Hyperliquid has announced an important extension to its platform with the release of its HIP-3 upgrade, allowing users to establish independent perpetual swap markets as long as they stake 500,000 HYPE tokens.

This significant development, which becomes active on a Monday, enhances the Hyperliquid ecosystem by introducing permissionless contracts that third-party builders can deploy. Users can utilize the platform’s Discord channel to gain further insight into this update.

With the integration of HIP-3, anyone willing to stake $20.5 million in HYPE can set up their own markets, complete with tailored margins and orderbooks. Deployers also get to design market parameters, including fees that can reach 50% in addition to various operational characteristics.

Perpetual swaps serve as derivative contracts that mirror the value of an underlying asset indefinitely, enabling traders to maintain leveraged positions without a set expiration. This setup assures that market prices remain in line with real-time values through a systematic funding rate transfer between long and short positions.

Discord announcement of the upgrade. Source: Hyperliquid Discord

Development Timeline

The initial testing phase for the HIP-3 update began in late September, leading to this network upgrade available on the mainnet. According to blockchain infrastructure developer QuickNode, HIP-3 enhances the developer experience by allowing creators to manage their markets without existing gatekeepers.

“HIP-3 replaces gatekeepers with code so teams can ship markets as fast as they can design them while keeping quality and user safety intact through onchain rules and incentives.”

This update also eliminates listing fees that typically exist in centralized exchanges, lowers recurring costs through shared infrastructure, and allows builders to recuperate expenses via profit-sharing.

Chainsight, another blockchain data company, has insightfully noted that HIP-3 radically transforms the model, enabling diverse developers to list assets and deliver fertile opportunities for new financial instruments within the decentralized finance (DeFi) arena.

For instance, new asset markets can arise from non-traditional data feeds, such as forex pairs, pre-IPO company valuations, and even exotic financial derivatives. The synthetic market protocol, Ventuals, intends to use this upgrade to enable trading based on the valuations of private enterprises.

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This update aims to pave the way for innovations not only in perpetual swap contracts but also across the broader DeFi landscape.