. HyperCore Execution Layer

The execution layer provides the shared infrastructure that lets HIP-3 markets trade like native Hyperliquid perps while preserving consistent settlement and liquidation mechanics.

Core protocol-side functions include:

• Matching: HyperCore processes trades through its onchain order-book infrastructure, so HIP-3 markets inherit Hyperliquid’s native execution environment.
• Margining: HIP-3 markets currently use isolated margin, meaning trader collateral and risk are contained within specific market positions.
• Liquidations: The protocol executes liquidations according to market parameters, helping reduce bad debt when trader equity falls below maintenance requirements.
• Settlement: Positions settle through Hyperliquid’s core infrastructure, keeping accounting unified even when markets are created by independent deployers.
• Funding: Perpetual funding mechanisms help anchor contract prices to oracle-driven spot references and balance long-short demand over time.
• Fees: Deployers can earn trading fees, while protocol-side fee settings may vary depending on HIP-3 configuration and growth-mode treatment.
• Safeguards: HIP-3 includes risk controls such as open interest caps and validator-linked protections to limit damage from faulty or malicious markets.

HIP-3 Slashing Explained

HIP-3 slashing is the penalty mechanism behind builder-deployed perpetual markets. To launch a HIP-3 perp DEX, deployers must maintain 500,000 staked HYPE, which validators can slash through a stake-weighted vote if the deployer operates markets maliciously or endangers protocol correctness.

Importantly, the stake remains slashable even after a deployer unstakes and enters the seven-day withdrawal queue. Hyperliquid frames slashing as a last-resort safeguard for issues affecting correctness, uptime, or performance, not as a routine punishment for ordinary market losses.

How to Use HIP-3 Markets

Users can access HIP-3 markets through compatible frontends, wallets, or trading platforms that integrate Hyperliquid infrastructure. Trading feels similar to native perps, but market quality, oracle design, fees, and deployer settings require extra review.

1. For Traders

Traders use HIP-3 markets by finding supported pairs, checking risk details, depositing collateral, and placing perp orders through an interface that exposes builder-deployed markets.

Before opening a position, review these steps:

1. Open App: Go to the Hyperliquid app and connect your wallet, just as you would when trading standard Hyperliquid perpetual markets.
2. Find Market: Search for the HIP-3 perp market you want to trade and confirm it is available inside the Hyperliquid trading interface.
3. Check Deployer: Review the market details, because HIP-3 markets are created by builders that define oracle sources, leverage limits, and contract specifications.
4. Review Collateral: Confirm the margin and collateral requirements before trading, since HIP-3 markets may differ from standard Hyperliquid perp pairs.
5. Assess Liquidity: Check spread, order book depth, open interest, and recent activity to avoid thin markets with poor execution.
6. Place Trade: Enter the trade through the Hyperliquid app, then monitor funding, liquidation price, oracle behavior, and position risk.

2. For Builders

Builders create HIP-3 markets through Hyperliquid’s developer infrastructure, not by clicking a simple “list market” button in the main trading app. They should start with the official HIP-3 docs, use the deployer API, and prepare the frontend, oracle, liquidity, and risk controls before launch.

A typical builder workflow includes:

1. Read Docs: Start with Hyperliquid’s HIP-3 documentation and deployer API page to understand required L1 actions, market responsibilities, oracle duties, settlement rules, and operating requirements.
2. Prepare Wallet: Use a wallet or account setup that can interact with Hyperliquid L1 actions, hold the required HYPE stake, and sign deployer transactions.
3. Stake HYPE: Stake the required HYPE to qualify as a HIP-3 deployer, knowing the stake remains slashable if the market is operated maliciously or incorrectly.
4. Use API: Deploy and operate the perp DEX through Hyperliquid’s HIP-3 deployer actions API, which is the practical entry point for creating builder-deployed perpetual DEXs.
5. Create DEX: Set up the dedicated perp DEX with its own market configuration, margining environment, order books, and deployer-controlled parameters on HyperCore.
6. Add Markets: Choose the first assets carefully, then use the shared Dutch auction process when adding markets beyond the initial free deployment slots.
7. Build Frontend: Create or integrate a trading frontend so users can discover the HIP-3 market, connect wallets, deposit collateral, and trade through a clear interface.
8. Run Operations: Maintain oracle updates, liquidity, leverage limits, open interest caps, settlements, and risk monitoring, because the deployer remains responsible after launch.

Types of Hyperliquid HIP-3 Markets

HIP-3 focuses on builder-deployed perpetual futures markets, not prediction markets. Builders can create perp markets around different underlying assets, provided they support reliable pricing, liquidity, collateral design, and risk controls.

Common HIP-3 market categories include:

• Crypto Assets: Builders can list perpetual futures for long-tail tokens, emerging sectors, or assets that may not yet be available as native Hyperliquid markets.
• Tokenized Equities: HIP-3 can support perp markets that track equity-like assets, with TradeXYZ serving as one example of a HIP-3 DEX offering stock-related markets on Hyperliquid. 
• Indices: Builders may create perpetual markets tied to broader baskets, such as crypto sector indices, equity indices, or custom benchmark products.
• Commodities: HIP-3 markets can track assets such as gold, silver, oil, or other commodities, assuming the deployer uses reliable oracle pricing.
• FX Markets: Foreign exchange perp markets can offer exposure to currency pairs, although these require strong liquidity and accurate price feeds.
• Custom Perp Markets: Builders can design specialized perpetual futures around niche assets or synthetic exposures, as long as the market remains structured as a perp rather than an outcome contract.

HIP-3 Impact on Hyperliquid's HYPE Token

HIP-3 launched on mainnet on October 13, 2025, giving HYPE a clear event date for performance tracking. Around that launch, reports placed HYPE near $42.13, up more than 13% over 24 hours, as traders priced in permissionless market creation.

The post-launch move was not straight upward. HYPE later dropped sharply into early 2026, with Yahoo Finance historical data showing January 2026 prices in the mid-$20s and other market trackers marking the cycle low near $21. From roughly $42, that implies an approximate 50% drawdown.

By May 21, 2026, HYPE had recovered to new highs, with CoinGecko listing an all-time high of $62.18 and current prices slightly below that level. Compared with the roughly $42.13 HIP-3 launch price, that represents about a 47% gain since launch.

Hyperliquid HIP-3 vs HIP-2 vs HIP-1

HIP-1, HIP-2, and HIP-3 expand different parts of Hyperliquid’s market stack. HIP-1 introduced the native token standard and onchain spot order books, HIP-2 added automated liquidity for spot assets, and HIP-3 extended permissionless deployment to perpetual futures markets.

HIP-1 is mainly about creating fungible tokens directly on Hyperliquid. It defines capped-supply assets and lets those tokens trade through onchain spot order books. In simple terms, HIP-1 handles token issuance and spot trading, not perpetual futures or builder-run perp DEXs.

HIP-2 builds on HIP-1 by introducing Hyperliquidity, a mechanism for automatically providing liquidity to HIP-1 spot assets. Rather than focusing on new token creation, HIP-2 improves how those spot markets trade by supporting deeper, more reliable liquidity around deployed assets.

HIP-3 is the perp-market counterpart: it lets builders deploy perpetual markets, define oracles and contract specifications, operate markets, set leverage limits, and settle markets when needed. Compared with HIP-1 and HIP-2, HIP-3 is about decentralizing perp listings rather than launching or liquidifying spot tokens.

Risks of Hyperliquid HIP-3

HIP-3 expands Hyperliquid’s market creation, but it also shifts more responsibility to deployers and traders. The main risks come from builder-controlled oracles, market parameters, liquidity quality, collateral design, frontend trust, and slashing enforcement.

Key HIP-3 risks include:

• Oracle Risk: HIP-3 deployers are responsible for oracle definition and price setting, so inaccurate, delayed, or manipulated prices can affect liquidations, funding, and mark-price behavior.
• Liquidity Risk: Builders may need to provide or attract their own liquidity, which can leave new markets with wider spreads, thinner books, and worse execution than established pairs.
• Deployer Risk: A poorly run deployer can misconfigure market parameters, set unsafe leverage limits, fail to settle markets properly, or operate infrastructure unreliably.
• Slashing Risk: Deployers stake HYPE and can be slashed through validator action, but slashing is a backstop rather than a guarantee that users avoid losses.
• Collateral Risk: HIP-3 markets may use different quote assets or collateral setups, making collateral quality, liquidity, redemption assumptions, and margin behavior important to review.
• Frontend Risk: Users may access HIP-3 markets through apps or integrations that vary in transparency, security, and accuracy, even when the underlying market runs on Hyperliquid.
• Market Design Risk: Exotic assets, low-liquidity instruments, or complex synthetic markets may be difficult to price, hedge, or liquidate safely during fast market moves.
• Fee Risk: HIP-3 markets can have deployer-specific fees, so traders should compare costs before entering positions, especially in short-term or high-frequency strategies.
• Regulatory Risk: Perps on equities, commodities, FX, or other real-world assets may create additional legal or jurisdictional uncertainty for builders, interfaces, and users.

Final Thoughts

HIP-3 is one of Hyperliquid’s most important upgrades because it pushes perp listings from a curated model toward permissionless market creation. Since its October 13, 2025 launch, builders can deploy new perp markets once ready.

For users, the simplest approach is still to trade supported HIP-3 markets through the Hyperliquid app, while checking liquidity, collateral, oracle quality, and deployer credibility before entering positions. Permissionless listings expand choice, but also increase diligence requirements.

For Hyperliquid, HIP-3 turns HYPE into more than a governance or ecosystem asset by tying it directly to market deployment through staking. If adoption continues, HIP-3 could strengthen Hyperliquid’s role as an open, multi-asset perp protocol.

With HIP-4 now live as well, Hyperliquid’s roadmap extends beyond perpetuals into outcome markets. HIP-3 opens builder-deployed perp listings, while HIP-4 adds fully collateralized contracts that settle within fixed ranges, creating a separate path for prediction-style and bounded options-like markets.