Hyperliquid Introduces Major Upgrade: A New Era for Perpetuals?

The Hyperliquid Improvement Proposal-3 (HIP-3) enables the permissionless deployment of new perpetual swap markets.
The upgrade aims to draw in new traders, market makers, and innovative markets, likely increasing demand for the HYPE token.
Hyperliquid, a prominent decentralized exchange and Layer 1 blockchain, launched its growth mode upgrade on November 19.

Key Takeaways

The Hyperliquid Improvement Proposal-3 (HIP-3) enables the permissionless deployment of new perpetual swap markets.
The upgrade aims to draw in new traders, market makers, and innovative markets, likely increasing demand for the HYPE token.
Hyperliquid, a prominent decentralized exchange and Layer 1 blockchain, launched its growth mode upgrade on November 19.

Hyperliquid fires up its biggest upgrade yet! New era for perps?

Introduction to HIP-3 and its Growth Mode

Hyperliquid has recently unveiled a significant upgrade to its Hyperliquid Improvement Proposal (HIP-3), known as the "HIP-3 growth mode." This initiative is specifically designed to foster activity within new markets and was announced on November 19.

Hyperliquid HIP-3 Upgrade

The growth mode follows the launch of HIP-3 a month earlier, which allowed any user with 500,000 Hyperliquid [HYPE] tokens to create a perpetual futures market on the platform. This latest upgrade will slash taker fees by over 90% while growth mode is active, significantly benefiting market participants.

Fee Reductions Explained

With the growth mode enabled, the usual taker fees of 0.045% will decrease dramatically to a range of 0.0045% to 0.009%. Furthermore, for the highest volume and staking tiers, fees could drop as low as 0.00144% to 0.00288%. Additional rebates and volume contributions will also be reduced by 90%.

Importantly, markets engaging in growth mode cannot include Bitcoin or similar assets, nor established markets, to prevent "parasitic volume." Additionally, options like ETFs, crypto indexes, or other crypto baskets will not be eligible for this mode. Validators maintain the authority to disable growth mode for any market that appears to violate these guidelines.

Growth in Hyperliquid's User Base

Source: Hyperliquid Stats

Recent statistics from Hyperliquid have indicated a consistent rise in daily unique user numbers over the last year. Although Open Interest experienced significant growth since March, it notably declined after the crash on October 10.

Many users on Crypto Twitter have responded positively to HIP-3 and the new upgrade, highlighting the appeal of the Hyperliquid on-chain decentralized exchange. Its accessibility without requiring KYC has been underscored by several users, suggesting a high potential for market growth.

One enthusiastic user stated that this upgrade is a "turbo-boost for innovation" on Hyperliquid, which they call the fastest Layer 1 for derivatives. They emphasized the potential for vastly lower costs compared to traditional chains, attracting a plethora of assets previously untouched by validators.

Impact on HYPE Token

The impact on the HYPE token and its holders is also projected to be positive. Throughout November, HYPE has been trading between $36.5 and $43.3, maintaining a consistent range since May, where it fluctuated between $32.5 and $50.

As Hyperliquid’s upgrades unfold, both traders and market makers can look forward to reduced fees and an entrance into new and untapped markets, promising an exciting future for the platform and its users.