Author: Frank, PANews Since the launch of the HIP-3 growth model, this flagship product has been rapidly becoming a new business growth engine for Hyperliquiid, not only driving explosive growth in trading volume in the market with a tenfold increase in monthly trading volume, but also injecting more innovative vitality and liquidity into the Perp DEX track. Behind the surge in trading volume is HIP-3's ambition to become the underlying trading platform for the future decentralized market. However, this transformation path is far more arduous than the data suggests. Transaction volume increased more than tenfold in a single month; the main driving force behind the growth model The full name of the HIP-3 proposal is "Builder-Deployed Perpetuals." Its core concept is to decentralize "market creation rights" from the core protocol team to the community and developers. Under the HIP-3 architecture, Hyperliquid takes a backseat, becoming the underlying settlement and matching engine, while the rights to define assets, set risk parameters, and select oracles on the front end are completely transferred to third-party "deployers." Under this mechanism, A key hurdle in HIP-3's mechanism is that any developer wishing to deploy a permissionless marketplace must stake 500,000 HYPE tokens on the network. At the current price of $35, this staked amount to approximately $17.5 million. If a deployer engages in malicious behavior, validators can vote to forfeit these assets. Furthermore, even if the deployer intends to exit the marketplace, a 7-day unlocking period applies. This threshold setting forces deployers to be financially strong institutions or teams committed to long-term development, rather than speculative retail investors. On the other hand, such a staking amount is a highly effective deflationary measure for the HYPE token. Considering that HYPE's maximum supply is 1 billion tokens and its current market capitalization is approximately $9.5 billion, each lock-up under this model is equivalent to locking up two-thousandths of the tokens. Furthermore, the HIP-3 market currently enforces an isolated position model. This means that the position risk of a user in a specific HIP-3 market is completely isolated from their BTC/USDC position on the mainnet. Even if a flash crash or oracle attack occurs in a particular asset, its impact is limited to that specific market and will not affect the user's overall account funds or other mainstream asset positions. Since its launch, HIP-3 has experienced exponential growth. As of November 28th, its transaction volume exceeded $3.6 billion, more than ten times that of a month prior. The single-day transaction volume on November 25th even reached $500 million. This performance is comparable to Uniswap V3's transaction volume on Ethereum. Furthermore, the total number of users in the HIP-3 market has reached 18,000, while Hyperliquid has accumulated over 800,000 users to date. The recent surge in HIP-3 data is primarily due to the introduction of Growth Mode on November 19th. This new mode allows for license-free market deployment and significantly reduces fees, thereby improving liquidity. The new feature can reduce transaction fees for new markets by over 90%, with top traders potentially seeing fees as low as 0.00144%. Simultaneously, Growth Mode requires markets to avoid overlap with existing assets and imposes a 30-day lock-up period to maintain stability. The growth effect of this upgrade is clearly evident in the data changes. Leading applications accounted for over 90% of trading activity; the hot US stock market still faces liquidity challenges. According to Nansen data monitoring, more than 100 decentralized applications are currently being built on HIP-3, generating $94 million in new revenue. In terms of trading volume sources, Trade.xyz contributes almost all of the HIP-3 trading activity, consistently accounting for over 95%. Trade.xyz is the first permissionless perpetual contract exchange built on the HIP-3 protocol within the Hyperliquid ecosystem, developed by the Hyperunit (Unit) team. Behind the explosive growth in trading volume, besides the market's high expectations for airdrops to Trade.xyz , according to @kungfu_crypto's analysis, Trade.xyz boasts genuinely active trading, rather than being a volume-driving platform. This is primarily due to its provision of contracts with fees approaching those of US stocks, offering a significant cost advantage for high-frequency, low-leverage trading. This demonstrates that the DEX's trading community has a small average transaction value but high-frequency activity. Furthermore, the Unit team behind it has long been deeply involved in Hyperliquid, building a strong foundation of trust. Currently, Trade.xyz's flagship product is XYZ100, an on-chain index contract tracking the top 100 non-fintech companies in the US (parallel to the Nasdaq 100 index). To date, XYZ100 accounts for over 60% of Trade.xyz's trading volume. In addition, it has launched perpetual contracts for popular US stocks such as NVDA (Nvidia), TSLA (Tesla), and MSFT (Microsoft). It's worth noting that Trade.xyz 's on-chain stock trading doesn't actually involve real stocks in the traditional sense, but rather an index contract. This type of contract doesn't involve physical settlement and doesn't share the liquidity of the US stock market. The biggest advantage of this index contract is that it allows participation in US stock market fluctuations without KYC (Know Your Customer) verification, and it achieves 24/7 uninterrupted trading through a simulated mechanism. For investors who don't need physical settlement but want to profit from US stock market volatility, this casino-like simulated trading platform is the most convenient option. However, this model also exposed the problem of insufficient liquidity. According to a recent report by KOL He Bi, three trading pairs built on another market, Ventures, were unable to close short positions and could only be shorted. This led to an abnormal price surge. The root cause was precisely insufficient liquidity. In fact, this is not a problem unique to the HIP-3 market. The on-chain stock trading market as a whole is still immature, and this lack of liquidity seems to be widespread. Another crypto practitioner, @EthWiz0X, stated that buying $100,000 worth of Ondo Finance's TSLAon on Uniswap would result in a price impact of up to 83.34%. In the HIP-3 market, apart from a few tokens like Trade.xyz 's XYZ100 and NVDA, which have relatively decent trading volumes, other markets like Felix and Ventures maintain daily trading volumes at a low level of several million dollars. This is mainly because trading pairs in markets like Felix and Ventures generally use Hyperliquid's native stablecoin, USDH. Compared to the widely adopted USDC, USDH currently lacks significant market acceptance. Furthermore, the on-chain stock trading service is currently facing increased competition from more players. For example, on November 26th, Binance Wallet announced the addition of on-chain stock trading with transaction fees as low as 0%. In addition, major exchanges such as Bitget and Bybit have also launched similar US stock trading sections. Of course, as a permissionless marketplace, HIP-3's applications are not simply limited to on-chain stock trading. Another project, TROVE, targets the trading of collectible toys, such as Pokémon trading cards, CS2 skins, and perpetual contracts for Nintendo and Pop Mart stocks. Ventuals, on the other hand, targets the pre-IPO market. Compared to the US stock market, these market directions are currently still niche markets, and therefore, the insufficient trading depth in these alternative markets is largely related to their specific themes. Multiple positive factors have driven the rise in popularity, but the dilemma of ecosystem expansion and stablecoins still remains. The recent attention received by the HIP-3 market may be mainly due to the following reasons: 1. The recent divergence in the crypto market has weakened. As the market enters a bear market, the price movements of most tokens are influenced by Bitcoin. In an environment where the entire market rises and falls together, the market favors assets that can move independently. The US stock market, relatively unaffected by the direct impact of the crypto market, exhibits greater independence. 2. Airdrop Expectations for HIP-3 Ecosystem Projects. Previously, Hyperliquid's airdrop left a positive impression on the market, leading to widespread belief that projects within the Hyperliquid ecosystem are likely to replicate the success of the Hyperliquid airdrop. These projects, which haven't yet issued their own tokens, are currently in a period of high trading volume. 3. There is much more potential to be explored in HIP-3. As mentioned earlier, the potential of HIP-3 is not limited to the stock market; it may see explosive growth in more alternative markets in the future. Therefore, in a market currently experiencing a lack of narrative, such potential can easily fuel optimism. In September of this year, the Hyperliquid community also proposed the concept of HIP-4, aiming to introduce perpetual contracts for prediction markets. This roadmap is even more aligned with current market trends. A Falconx report also noted, "We expect the incremental fees generated by the perpetual futures markets deployed by HIP-3 builders to drive HYPE growth by 67% over the next year, with the equity and index markets being the main drivers." Despite multiple positive factors in the market, these optimistic expectations do not necessarily guarantee a bright future for the HIP-3 market. In terms of liquidity, apart from Trade.xyz, other markets currently have pitifully low liquidity and trading volume. Regarding trading currencies, the HIP-3 market's popularity still relies on the mainstream acceptance of USDC, while Hyperliquid aims to support its native stablecoin USDH as a mainstream trading currency. Finding a balance between these two factors is the biggest obstacle preventing the HIP-3 market from truly taking off.Author: Frank, PANews Since the launch of the HIP-3 growth model, this flagship product has been rapidly becoming a new business growth engine for Hyperliquiid, not only driving explosive growth in trading volume in the market with a tenfold increase in monthly trading volume, but also injecting more innovative vitality and liquidity into the Perp DEX track. Behind the surge in trading volume is HIP-3's ambition to become the underlying trading platform for the future decentralized market. However, this transformation path is far more arduous than the data suggests. Transaction volume increased more than tenfold in a single month; the main driving force behind the growth model The full name of the HIP-3 proposal is "Builder-Deployed Perpetuals." Its core concept is to decentralize "market creation rights" from the core protocol team to the community and developers. Under the HIP-3 architecture, Hyperliquid takes a backseat, becoming the underlying settlement and matching engine, while the rights to define assets, set risk parameters, and select oracles on the front end are completely transferred to third-party "deployers." Under this mechanism, A key hurdle in HIP-3's mechanism is that any developer wishing to deploy a permissionless marketplace must stake 500,000 HYPE tokens on the network. At the current price of $35, this staked amount to approximately $17.5 million. If a deployer engages in malicious behavior, validators can vote to forfeit these assets. Furthermore, even if the deployer intends to exit the marketplace, a 7-day unlocking period applies. This threshold setting forces deployers to be financially strong institutions or teams committed to long-term development, rather than speculative retail investors. On the other hand, such a staking amount is a highly effective deflationary measure for the HYPE token. Considering that HYPE's maximum supply is 1 billion tokens and its current market capitalization is approximately $9.5 billion, each lock-up under this model is equivalent to locking up two-thousandths of the tokens. Furthermore, the HIP-3 market currently enforces an isolated position model. This means that the position risk of a user in a specific HIP-3 market is completely isolated from their BTC/USDC position on the mainnet. Even if a flash crash or oracle attack occurs in a particular asset, its impact is limited to that specific market and will not affect the user's overall account funds or other mainstream asset positions. Since its launch, HIP-3 has experienced exponential growth. As of November 28th, its transaction volume exceeded $3.6 billion, more than ten times that of a month prior. The single-day transaction volume on November 25th even reached $500 million. This performance is comparable to Uniswap V3's transaction volume on Ethereum. Furthermore, the total number of users in the HIP-3 market has reached 18,000, while Hyperliquid has accumulated over 800,000 users to date. The recent surge in HIP-3 data is primarily due to the introduction of Growth Mode on November 19th. This new mode allows for license-free market deployment and significantly reduces fees, thereby improving liquidity. The new feature can reduce transaction fees for new markets by over 90%, with top traders potentially seeing fees as low as 0.00144%. Simultaneously, Growth Mode requires markets to avoid overlap with existing assets and imposes a 30-day lock-up period to maintain stability. The growth effect of this upgrade is clearly evident in the data changes. Leading applications accounted for over 90% of trading activity; the hot US stock market still faces liquidity challenges. According to Nansen data monitoring, more than 100 decentralized applications are currently being built on HIP-3, generating $94 million in new revenue. In terms of trading volume sources, Trade.xyz contributes almost all of the HIP-3 trading activity, consistently accounting for over 95%. Trade.xyz is the first permissionless perpetual contract exchange built on the HIP-3 protocol within the Hyperliquid ecosystem, developed by the Hyperunit (Unit) team. Behind the explosive growth in trading volume, besides the market's high expectations for airdrops to Trade.xyz , according to @kungfu_crypto's analysis, Trade.xyz boasts genuinely active trading, rather than being a volume-driving platform. This is primarily due to its provision of contracts with fees approaching those of US stocks, offering a significant cost advantage for high-frequency, low-leverage trading. This demonstrates that the DEX's trading community has a small average transaction value but high-frequency activity. Furthermore, the Unit team behind it has long been deeply involved in Hyperliquid, building a strong foundation of trust. Currently, Trade.xyz's flagship product is XYZ100, an on-chain index contract tracking the top 100 non-fintech companies in the US (parallel to the Nasdaq 100 index). To date, XYZ100 accounts for over 60% of Trade.xyz's trading volume. In addition, it has launched perpetual contracts for popular US stocks such as NVDA (Nvidia), TSLA (Tesla), and MSFT (Microsoft). It's worth noting that Trade.xyz 's on-chain stock trading doesn't actually involve real stocks in the traditional sense, but rather an index contract. This type of contract doesn't involve physical settlement and doesn't share the liquidity of the US stock market. The biggest advantage of this index contract is that it allows participation in US stock market fluctuations without KYC (Know Your Customer) verification, and it achieves 24/7 uninterrupted trading through a simulated mechanism. For investors who don't need physical settlement but want to profit from US stock market volatility, this casino-like simulated trading platform is the most convenient option. However, this model also exposed the problem of insufficient liquidity. According to a recent report by KOL He Bi, three trading pairs built on another market, Ventures, were unable to close short positions and could only be shorted. This led to an abnormal price surge. The root cause was precisely insufficient liquidity. In fact, this is not a problem unique to the HIP-3 market. The on-chain stock trading market as a whole is still immature, and this lack of liquidity seems to be widespread. Another crypto practitioner, @EthWiz0X, stated that buying $100,000 worth of Ondo Finance's TSLAon on Uniswap would result in a price impact of up to 83.34%. In the HIP-3 market, apart from a few tokens like Trade.xyz 's XYZ100 and NVDA, which have relatively decent trading volumes, other markets like Felix and Ventures maintain daily trading volumes at a low level of several million dollars. This is mainly because trading pairs in markets like Felix and Ventures generally use Hyperliquid's native stablecoin, USDH. Compared to the widely adopted USDC, USDH currently lacks significant market acceptance. Furthermore, the on-chain stock trading service is currently facing increased competition from more players. For example, on November 26th, Binance Wallet announced the addition of on-chain stock trading with transaction fees as low as 0%. In addition, major exchanges such as Bitget and Bybit have also launched similar US stock trading sections. Of course, as a permissionless marketplace, HIP-3's applications are not simply limited to on-chain stock trading. Another project, TROVE, targets the trading of collectible toys, such as Pokémon trading cards, CS2 skins, and perpetual contracts for Nintendo and Pop Mart stocks. Ventuals, on the other hand, targets the pre-IPO market. Compared to the US stock market, these market directions are currently still niche markets, and therefore, the insufficient trading depth in these alternative markets is largely related to their specific themes. Multiple positive factors have driven the rise in popularity, but the dilemma of ecosystem expansion and stablecoins still remains. The recent attention received by the HIP-3 market may be mainly due to the following reasons: 1. The recent divergence in the crypto market has weakened. As the market enters a bear market, the price movements of most tokens are influenced by Bitcoin. In an environment where the entire market rises and falls together, the market favors assets that can move independently. The US stock market, relatively unaffected by the direct impact of the crypto market, exhibits greater independence. 2. Airdrop Expectations for HIP-3 Ecosystem Projects. Previously, Hyperliquid's airdrop left a positive impression on the market, leading to widespread belief that projects within the Hyperliquid ecosystem are likely to replicate the success of the Hyperliquid airdrop. These projects, which haven't yet issued their own tokens, are currently in a period of high trading volume. 3. There is much more potential to be explored in HIP-3. As mentioned earlier, the potential of HIP-3 is not limited to the stock market; it may see explosive growth in more alternative markets in the future. Therefore, in a market currently experiencing a lack of narrative, such potential can easily fuel optimism. In September of this year, the Hyperliquid community also proposed the concept of HIP-4, aiming to introduce perpetual contracts for prediction markets. This roadmap is even more aligned with current market trends. A Falconx report also noted, "We expect the incremental fees generated by the perpetual futures markets deployed by HIP-3 builders to drive HYPE growth by 67% over the next year, with the equity and index markets being the main drivers." Despite multiple positive factors in the market, these optimistic expectations do not necessarily guarantee a bright future for the HIP-3 market. In terms of liquidity, apart from Trade.xyz, other markets currently have pitifully low liquidity and trading volume. Regarding trading currencies, the HIP-3 market's popularity still relies on the mainstream acceptance of USDC, while Hyperliquid aims to support its native stablecoin USDH as a mainstream trading currency. Finding a balance between these two factors is the biggest obstacle preventing the HIP-3 market from truly taking off.