Hyperliquid has taken a decisive step toward redefining on-chain finance with the activation of its HIP-3 upgrade, a move that introduces permissionless perpetual market creation and a new “Growth Mode” designed to aggressively expand its ecosystem. This transformation positions the platform not just as an exchange, but as a foundational layer for the next generation of decentralized derivatives trading.
A New Era of Permissionless Markets
At its core, HIP-3 is a monumental shift in how markets are created. It empowers any developer or team to deploy their own perpetual futures markets directly on Hyperliquid’s high-performance Layer-1 blockchain, HyperCore, without needing centralized approval. This process, which went live on October 13, 2025, effectively turns Hyperliquid into an open platform where the community, rather than a central gatekeeper, drives the expansion of tradable assets.
The ambition is vast. This framework opens the door for perpetual contracts on virtually “any asset under the sun”, including stocks, commodities, bonds, and even niche collectibles like Pokémon cards. Early projects like TradeXYZ, Ventuals, and Felix Protocol were among the first to build on this new infrastructure, with one market, XYZ100, quickly generating over $1.3 billion in volume, demonstrating the potent demand for this new model.
The Mechanics of Growth Mode
To participate in this new ecosystem, deployers must make a significant economic commitment. They are required to stake 500,000 HYPE tokens (valued at approximately $19.3 million at the time of writing) to launch new markets. This staking requirement acts as a security bond, aligning the deployers’ interests with the health and stability of the protocol. Negligent or malicious behavior can lead to this stake being slashed, a temporary but crucial mechanism to ensure market quality.
The most compelling feature for traders is the dramatic fee reduction. HIP-3’s Growth Mode slashes standard taker fees by more than 90%, bringing them down to a range of 0.0045%–0.009%. For top-tier users who stake and maintain high trading volumes, fees can drop as low as 0.00144% to 0.00288%. This ultra-competitive pricing model is a direct challenge to centralized exchanges and is designed to attract a flood of new liquidity and participants.
For the deployers who create these markets, the incentive is a 50%share of the trading fees generated, with the other half going to the Hyperliquid protocol. To ensure stability for nascent markets, once a deployer sets their “fee scale”, it is locked for a 30-day period.
Strategic Impact and Future Outlook
The introduction of HIP-3 and its Growth Mode has profound implications for Hyperliquid’s trajectory, its tokenomics, and the broader competitive landscape.
By opening its infrastructure to builders, Hyperliquid is executing a vision to become the “AWS of liquidity”, providing a standardized, high-performance foundation upon which others can innovate. This model encourages an explosion of new financial products and deepens overall liquidity, which in turn improves execution for all traders. The platform has already demonstrated its capacity, handling up to $70 billion in volume during market turmoil without downtime, bolstering its case for on-chain transparency and reliability.
For the HYPE token, the mechanics of HIP-3 create powerful economic forces. The mandatory staking for deployers locks up a substantial supply of tokens, reducing circulating volume. Furthermore, the protocol uses a significant portion of its fee revenue—97% from the Assistance Fund—to conduct continuous buybacks of HYPE. With over $1.3 billion in tokens already bought back and permanently removed from circulation, this creates persistent buy-side pressure and can fundamentally reshape the token’s value proposition.
Ultimately, HIP-3 represents a direct challenge to the dominance of centralized exchanges (CEXs) by offering a transparent, permissionless, and cost-effective alternative for market creation and derivatives trading. The success of this ambitious upgrade will hinge on the quality of the markets that are launched and their ability to generate sustained, organic demand. If the ecosystem can continue to attract high-quality deployers and maintain its current momentum, HIP-3 could very well define the future of on-chain market structure.
