This article was first published on The Bit Journal.
The next phase of the crypto derivatives competition is unlikely to be about exchanges trying to outdo each other for traders. More likely, it will be about whoever gets to control the infrastructure behind the markets themselves.
Nasdaq listed Hyperion DeFi made a big announcement on July 15 that they’re deploying 500,000 HYPE tokens to help power the institutional perpetual futures markets that are being launched through Hyperliquid HIP-3 framework in partnership with Skew Technologies.
They’re getting an equity stake in Skew as well as a cut of the profits from listing fees. More importantly, this deal opens up a new use case for the HYPE tokens held in treasury, beyond staking rewards.
Hyperion Turns Treasury Assets Into Revenue-Producing Infrastructure
Under this new agreement, Hyperion is going to be providing the bonded HYPE capital that institutional clients need to launch customized perpetual futures products on Hyperliquid without needing to get approval from anyone.
In return, Hyperion gains equity ownership in Skew Technologies. It also earns a share of listing-service revenues generated by new market launches.
According to the announcement, the revenue model includes both fixed payments and scaling components that are independent of trading activity, giving Hyperion exposure even if trading volumes fluctuate.
Hyperion CEO Hyunsu Jung said that the company has been getting a steady stream of requests from teams all over the world who want to use Hyperliquid to launch new markets.
The positive in all this is that Hyperion is moving from just owning some digital assets to being something that provides capital for building new markets.
A lot of crypto treasury companies make their money by selling their tokens and watching them go up in value. Hyperion is trying to turn those assets into productive assets capable of generating recurring cash flows.
Hyperliquid HIP-3 Markets Create A New Use Case For HYPE
The number of Hyperliquid HIP-3 Markets is likely going to grow based on a model that is very different to how normal exchanges work.
In a normal exchange, there is a need to get approval from the exchange operator before launching a new market. However, the current requirement for launching a HIP-3 market stands at 500,000 HYPE, exactly the amount Hyperion is deploying under the Skew agreement.
Hyperliquid documentation notes that this requirement may fall over time as the ecosystem matures. What this does is turn the HYPE tokens into real capital.
Developers use HYPE to get their markets listed, while companies that hold HYPE can lease out their tokens and earn a return. This means that HYPE has a new use case that goes way beyond just staking.
Institutional clients can use HIP-3 to launch customized contracts tied to cryptocurrencies, commodities, equities or other synthetic instruments while operating within Hyperliquid’s existing order book and margin infrastructure.
The Agreement Comes After Earlier Partnerships Unwound
The deployment of the HYPE tokens is also a consequence of Hyperion making some big changes to their strategy earlier this year.
Earlier this year, the company exited arrangements involving Native Markets and Felix Markets after Hyperliquid’s USDH stablecoin ecosystem was wound down.
That process released about 800,000 HYPE tokens that had previously been locked up in those deals, and they’re now available to be used on more interesting projects.
The Skew agreement appears to represent Hyperion’s next attempt to monetize those assets more efficiently
Unlike a lot of their previous projects which relied heavily on individual protocols, this new listing service is aiming to bring in a much broader customer base that’s after high-end perpetual products.
By spreading the risk and targeting a wider market, there’s a good chance that this diversification will give them a more stable revenue stream if this adoption thing keeps on growing.
Institutional Demand For Perpetual Markets Keeps On Growing
Timing is also on Hyperion’s side.
Hyperliquid HIP-3 ecosystem has been growing so fast over the past year as more traders are gravitating towards on-chain derivatives and the infrastructure that supports them.
Open interest in HIP-3 markets just hit about $3.69 billion, while the total volume is now about $309 billion, all according to the latest figures from industry trackers.
Traditional financial institutions are also beginning to pay closer attention to perpetual futures.
Last month, US regulators approved the country’s first regulated perpetual futures product, a move many analysts viewed as validation of a market structure that Hyperliquid helped popularize globally.
Conclusion
The deployment of 500,000 HYPE tokens by Hyperion shows just how Hyperliquid HIP-3 Markets are creating brand new business models around infrastructure ownership, market creation, and revenue sharing.
By swapping idle treasury assets for a bit of equity and a share of listing income, Hyperion is gearing up as a kind of capital layer that sits beneath the institutional derivatives markets and not just an asset holder.
The question is, can they scale this model? That depends on how many institutions decide to team up with Hyperliquid rather than trying to compete against it.
Glossary
HIP-3: Hyperliquid’s framework that lets developers launch their own permissionless perpetual futures markets.
HYPE: The native token of the Hyperliquid ecosystem.
Bonded Capital: Assets that are being held as collateral to help keep a protocol or market running.
Perpetual Futures: Derivative contracts that don’t have an expiry date, they let traders speculate on the price of an asset without having to worry about it running out.
Open Interest: Total value of all the futures contracts that are still active and haven’t been settled yet.
Frequently Asked Questions About Hyperliquid HIP-3
What Is Hyperliquid HIP-3?
HIP-3 is Hyperliquid’s permissionless framework that lets developers launch their own custom perpetual futures markets using HYPE tokens that are locked up as collateral.
How Many Tokens Is Hyperion Deploying?
Hyperion is putting in 500,000 HYPE tokens with Skew as part of this Skew agreement
What Does Hyperion Get In Return?
The company receives an equity stake in Skew and a share of listing-service revenues generated by new market launches.
Why Is The 500,000 HYPE Figure Important?
Hyperliquid currently requires 500,000 HYPE as the minimum bonded capital needed to launch a HIP-3 market.
References
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