Author:Coin Metrics State of the Network
Compiled by: Deep Tide TechFlow
Deep Tide Introduction: Hyperliquid's HIP-3 transformed the listing of perpetual contracts from validator voting to staking plus auction. Trade.xyz became the major player, capturing over half of Hyperliquid's trading volume in August. It attracted on-chain traders with perpetual contracts for traditional assets like AI chip stocks, crude oil, and the S&P. Its fee sharing continues to drive HYPE buybacks. Understanding this mechanism is crucial for assessing Hyperliquid's ecosystem concentration and HYPE's value capture.
Key Takeaways
In August, Trade.xyz's perpetual markets accounted for 55% of Hyperliquid's total market trading volume.
In July, trading volume for AI & compute stocks and indices on Trade.xyz constituted approximately 53% of its total volume.
Volume changes drove Trade.xyz to generate $5 million in fees over the past month. After a 50/50 split with Hyperliquid, most of its revenue is used to repurchase HYPE from the open market, reducing circulating supply.
Introduction
Hyperliquid's average daily futures trading volume over the past 30 days was about $8.5 billion, accounting for roughly 4.6% of global futures volume. Perpetual futures contracts have no expiration date and don't require managing the underlying asset, making it simpler to gain futures exposure. Compared to trading options with expirations, perpetuals only require paying a small funding rate to maintain positions and keep the futures price pegged to the spot price. Hyperliquid brings traditional financial operations like matching order books and low-latency trading on-chain, combining them with perpetual futures.
The Hyperliquid Improvement Proposal HIP-3, launched in October 2025, made the creation of perpetual futures markets permissionless. Now, builders can deploy their own futures markets to generate revenue, expand the ecosystem, and reduce reliance on Hyperliquid validators.
In this issue of State of the Network, we explore Hyperliquid's HIP-3 upgrade, Trade.xyz's market share, and how fee sharing from popular non-crypto markets creates value for the HYPE token.
How HIP-3 Improved Hyperliquid
HIP-3 unlocked the ability for independent builders to create perpetual markets. Previously, validators would vote to approve the creation of new perpetual markets. This caused delays and concentrated dependency on Hyperliquid validators.
With HIP-3, builders who stake 500,000 HYPE (approximately $27 million) earn the right to directly deploy three perpetual markets. After deployment, they can bid to create more. HIP-3 uses a 31-hour Dutch auction with a floor price of 500 HYPE (~$27,000), where builders bid to deploy the next market. After a builder wins an auction, the starting price for the next auction doubles from the winning price, then linearly decreases to 500 HYPE until another builder wins. Auction proceeds are used to repurchase HYPE tokens and reduce circulating supply.
Beyond the slashable 500,000 HYPE staking requirement, the auction costs have raised concerns about market centralization among HIP-3 builders—only a few can be profitable. Trade.xyz has become the largest HIP-3 perpetual exchange. Its open interest exceeds $4 billion, and it contributes an increasingly high share of trading volume and fees to the Hyperliquid ecosystem.
Trade.xyz's Rise as the Dominant Builder
Trade.xyz has captured a significant share of Hyperliquid's perpetual trading volume. Since January 2026, Trade.xyz has completed over $460 billion in trading volume, accounting for about 30% of Hyperliquid's total volume.
Hyperliquid currently has 484 markets: 232 natively issued by Hyperliquid, 108 deployed by Trade.xyz, and 144 deployed by other HIP-3 builders. Over the past month, Trade.xyz won 23 auctions and added 8 stock perpetual markets. Trade.xyz also added stocks of chipmakers like GIGADEV and CXMT, and compute ETFs like LYTE and NCLD. In August, Trade.xyz's monthly trading volume surpassed that of Hyperliquid's native markets, contributing about 55% of Hyperliquid's total volume.
Builders can create duplicate markets, customizing leverage caps and oracles to offer traders alternative markets. However, in existing duplicate markets, Trade.xyz captures almost 100% of the volume. This forces smaller builders to differentiate through niche perpetual markets not yet listed by Trade.xyz.
A Deeper Look at Individual Markets
Trade.xyz focuses on adding stock and commodity perpetual markets. Both Hyperliquid and Trade.xyz have captured one of the hottest narratives currently—AI/compute trading. As traders explore the commoditization of compute costs and build yield curves, Trade.xyz supports various perpetual contracts related to AI companies and industry benchmarks.
A basket of perpetual contracts for AI hyperscalers and chipmakers has taken off on Trade.xyz, contributing over 53% of its daily volume in July. SK Hynix and Micron markets each contributed over 20% of this basket's volume. SanDisk, the DRAM Index, and NVDA were the next most traded markets within the AI/compute narrative.
Although AI/compute trading has garnered recent attention, examining Trade.xyz's daily top markets helps illustrate the popularity of perpetual contracts, especially for traditional finance investments.
Since January, Crude Oil, Silver, Brent Crude, the Nasdaq 100 alternative, and the S&P 500 contract have been the top five perpetual contracts on Trade.xyz by cumulative volume. Despite previous high concentration, traders can react to events via 24/7 markets. After-hours and weekend volume spikes can occur in markets like Crude Oil due to geopolitical tensions. In August, these markets accounted for about 30% of Trade.xyz's total volume, down from a peak of 88%, indicating traders are diversifying their attention to newly listed markets on Trade.xyz.
The development of pre-IPO stock perpetuals also offers significant upside. The SPCX IPO generated over $1.3 billion in volume on Trade.xyz as traders speculated on the company's valuation. Trade.xyz's ability to quickly list markets allows it to capture short-term opportunities and generate substantial fees for itself and Hyperliquid.
How Fees Are Generated and How They Affect HYPE
Hyperliquid charges double the standard maker and taker fees for perpetual markets not operated by validators. Currently, Trade.xyz is in a growth mode, encouraging platform adoption by reducing fees by over 90%.
Trade.xyz generated $5 million in fees over the past month. These fees are split 50/50 with Hyperliquid, which primarily uses the funds to repurchase and burn HYPE tokens.
Since January 2026, we've observed a weak positive correlation between the HYPE token price and Hyperliquid's total trading volume. HYPE's value capture is becoming increasingly diversified. The growth of prediction markets, pre-IPO perpetuals, and revenue from USDC reserves all contribute to the valuation of HYPE and the Hyperliquid ecosystem.
Hyperliquid's Aligned Quote Asset (AQAv2) provides additional revenue. For all outstanding USDC on Hyperliquid, Circle shares 90% of the income generated from underlying investments with Hyperliquid. As more perpetual markets are deployed with USDC as the quote asset, Hyperliquid will earn more revenue for HYPE buybacks.
Trade.xyz is the leading HIP-3 builder in terms of open interest and trading volume. Over the past month, most perpetual trading volume has shifted from Hyperliquid's native markets to those listed by Trade.xyz. This is attributed to the markets available on Trade.xyz and hot trends—the AI/compute narrative, geopolitical tensions, and pre-IPO valuation exposure.
If Trade.xyz exits its growth mode, higher realized fee rates could increase fee revenue and potential HYPE buybacks. A resurgence in crypto perpetual activity could provide an additional source of volume. Hyperliquid and Trade.xyz continuing to offer services and integrations beneficial to the ecosystem can bring more value to the HYPE token. Trade.xyz is attracting an increasing number of users to participate in traditional finance investments through 24/7 markets.
