Hyperliquid HIP-3: Is Decentralization of Listing Rights Really Useful?

Author: encryption Wei Tuo

Listing Cost Calculation

According to the HIP-3 proposal, the costs of launching a new market on Hyperliquid mainly include the following components:

• Margin Cost: Opening a market requires 500,000 HYPE, priced at approximately 40 USD, equivalent to 20 million USD margin.

If calculated based on an annualized opportunity cost of 10%, that is 2 million USD/year.

• Ticker Cost: Assume it to be 5000-10000 USD, negligible.
• Oracle + Gas Cost: Approximately $80,000 - $90,000/year.

Therefore, the total cost of a new market in its first year is approximately 2.1 million dollars (if costs cannot be shared across multiple tickers).

This means that any project party or market maker wanting to deploy a new contract market on Hyperliquid must first face an annual threshold of about two million dollars.

Who will really deploy the new market?

Participants who can bear such costs can be roughly divided into three categories:

1. Popular New Coins (such as XPL, PUMP, etc.)

The pricing power for such projects lies with Binance, with expected high costs, and large market makers are incentivized to deploy ahead of time to gain a first-mover advantage in liquidity.

However, the number of such assets is extremely small, with only a few per year. Moreover, these cryptocurrencies are often actively launched by Hyperliquid itself, so there is no need for external costs to list the coins. 2. RWA (Real World Asset Tokenization) Project

The pricing power is controlled off-chain, while on-chain is merely a discrete market. Transactions mainly rely on attention-driven factors; although there are many projects, most of the trading volume is limited. 3. Binance Alpha / Futures Level Small Coins

It belongs to a discrete market, and unless multiple market makers share the costs, the deployment cost for a single market is too high.

For project parties or small active market makers, rather than paying high margin fees, it is more practical to choose a more realistic listing path, such as Binance Alpha or Bitget Futures.

The reason why the vast majority of small cryptocurrencies can engage in contract trading is due to the existence of Binance Futures, rather than a specific on-chain contract market. If project teams want to deploy markets using Hyperliquid, they not only have to pay high listing costs but also solve the market-making issue. However, major market makers typically do not take on such low liquidity projects, because what they want is trading volume, not “listing qualifications”. In addition, the current alpha market driven by retail enthusiasm (i.e., the logic of small coins skyrocketing) comes from a third type of project—however, these projects relying on the order book model are not feasible, as the inherent disadvantage of discrete markets is the lack of liquidity.

The ones truly motivated are the well-funded project parties or market makers who hold the initiative:

• They know the project can bring in high transaction fee revenue;
• Have control over the contract, able to supplement the project's internal盘生态；
• You can partially recover costs by brushing the volume yourself.

This type of project treats listing coins as a cycle of mutual investment in the ecosystem.

For small and medium-sized projects, it is entirely possible to bypass this high-cost mechanism:

Directly issue a permissionless AMM Perp (Automated Market Maker Perpetual Contract), where the project party locks the pool, recovers fees, and automates market making.

As long as the initial trading volume can be achieved, it can completely be regarded as a cold start channel, and later it can climb up to mainstream platforms such as Binance Futures.

In comparison, HIP-3 does not have significant advantages.

Hyperliquid aims to build an institutional-grade client relationship network like CEX. However, the VIP system of traditional exchanges is built around credit and lending conditions, rather than the “listing rights” itself. The listing logic of HIP-3 cannot replicate the credit system of CEX; it simply decentralizes and redistributes the “node listing rights”. From a mechanism design perspective, HIP-3 is very similar to Huobi's HADAX node voting listing mechanism from back in the day.

The difference is that HIP-3 outsources “voting for listings” to “decentralized governance.” However, historical experience shows that when the power to list tokens is tied to interests, bribery and gamesmanship among nodes become inevitable. HADAX ultimately failed due to the rampant “listing harvesting” and the lack of constraints and punishment mechanisms for nodes. Although the structure of HIP-3 is now cloaked in the guise of “decentralization,” its core incentive logic has not changed.

summary

On the surface, HIP-3 offers a decentralized governance mechanism for “open listing”; however, in essence, it resembles a closed club driven by interests with extremely high barriers to entry. From capital costs to liquidity logic, and market-making incentives, the real beneficiaries are still a very small number of resource-rich major players. The superficial decentralization is indeed “useful”—but only for those who can afford to play.