What is Hyperliquid's HIP-3? How it works and use cases

What is HIP-3?

Overview and Mechanism

HIP-3, or Hyperliquid Improvement Proposal 3, is one of the most significant recent developments for Hyperliquid. Also known as “Builder-Deployed Perpetuals”, this update enables a fully decentralized process for listing new perp markets on Hyperliquid.

Until now, the creation of new markets was managed by validators, who selected assets and set technical parameters through strict governance. With HIP-3, the deployment of a new market on HyperCore—the core infrastructure of Hyperliquid—becomes permissionless.

The process is straightforward: the opening of a new market takes place via a Dutch auction every 31 hours. During this period, each participant can bid the amount they are willing to pay to deploy a market, and the winner earns the right to launch.

Participants must first stake 1 million HYPE, or roughly 40 million dollars at the time of writing. While this amount may seem high, it acts as a guarantee aligning the interests of participants and Hyperliquid, ensuring the quality of deployed markets and the safety of users and the protocol.

The market operator chooses all key parameters: the oracle, margin and collateral asset, funding and liquidation parameters, the share of trading fees received (up to 50%), as well as the market's governance and management.

Strategic Value for Hyperliquid

Hyperliquid’s value proposition rests on several elements: an optimized technical infrastructure, liquidity depth rivaling leading centralized platforms, and a high-performance on-chain order book. The introduction of HIP-3 reinforces Hyperliquid’s positioning as infrastructure for on-chain finance and is a core component of the “AWS of liquidity” thesis.

The HIP-3 model encourages a network effect: each new market attracts new traders, deepens liquidity, drives demand for HYPE (required for staking and auction payments), and ultimately increases activity and protocol revenues.

This approach is radically different from centralized exchanges, where asset listings rely on opaque and often extractive criteria for projects. HIP-3 now enables permissionless access to Hyperliquid’s technology, paving the way for a wide range of new markets: equities, US indices, commodities, FX, structured products, prediction markets, and more.

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Kinetiq Launch

About Kinetiq

Kinetiq is the native liquid staking protocol for the Hyperliquid ecosystem. It allows users to transform staked HYPE into kHYPE, a liquid staking token that generates yield and can be used within DeFi applications on HyperEVM.

Thanks to CoreWriter integration, Kinetiq is fully non-custodial: HYPE deposited by users is immediately staked on HyperCore and distributed across multiple validators. Allocation between validators is actively managed using a scoring algorithm called StakeHub.

Launched on July 5, 2025, Kinetiq quickly became the leading protocol on HyperEVM in terms of TVL, with over 900 million dollars. You can find our full presentation on Kinetiq here:

Using HIP-3

On July 31, Kinetiq announced Launch, presented as the first “exchange-as-a-service” (EaaS). Simply put, this is infrastructure designed to help teams deploy new perp markets on Hyperliquid via HIP-3.

Leveraging Kinetiq’s liquid staking architecture, Launch enables teams to create crowdfunding pools to raise the 1 million HYPE required to launch “builder-deployed markets”. In practice, Launch offers several services:

• A technical infrastructure to easily deploy and manage markets via HIP-3.
• A crowdfunding mechanism to reach the HYPE staking requirement.
• Risk management and fund protection systems for kHYPE holders.
• An automated revenue sharing system to distribute a portion of market fees to kHYPE holders who participate in crowdfunding.

In summary, Launch enables teams looking to deploy new perp markets to easily access the necessary HYPE stake, allowing them to focus on market management and value creation for users.

This also creates a new opportunity for HYPE holders. In addition to participating in Hyperliquid staking, it is now possible to deposit kHYPE into specific pools to support the deployment of a market and receive a share of associated revenues.

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Liminal

About Liminal

Liminal is a yield farming protocol built on Hyperliquid and accessible on HyperEVM. It provides access to automated delta-neutral strategies on stablecoins (USDC) with no market volatility exposure.

In practice, Liminal uses users’ USDC on Hyperliquid to buy an asset on the spot market and open an equivalent short position on the perps market, for the same asset. The yield (around 14% over the last 30 days) is generated by funding fees paid by Hyperliquid traders.

In the background, Liminal automatically manages deposits, position opening and closing, and risk management. The protocol is built on Hyperliquid’s infrastructure and leverages its liquidity depth for minimal slippage and fast execution.

As of July 22, Liminal is accessible to all users without invitation codes. The protocol charges a simple fee structure: 0.01% per transaction and 10% on performance.

To join Liminal, feel free to use our referral link (code LILOAK). Thank you for your support.

Using HIP-3

The arrival of HIP-3 is a significant milestone for Liminal, extending far beyond delta-neutral strategy automation. Since available assets are directly linked to markets deployed on Hyperliquid, Liminal can now consider several major innovations thanks to HIP-3.

First, HIP-3 could enable the development of tokenized equities on Hyperliquid. With listings of stocks (Apple, Tesla, etc.) on Unit (and thus on the Hyperliquid spot market) and the corresponding perp market via HIP-3, Liminal could offer a fully on-chain, institutional-grade delta-neutral strategy for this asset class.

HIP-3 should also introduce markets supporting new collateral types such as USDe, BTC, or ETH, beyond just USDC. This opens new opportunities for Liminal:

• USDe-margined markets could provide dual yield: from funding and from the native stablecoin yield.
• New strategies become possible, e.g., holding BTC spot while shorting a BTC-margined BTC-PERP market. Since both assets are the same, this eliminates depeg and cross-asset volatility risk.

In short, HIP-3 enables Hyperliquid to create new perp markets, Unit provides tokenized assets for the spot market, and Liminal becomes the yield engine to access delta-neutral yield farming strategies.

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Ventuals’ Pre-IPO Markets

Ventuals is a protocol that offers a perp market structure for trading pre-IPO companies, built on Hyperliquid via HIP-3. It targets a previously inaccessible market: speculating on private company valuations before IPO, historically reserved for specialized players.

Ventuals creates perp markets where the underlying is not a stock price, but the total valuation of a private company (e.g., OpenAI, Stripe, SpaceX). Users can take long or short positions with up to 10x leverage on the valuation evolution of their chosen company.

The oracle mechanism is based on public secondary transaction data and widely recognized private market estimates. The unit of account (“Valuation Unit”) is the company’s total valuation in billions of dollars: for example, a price of 350.24 on vOAI represents a $350.24B valuation for OpenAI.

Initial liquidity is provided by a market making vault managed by the Ventuals team, but the protocol aims to progressively open the role of liquidity provider to the community. In case of a major event (fundraise, IPO, acquisition), the affected market is suspended and positions are settled according to the latest public valuation.

The creation of these pre-IPO markets is enabled by HIP-3, allowing Ventuals to benefit from Hyperliquid’s matching engine, order book depth, liquidity, and execution speed, while retaining control over key parameters. Above all, Ventuals brings on-chain access to products that were previously out of reach for DeFi.

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Conclusion

By making the deployment of new perpetual markets fully permissionless with HIP-3, Hyperliquid does more than simply expand its product range: it becomes true infrastructure for on-chain finance, capable of hosting markets for asset classes that were previously inaccessible.

For users, this also means a proliferation of use cases. Whether it’s Kinetiq’s Launch, Liminal’s yield architecture, or Ventuals’ pre-IPO markets, the ecosystem offers entirely new opportunities for yield and investment.

This new model does, however, raise fundamental challenges: the quality and robustness of oracles, smart contract security, and the need for robust governance and monitoring to maintain confidence across a diverse range of markets.

If liquidity and demand follow, HIP-3 could indeed realize the “AWS of liquidity” thesis and establish Hyperliquid as the leading on-chain derivatives infrastructure for the next generation of decentralized finance.