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In this edition, we're covering HIP-3 and how it could impact Hyperliquid's growth. With HIP-3 around the corner and Unit launching Trade.xyz, likely a HIP-3 market for equities and indexes, now is the perfect time to revisit Keisan’s article on HIP-3’s potential.

Written by Keisan.

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Let’s get into it.

Disclaimer: Views expressed are the author’s personal views and should not be relied upon as investment advice.

Discloser: Analyst (Keisan) behind this research owns $HYPE. Full disclaimer and disclosure here.

Key Takeaways

• HIP-3 expands Hyperliquid beyond crypto into equities, forex, commodities, and prediction markets.

• Perps go mainstream, onboarding retail stock traders and new users?

• Hyperliquid grows the pie and shares it: the AWS of liquidity.

 1. Hyperliquid: An Unified Platform

As new markets get added via HIP-3, existing Hyperliquid users will have access to a whole new world of offerings. Some of these might include equities, pre-IPO companies, forex, commodities, prediction markets, and more.

Instead of having to leave Hyperliquid to trade non-crypto products, users will be able to do everything on chain, within the Hyperliquid ecosystem. Off-ramping / on-ramping between crypto <> trad-fi (and even trad-fi <> trad-fi) has a lot of friction and often results in one-way transfers ($ does not flow back).

Having a full stack will keep liquidity within the ecosystem, boosting trading volumes on both HIP-3 markets and native crypto perps.

2. New User Base

Currently, Hyperliquid users are entirely composed of crypto traders: this could all change with HIP-3. Equity perps trading has the potential to be a massive onboarding event for the millions of retail traders out there that actively trade stocks. Perps are a much better product vs. margin trading, yet there are currently no viable venues to trade equity perps on. With HIP-3, Hyperliquid has the potential to become the single best UI/UX for trading equities, period.

Pre-IPO company markets also have the potential to onboard the techie investor type, as well as savvy private market investors, and early stage company employees looking for liquidity. These are 3 non-traditional "trading" types of users that may find their way to the Hyperliquid stack.

3. Perps are King

I would like to thank Robert Shiller for being the first person to conceptualize perpetual futures in 1992.

Perpetual futures are the single best financial instrument that exist on this planet.

For the first time in a meaningful way, perps will exit the world of crypto and be launched for all sorts of markets. They will also be launched on crypto-native trading UI/UXs, which are far superior to those of brokerage firms.

I think non-crypto traders are in for a pleasant surprise which may sway the way they view blockchain / crypto.

4. Perpefication of Everything

One of the great things about perps is you can create a perp for nearly anything. 

Alvin Hsia, CEO and cofounder of Ventuals, wrote a good thread detailing the types of markets we may see on HIP-3 and how they can come to exist.

The amount of market opportunities is endless, and in my opinion, we have only just scratched the surface of what is possible with perps and prediction markets (which in many ways, HIP-3 markets will serve as).

5. Attention Economy

Liquid markets tell stories. This was evident during the election, when the world was captivated by Polymarket. Why Polymarket? Because it was the most liquid venue, and liquidity is the arbiter of truth. Polymarket has since gained significant traction and recently raised $200m at a $1B+ valuation.

I see no reason why come next election, an HIP-3 market for presidency won't be the most liquid prediction market in the world. The plumbing is far more advanced and I believe the UI/UX will be as well.

HIP-3 markets will no doubt draw attention from the masses in short order. Think about when equities are closed over the weekend and big news comes out, where will people look to see how they believe equities are going to move at the open?

There will only be one place: Hyperliquid.

This sort of attention doesn't fade easily. It is mysterious, unique, and captivating. Even in its early days people will question it and want to understand it more.

Attention = visibility = growth.

6. Growing the Pie

HIP-3 markets have the potential to grow the pie for all of crypto. Those who don't believe in crypto or who never understood its use case may finally grasp what a permissionless, transparent, trading system is capable of.

Reddit groups, day traders, tech investors, and speculators from around the world, will soon be able to trade perps of all forms, integrated into one seamless stack powered by blockchain and crypto.

This will be a completely different crypto experience than what they likely have ever experienced before. Hopefully, one that sticks.

7. Sharing the Pie

Hyperliquid's token design is unlike anything we have ever seen before for an app or L1.

Auction listings, builder codes, and HIP-3 markets create a world in which permissionless finance is possible. This unselfish token design makes it so that anyone can build on top of Hyperliquid and receive a share of the pie: the AWS of liquidity as many say.

Hyperliquid is not just another app, exchange, or L1: Jeff's vision is far more ambitious

Hyperliquid will be the blockchain to house all finance, and HIP-3 is a pivotal step in making this vision a reality.

Hyperliquid

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