LIQUIDPAD
Launch a perp
How it works  /  The tech, in plain words

What's under the hood. No jargon left unexplained.

LIQUIDPAD sits on two pieces of technology: Hyperliquid's HIP-3, which lets outside teams run their own futures markets, and Robinhood Chain, where proposals and backers live. Here is how each part works, with the real numbers from Hyperliquid's own documentation.

00 — The short version

An exchange inside an exchange, with a deposit on the line.

Hyperliquid is a crypto exchange that runs on its own blockchain. Its engine, called HyperCore, runs the order books, the margin and the liquidations for everyone.

HIP-3 ("Hyperliquid Improvement Proposal 3") lets outside teams run their own futures exchange inside Hyperliquid. They decide which markets exist and how they behave, but trade on Hyperliquid's engine, with Hyperliquid's traders. In return they lock up a very large deposit, and they lose some or all of it if their market misbehaves.

Running one of these markets for a real-world asset like gold, a stock or a currency is hard. LIQUIDPAD is the layer that makes it easier: anyone proposes a market, the crowd shows whether it deserves to exist, and the spec is written so a deployer could put it on Hyperliquid.

01 — The price of entry

Five hundred thousand HYPE, locked for half a year.

500K HYPE
Deposit to run one exchange
tens of millions of dollars
183days
Minimum lock after the exchange launches
3free
Markets per exchange before auctions start
1dex
Exchange per deposit, with its own books and margin

HYPE is Hyperliquid's own token. The deposit is held as "stake", which means it's locked and can be penalised. Hyperliquid says the 500,000 requirement is expected to come down over time. Anything above the requirement can be withdrawn earlier.

Each deposit buys one exchange (Hyperliquid calls it a "dex"), kept separate from everyone else's. The first three markets on it are free to list. After that, each new market is sold by Dutch auction: the price starts high and drops until someone buys. Each deployer also gets up to seven "reserve" listings that skip the auction wait.

02 — The deployer's control panel

Every setting is a signed instruction sent to the chain.

This is the full list of what whoever runs a HIP-3 exchange can change. LIQUIDPAD's launch page asks you to choose the ones that matter before anything exists.

Register a marketregisterAsset
Creates the market: its name, price precision, starting price and margin style.
Set the oracle pricesetOracle
Pushes the real-world price in. Allowed at most every 2.5 seconds, and expected every 3 seconds even when nothing changed. More on this below.
Leverage rulesmargin tables
Up to three tiers, from 1x to 50x. For example 20x on small positions and 5x on very large ones.
Open-interest capsetOpenInterestCaps
The most money that can sit in open positions. The lowest allowed cap is $1,000,000, or half the current open interest if that's higher. It can always be lowered as a safety measure.
Funding settingsmultipliers · rates · clamps
Tunes the regular payments between longs and shorts that keep the market price close to the real price.
FeessetDeployerFees
The deployer adds a fee on top of Hyperliquid's, from 0 to 3 times the base fee, and collects it. "Growth mode" cuts fees by about 90% to attract early traders.
Halt tradinghaltTrading
Cancels every order and closes every position at the current price. It ends the market; it is not a pause. The same market can be reopened later.
Sub-deployerssetSubDeployers
Hands one specific power to another wallet. Typically a separate, always-on wallet that only updates prices.
LabelssetPerpAnnotation
Category, description and display name that trading apps show next to the market.
Disable the exchangedisableDex
Shuts the whole exchange down, permanently.
03 — The oracle

The deployer is the price feed. Hyperliquid only limits how wild it can be.

An oracle is how a market knows the real price of the thing it tracks: the price of gold in London, or of NVIDIA on Nasdaq. On HIP-3, the deployer supplies it. Hyperliquid can't check whether that price is honest, so it puts guard rails around it instead.

How the market price is set
  • The mark price (the price used for profit, loss and liquidations) is the middle value of three prices: two the deployer submits, and what is actually trading on the order book.
  • It can move at most 1% per update.
  • It can never go past 10 times the day's starting price.
  • If the deployer goes silent for 10 seconds, the market falls back to order-book prices alone. Hyperliquid tells deployers not to rely on that.
Two keys, on purpose
  • A main key changes the market's rules. It's used rarely and kept offline.
  • A separate price key signs a new price about every 3 seconds, around the clock.
  • If the price key leaks, the attacker can distort prices, but can't change leverage, fees or caps.
  • Hyperliquid also asks for assets that are well defined and hard to manipulate. It says price indices are often unsuitable.
What LIQUIDPAD's oracle router does

Four jobs, every few seconds, forever: pull prices from several sources (exchanges, benchmarks, on-chain feeds); throw out any that are stale or out of line; blend the rest into one reference price; and sign it from the separate price key. It also has to decide what a stock's price is on a Saturday, when Nasdaq is closed but the market isn't. Every real-world-asset deployer needs this, and most don't want to build it.

04 — Slashing

Break the market, lose the deposit.

20% max
Bad inputs that slow the network down
50% max
Bad inputs that cause brief downtime
100% max
Bad inputs that break the chain's state, or cause long downtime

Who decides: Hyperliquid's validators, the operators who run the network, vote. Votes count by how much each one stakes, and the penalty is the middle vote.

Only the effect matters. An honest mistake, a badly written spec and a stolen key are all treated the same. Ordinary Hyperliquid bugs that have nothing to do with the deployer's inputs are not punished.

For backers

Slashed HYPE is burned. It isn't paid to traders who lost money and can't be recovered. The deposit stays slashable during the 7-day withdrawal wait, so leaving doesn't dodge a penalty.

05 — Safety nets

What stops one bad trade sinking the market.

Isolated marginthe default
Each position is backed only by the money put into it. If it fails, it can't drain the rest of your account.
Cross marginopt-in, permanent
One balance backs several positions. Only allowed for assets with deep trading, a reliable outside price and resistance to manipulation. An asset that moves more than 50% in a day more than once a month is disqualified. Once turned on, it can't be turned off.
Backstop liquidatorone per exchange
A built-in account that takes over positions that are failing, so they don't have to be dumped on the market.
Auto-deleveragingADL, last resort
If even the backstop isn't enough, Hyperliquid closes some winning positions to pay for the losing ones, so the exchange can never owe more than it holds.
Collateralquote asset
Any token that qualifies as a quote currency can back positions, usually a dollar stablecoin. If validators later disqualify it, the exchanges using it are paused, but the deployer isn't slashed for that.
06 — HIP-3* · permissioned venues

An allowlist, for markets that legally need one.

Banks and regulated funds can't trade on a venue where anyone can show up. They need known counterparties, country restrictions and KYC ("know your customer" identity checks). HIP-3* lets a deployer flag a venue as permissioned and keep a list of approved wallets. The operator gets exactly five powers, and no others:

01

Approve or remove wallets

Who is allowed to trade at all.

02

Cancel one order

A specific resting order on the venue.

03

Cancel all orders

Every resting and time-sliced order, or those on up to ten markets.

04

Force reduce-only

A user can shrink positions but not open or grow them.

05

Move collateral

Between accounts, inside the same venue only.

Status

Testnet draft

Live on Hyperliquid's test network only. The rules may change and there's no mainnet date. Normal open markets are unaffected.

07 — HIP-4 · outcome markets

Yes or no, fully paid for up front.

HIP-4 adds a different kind of market: a yes/no contract that settles somewhere between 0 and 1. A "yes" pays out in full if it happens, a "no" pays out if it doesn't. Everything is fully collateralised, so there's no leverage and nothing to liquidate. Hyperliquid's first example is a daily question about Bitcoin's price, settled at 06:00 UTC. Fees are zero while it's being tested.

On LIQUIDPAD, a proposal can carry one: "Will this market go live in time?" or "Will it find traders in its first week?", letting people price a proposal's chances. Third-party coverage says builders can now create these from approved templates by staking 500,000 HYPE; Hyperliquid's HIP-4 page itself doesn't spell out who can deploy them yet.

08 — Where LIQUIDPAD fits

Two chains. What works today, and what doesn't yet.

Robinhood Chain

Where markets are proposed and backed

  • An Ethereum-compatible network from Robinhood (chain ID 4663), built on Arbitrum's technology.
  • The wallet you use on LIQUIDPAD is the same kind you'd use on Robinhood Chain.
Hyperliquid

Where a funded market would trade

  • A HIP-3 exchange with the proposal's oracle, leverage, cap and access settings.
  • Traded by anyone on Hyperliquid, or only allowlisted wallets on a HIP-3* venue.
Working today

Signed proposals and pledges

  • You launch a proposal by signing a message with your wallet. It's free: no gas, no transaction, no funds.
  • The server checks the signature matches both your wallet and the exact spec, then publishes it with its own page.
  • Others back it with a signed, non-binding pledge. Counts are real.
  • Live Hyperliquid data on Explore and every market page is read straight from Hyperliquid.
Not yet

Money and deployment

  • Pooling the 500,000 HYPE stake. It needs legal sign-off first, and someone to carry the stake to Hyperliquid.
  • Running the oracle router live.
  • Deploying a proposal to Hyperliquid as a real market.
09 — Why now

Real-world assets went from a sideshow to half the volume.

~50%
Share of Hyperliquid's futures volume in HIP-3 markets this summer, up from about 2% in January
$470B
Real-world-asset futures volume across exchanges in June, up from $85B in January
5powers
In the new HIP-3* permissioned venues, built for institutions

Stocks and indices from one builder, TradeXYZ, carry most of that volume, and most builder exchanges have nothing live at all. You can see both on the Explore page, live.

10 — Glossary

Every term on this site, in one line.

Perp
A "perpetual future": a bet on a price going up (long) or down (short) that never expires.
Leverage
Trading with more than you put in. 10x turns a 1% move into a 10% gain or loss.
Liquidation
When a leveraged position loses enough, it's closed automatically before it can lose more than it holds.
Oracle
The source that tells a market the real-world price of what it tracks.
Mark price
The price used for profit, loss and liquidations. On HIP-3, a blend of the oracle and the order book.
Open interest
The total value of all positions currently open in a market.
Funding
Regular payments between longs and shorts that pull the market price toward the real price.
Stake
Tokens locked up as a deposit that can be penalised.
Slashing
Destroying part or all of a stake as a penalty.
Validator
One of the operators who run the Hyperliquid network and vote on penalties.
HYPE
Hyperliquid's own token, used for staking.
HIP
"Hyperliquid Improvement Proposal": a numbered upgrade to how Hyperliquid works.
Dex / deployer
A builder's own exchange inside Hyperliquid, and the team or wallet that runs it.
RWA
Real-world asset: stocks, commodities, currencies, indices, private companies.
Signing a message
Your wallet proving something came from you. Free, and moves nothing.
Sources

Read the originals.

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