IOSG: The Expensive Ticket of HIP-3, A Moat That Can't Be Bought

Original Title: "IOSG Weekly Brief | HIP-3: An Expensive Ticket, A Moat That Can't Be Bought #348"
Original Author: Mario Chow, IOSG Ventures

Ten teams have registered their perpetual markets on Hyperliquid, locking approximately $40M of HYPE in the process. One of these teams accounts for 97.8% of the trading volume, and it has just seen a 44% drop in a single month. This article aims to answer what the other nine teams have achieved, with all figures sourced from the blockchain rather than announcements.

Every figure in this article is directly sourced from Hyperliquid's public API: perpDexs, metaAndAssetCtxs, daily candleSnapshot covering all 519 registered assets, delegatorSummary, userNonFundingLedgerUpdates, and clearinghouseState{dex}.

"30 days" refers to the complete UTC calendar days from August 15, 2026, to September 13, "the previous 30 days" refers to July 16 to August 14, and "7 days" refers to September 7 to 13. HYPE is priced at $79.73. The routing data in Section 7 is sourced from Flowscan, as the trading volume from the builder code cannot be aggregated from the public API.

Summary

• HIP-3 has once again become a minority on Hyperliquid. The markets deployed by builders accounted for 25.8% of perpetual trading volume in the last 30 days, down from 57.1% last month. This change is primarily due to the denominator: the core trading volume has more than doubled, while HIP-3 itself is on a downward trend.

• The leader is contracting. Trade[XYZ] had a trading volume of $64.60B in 30 days, down 44.2% month-on-month, with the 7-day average dropping from a peak of $5.36B/day at the beginning of August to $2.01B/day. This decline is approximately half attributable to the storage and AI sectors' drop in real market transactions, and the other half to this venue itself. It has not outperformed the core order book since August 18.

• Entropy (io) led for a full week in a head-to-head market before retreating. Its share on Nebius has shown a trajectory of 8.7%, 53.1%, 20.4% over three consecutive weeks, with its own trading volume also declining for three weeks. The contrary signal is in the positions: open interest has risen against the trend by 37%, reaching $51.4M.

• Settlement assets remain a lifeline, with records still at 6 to 6. All venues that settle with non-USDC stablecoins have ceased trading; those that remain are all using USDC.

• Asset listings cannot be maintained. At the current auction floor price, an asset is approximately $39,900, and buying all of Paragon's online markets would cost around $1.04M, equivalent to two weeks of Trade[XYZ]'s fee income.

• No one is competing on price. All stock-like venues are running on deployerFeeScale = 1.0 with Growth Mode, with actual rates of Trade[XYZ] 0.427 bp and Entropy 0.400 bp. All venues outside the leader, regardless of survival, have collectively earned only $747,000 in deployment shares over their lifetime.

The Ten Deployers Present

▲ Daily trading volume of Trade[XYZ] and all its challengers below it. The vertical axis scale of the two graphs differs by about 100 times.

"Transaction count" is the sum of the n field in the daily K-line within the window. The public API cannot produce the number of independent traders.

Historically, only ten have registered perpetual DEXs, and there has yet to be an eleventh. Four are trading, five have stopped, and one has never opened. Trade[XYZ] accounts for 97.8% of HIP-3's trading volume over the past 30 days and 97.6% over the past 7 days.

The situation of the challengers can be summed up in a few sentences. Entropy made $1.03B in 26 days across six online markets, relying on its self-built oracle rather than an asset list. It is the only venue that has genuinely led in a market that also quotes the leader. Paragon is the only challenger that resembles a market, with 26 online markets and a tail distribution that is open. In the case of Trade[XYZ] entering five of its targets at once, it still saw a 49.9% increase that month. Markets by Kinetiq bought 23 targets, with 95% of the volume concentrated in two index perpetuals. HyENA has ended: the market has been delisted, open interest has dropped to zero, and it has earned $33,414 in its lifetime.

The Share of HIP-3 and Why It Is Easily Misinterpreted

▲ The proportion of HIP-3 in Hyperliquid's perpetual trading volume, calculated daily.

The 7-day average crossed 50% in mid-July, peaked close to 57% at the beginning of August, then fell below 30%, and has not risen since August 20. On August 18, the trading volume of one builder surpassed the entire validator set of Hyperliquid. It has not achieved that since.

This ratio actually speaks to its denominator. The numerator is a stock market, while the denominator is a crypto market, and the volatile leg is on the crypto side. The 57% was read during a quiet crypto period, while the 26% was read when the same stock market faced a market surge, during which the core perpetual volume rose by 117%. In the last seven days, the proportion even dropped back to 28.6%, while Trade[XYZ] continues to contract. Before citing any HIP-3 proportion, clarify what crypto was doing during that period.

What truly matters is the absolute volume, and the absolute volume is deteriorating. Trade[XYZ] had a trading volume of $64.60B in 30 days, down 44.2% year-on-year, with the 7-day average dropping from $5.36B/day at the beginning of August to $2.01B/day, with its own market retracting by 62%. The largest market, SK Hynix, dropped to $8.50B. The declines in both legs of the proportion are real. The following section will explain that most of HIP-3's leg is not a competition issue.

The Main Reason for the Decline in Trading Volume Is the Storage Sector Going Quiet, Not Share Loss

Reading the 44% drop as "the leader is losing" is the easiest explanation, but the data does not support it. The verification method is simple: if the decline is due to competition, we should see the targets themselves continuing to trade, just that the portion captured by Trade[XYZ] has decreased. What actually happened is that the targets themselves have quieted down.

There has been no sell-off. Based on the peak trading volume at the beginning of August, the price of every major market in the order book today is higher.

What has truly collapsed is how far these targets can go in a day, and the venue's trading volume has almost followed suit.

All of the above are based on business days, as the stock market is closed on weekends while Trade[XYZ] continues to trade, which would significantly exaggerate this relationship if weekends were included. Looking only at business days, the daily average volatility of the storage sector and the venue's daily trading volume has a correlation coefficient of +0.47 over a sample of 45 days. Gold is a natural control group: it is the only major market with rising intra-day volatility this month, and its trading volume has also increased. Silver is an exception that does not fit this pattern.

However, volatility is just a proxy variable. A more direct test is to compare the real stock trading volume of the same nine targets, and the answer is: the traditional market only explains about half.

The real trading volume of the storage and AI sectors has indeed collapsed by 25.7%, and that half is real. But XYZ dropped by 49.7%, nearly double. The additional 24 percentage points are not provided by the industry.

Moreover, the largest gaps are precisely in its core: SanDisk -26.0pp, Micron -25.4pp, Intel -21.5pp, SK Hynix -17.2pp. It has actually outperformed the real market on Nvidia (+36.5pp) and Nebius (+18.6pp), but those two markets are quite small.

Competition cannot explain this gap either. Entropy's total SanDisk trading volume over 30 days is $523M, while XYZ's own SanDisk market has decreased by $6.14B, so the challengers have at most captured about 8% of that.

The rest seems more like capital rotation. During the same period, Hyperliquid's core perpetual trading volume rose by 117%, while HIP-3 was declining, and the total volume of both sides still increased by 26%. Money has not left Hyperliquid; it has merely rotated from the stock market back to the crypto market.

A scale anchor. Over the same 30 days, these nine targets traded $2,004.7B across their respective exchanges, with XYZ trading $23.5B on them, accounting for 1.2%. The total of XYZ's 104 markets at $64.60B only corresponds to 3.2% of the real trading volume of these nine names. The highest penetration rate is 9.1% for SK Hynix, while the lowest is 0.1% for Broadcom, and this curve itself illustrates what this business is: assets with high penetration rates that crypto-native traders cannot access, while widely available US large-cap stocks have low penetration rates.

So this decline is due to two factors: about half is the sector's beta, and the other half is its own. The calculations in Section 6 only consider actual trading volume, regardless of where the volume comes from, so the transaction fee aspect is unaffected. However, it is important to look at these two halves separately: the sector's half will return, but the venue's own half may not.

Reshuffling and the Only Predictive Variable

▲ Daily trading volume of each HIP-3 venue, on a logarithmic scale. The dashed line represents settlements using non-USDC stablecoins, while the dots indicate the last trading day.

As of today, six venues have stopped trading, and the variable that separates them is not asset selection, team quality, or historical trading volume, but the stablecoin used for settlement.

The mechanism itself is quite simple: traders must first exchange for a specific stablecoin to place their first order, and they are reluctant to do so. Felix is the clearest example. The small transaction fee incentives that initially supported USDH were wiped out as soon as Growth Mode launched, leaving this settlement asset with only friction.

Kinetiq serves as a control experiment. The only operator that survived after shutting down did so by eliminating the USDH venue and reopening the identical index product on USDC. Historical trading volume does not predict anything: dreamcash had $19.51B, more than the entire June batch combined, yet it still stopped. Entropy entered in August with more funds than any previous entrant, and there was no hesitation in choosing USDC.

What Truly Determines the Settlement Asset, and What Does Not

Reading USDC's sweep as a protocol arrangement is natural, but Hyperliquid's own documentation states the opposite. Under Aligned Quote Assets v2 (enabled on USDC in late August, with Coinbase as the treasury deployer and Circle as the technical deployer), approximately 90% of the cost-adjusted reserve income from USDC on Hyperliquid is allocated to the protocol and enters the Assistance Fund. Interest is calculated over 30-day periods, with payments made on the 8th day after each period ends, so the first payment will not arrive until early October, and not a penny has been received yet.

AQAv2 explicitly does not favor HIP-3. The documentation states clearly: there are no preferential treatment regarding transaction fees or trading volume, and other priced assets continue to be supported on HIP-3 perpetuals. The benefits in fee rates belong to AQAv1, which provides lower taker fees, higher maker rebates, and higher trading volume counts for collateral assets, while USDC is not included in AQAv1 and cannot structurally enter because that tier requires stablecoins to be exclusive to Hyperliquid. The real privileges granted by AQAv2 point to event contracts and validator-operated perpetuals, and further upgrades are needed; this is not the market measured in this article.

Thus, the matter of settlement assets is determined by liquidity and a one-time corporate action, not by fee design. USDH ceased operations on July 17, 2026, with holders redeeming at a 1:1 ratio for USDC, and Coinbase acquiring its brand assets while becoming the treasury deployer for USDC. Today, in the stablecoin supply on Hyperliquid, USDC accounts for 98.3%, USDT 1.2%, and the remnants of feUSD, USDe, and USDH each about one thousandth. A venue settling with other assets has not suffered in terms of fees. It is requiring its traders to leave the only pool with depth.

Estimating the scale of AQAv2 is predicated on the fact that the official has never disclosed any numbers. USDC on Hyperliquid stands at $6.77bn, with SOFR around 3.6%, and based on a 90% revenue share, this line roughly points to about $200M annually. Third-party estimates based on a $5bn base fall between $135M and $160M. What remains uncertain externally is the cost adjustments in AQA interest rates, which are reported by a validator oracle whose level is not public, so every number here is an estimate rather than a measurement.

HyENA fills in a second mechanism. Because it is tied to crypto assets, it is blocked from Growth Mode, quoting about 5 bp on the same targets, while its core market quotes about 3 bp, resulting in poorer transaction quality. It spent about $0.88M on asset positions, earning a lifetime total of $33,414.

A halt does not equal an exit. HyENA has delisted all 25 markets, with open positions reduced to zero, but its staking remains at 508,915 HYPE, approximately $40.6M, and twelve days have passed without initiating any withdrawals. Felix and dreamcash have both fully reclaimed their stakes, now reading zero, while Ventuals has only 7,967 left. A venue that has delisted all markets but retains $40M staked on-chain is either slow to liquidate or is occupying this deployment position for something else.

What Ventuals ultimately succumbed to deserves a separate discussion, as the next generation of products is designed around this issue. Insufficient liquidity is merely a symptom; the mechanism lies in funding rates: the pre-IPO perpetuals lacked a convergence anchor, and funding rates once soared to an annualized rate of about 8,700%. Regardless of whether the marked price was correct, longs would be liquidated. Entropy capped the annualized funding rate around 10% and settled to its own marked price's TWAP, rather than chasing an external price. Its contract design can be read as a checklist for addressing the specific cause of Ventuals' demise. When looking at any pre-IPO market, first check the funding rates and settlement design, then look at the asset list.

The Composition of Trade[XYZ]'s Market and Why It Does Not List OpenAI

▲ The markets with the highest trading volume on Trade[XYZ] over 30 days.

The top ten markets account for 66.7% of the market share, with the tail outside the top six alone accounting for $32.4B. Nvidia accounts for 3.5%. The combined total of Apple, Tesla, Alphabet, and Microsoft is 3.3%, only a quarter of SK Hynix. The standard narrative around tokenized US stocks often highlights these American giants, but they are not the business here.

Trade[XYZ] actually operates a 7×24 venue focused on storage and AI capital expenditure trading, along with crude oil, metals, and index products: Korean and Japanese semiconductors, a synthetic DRAM index, SpaceX, its own XYZ100 basket, and a licensed S&P 500. Its territory includes assets that crypto-native traders cannot find elsewhere at three in the morning. This is also the territory that Entropy chooses to attack, with entry points being SanDisk and Nebius, not Apple.

Why Not List OpenAI

The most intuitive answer, that it avoids unlisted companies, is incorrect. Pre-IPO is actually one of its better-performing businesses. Just SpaceX alone had $2.80B in 30 days, accounting for 4.3% of the market share, ranking ninth. Following that are Yushun at $511M, Changxin Storage at $317M, Zhipu at $156M, MiniMax at $92M, and SHEIN at $27M, with Changjiang Storage already registered and pending issuance.

These names share a common trait: they all have observable secondary transaction prices and known share counts. SpaceX regularly conducts tender offers, providing clear per-share prices; these Chinese companies have active pre-IPO gray markets in mainland China, and share counts can be obtained from business records and financing rounds. Therefore, this venue can treat them like other assets and quote per share.

OpenAI and Anthropic have neither. Their secondary transactions are wrapped in SPVs, and what is traded is a claim on a fund share, discussing an overall valuation negotiated rather than a specific per-share price. If forced to quote per share, it would be like creating a denominator out of thin air. The bottleneck lies here; it is an issue of quoting conventions, not willingness. Entropy's solution is simply not to quote per share but to quote the company itself, with 1 contract = $1bn market cap, calculating Anthropic at nearly $2.17tn and OpenAI at about $1.53tn based on the current mid-price.

However, this does not constitute a moat. If the leader wants to add a market cap-priced asset, it can do so for about $39,900 at any time. Moreover, its own roadmap points elsewhere: it has 16 registered but unused assets in the queue, including uranium, aluminum, the US dollar index, VIX, corn, wheat, TTF, Korean won, Indian Nifty, Brazilian Ibovespa, Ibiden, and KSTR, plus Changjiang Storage and H100. This is macro and bulk, not cutting-edge AI laboratories.

One structural detail worth noting is that Trade[XYZ] has not set up an oracleUpdater, meaning it does not push marked prices using its deployment key; whereas Entropy and Felix both point to the same third-party updater 0x94757f8d.... Entropy has publicly stated that RedStone is the source of price data for its Anthropic market, which explains why these two unrelated venues share the same update address, although there is no label for this address on-chain. Self-built oracles are fine for assets with reference prices, but when marked prices must be "constructed," the nature changes, and constructing marked prices is precisely the business that Entropy has chosen.

Direct Confrontation and Entropy's Lead That Week

▲ Weekly trading volume of Nebius and Entropy's share in it.

Currently, nine assets are simultaneously active on two HIP-3 venues. Each venue no longer occupies a separate, non-overlapping market; any name worth listing twice has become the norm.

The Competition Cuts Share, Not Market

Trade[XYZ] had registered five core assets of Paragon but did not activate them until August 18, when all were opened in one day, and today it leads in all five. Filling this gap cost about three days' worth of transaction fee income, completed in one afternoon. Whether those assets were a deterrent or were originally queued for launch cannot be determined from on-chain data.

What can be determined is the result. A week later, Paragon still holds 20% to 25% of four of these five assets, and the overall trading volume increased by 49.9% that month. The market depth of Trade[XYZ] is about 11 times that of Paragon, which only accounts for 8.2% of this pair, yet Paragon's own trading volume nearly doubled during the same period. The leader did not take volume away from the challengers; it expanded the market around them. Entering a market and owning a market are two different things.

Entropy Leads on Nebius for a Week, Then Returns

For one week, Entropy's trading volume on Nebius indeed surpassed that of Trade[XYZ], something the HIP-3 challenger had never achieved before. In the following week, the leader's Nebius market depth increased by 61%, while Entropy dropped by 63%, bringing the challenger back to one-fifth of this pair. SanDisk tells the same story, just quieter: Entropy's share has roughly hovered around 13% in recent weeks, averaging 8.5% over the entire 30 days.

So this lead is real, but it lasted only a week. The honest interpretation is that Entropy proved it could penetrate a market where a leader is actively quoting, but it has yet to prove it can hold its ground. Its total trading volume has fallen for three consecutive weeks, from $417M to $254M.

Reverse signals come from inventory. While weekly trading volume fell 39% from its peak, Entropy's open interest actually rose by 37% to $51.4M, with one asset from Anthropic accounting for $29.9M. Trading volumes that are inflated will offset each other and leave no inventory, so while trading shares decline, open interest continues to accumulate, indicating real holdings rather than mere churn. These two facts point in opposite directions; the real focus should be on this tension itself, not on any single number.

The volume here needs to be discounted. Entropy has no tokens and has not confirmed any airdrops, but it can already see the pointsMultiplier parameter in the backend, and its leaderboard page states "coming soon," so part of the traffic is driven by expectations rather than product usage, and these two cannot be separated externally. The scale also needs to be highlighted: Entropy's volume is about $1.0B in a month, while Trade[XYZ] is at $64.6B, making it 1.6% of the leader's volume. It wins specific battles, not the entire category.

The registered assets waiting to go live reveal the next steps. Entropy holds EWY, SBE, TCNT, and a DRAM index. The DRAM index is Trade[XYZ]'s fourth-largest product, while EWY is from South Korea. The next confrontation seems to be aimed directly at the leader's core territory, rather than seeking another uncompetitive pre-IPO name.

⚠️ Two Counting Rules

Only online markets are counted. HIP-3 deployers often register assets long before activation; these assets will return oracle markPx, but midPx will be null, isDelisted will be true, open interest will be zero, and there will be no K-line history. Trade[XYZ] has 16, mkts 19, Paragon 9, and Entropy 4. HyENA's 25 are another matter, as they were activated and then deactivated.

Code strings do not equal assets. para:STX is Seagate, with a mid-price of 799; the core STX is Stacks, with a mid-price of 0.27. Relying solely on codes would create a fictitious tenth confrontation market, which does not exist. Always verify the mid-price before pairing.

Economic Account: The Cost of One Venue vs. Revenue Across the Entire Layer

No One Competes on Price, as Rates Have Hit Bottom

Everything hinges on two parameters for each asset, both publicly available in metaAndAssetCtxs: growthMode and deployerFeeScale. The all-inclusive rate is base × (1 + s), where base is the standard perpetual fee rate table, and s is the deployer coefficient, which can be set from 0 to 3.00, capped at 1.00 in Growth Mode. The deployer takes s / (1 + s), so when s = 1.00, they split it evenly. Growth Mode then cuts at least 90% off the all-inclusive figure, provided the market does not overlap with the perpetual operations of validators, excluding crypto assets and crypto indices.

All stock venues have independently converged to the same configuration: maximum deployer revenue share, with Growth Mode activated. Entropy entered with differentiated products and venture capital without undercutting prices. The only venue not in this configuration is the one that has just ceased trading.

Without relying on any aggregator, deployer revenue can still be accurately calculated. Fee income accumulates in the fee-receiving address's sub-account: the clearinghouseState with the dex field can read the unallocated balance, while transfers appear in userNonFundingLedgerUpdates, where the sourceDex equals the venue name in the send. Transfers are irregular, so the volume must be measured between two transfers. Since the transfer on August 27, Trade[XYZ] has accumulated $1,380,592, corresponding to a trading volume of $32.30B, or 0.427 bp, approximately $79,000 per day. Entropy has never made a transfer, so its accumulated fees can be read directly: $1.036B in trading corresponds to $41,468, or 0.400 bp.

Two Expenditures, Completely Different Natures

Staking is the most daunting number, but it will return. No one takes this money away. It is entrusted to validators, continuously generating staking rewards, and will be returned in the same form upon exit. It locks for at least 183 days since deployment and can be penalized by weighted validators for malicious market operations (such as pushing bad oracle prices), and can still be penalized during the 7-day unstaking queue, so a clean exit takes at least around 190 days. Felix and dreamcash have fully withdrawn, and the current reading is zero.

Current staked amounts: Entropy 500,973, Paragon 500,712, HyENA 508,915 (suspended trading but not unstaked), Kinetiq 588,489 (one stake covering both km and mkts), Trade[XYZ] 500,488 plus another 500,269 at a different address. ABCDEx has only 1,004 HYPE, never staked.

The money for asset positions is what no one mentions and cannot really be returned. The first three assets of any perpetual DEX are free; after that, each additional market must be purchased in a 31-hour Dutch auction using HYPE, with the opening price being double the last transaction price, linearly decaying to a bottom price of 500 HYPE. The auction for the event on September 14 opened at a bottom price of 500 and ended at 500, so one asset position costs about $39,900, and the demand for asset positions has fallen from a transaction price of 582 HYPE a week ago.

The last column is the key. Trade[XYZ] can cover all asset bills with about eight weeks of fees. Every challenger except Entropy requires more time than HIP-3 has existed; Entropy can pass because it bought seven asset positions instead of thirty.

Time will continue to amplify this asymmetry. Pausing a market is free and reversible; paid asset positions can be archived and reopened, and those "waiting to go live" assets come from this. Reserve positions accumulate based on historical deployments, with the formula being 7 + 0.2 × past auction deployment numbers, so Trade[XYZ] has about 30 that can be used immediately, while new entrants have only 7. A venue opening today, planning to create 20 markets, can list 10 at once, while the rest must queue in the auction, the fastest being one every 31 hours. Entropy's answer is not to play this rhythm: it only launched five markets and made each one count.

Staking Yield Trap

Except for Entropy, every challenger that earns money from passive staking tickets earns more than from operating the exchange. Paragon's lifetime deployer share is $64,281, while $39.87M in staking at about 2.2% yields approximately $877,000 annually, a ratio of about 14 times.

This is not comforting. That yield is newly issued HYPE from the protocol's future emission reserves, essentially inflation rather than income, a dilution return on a position that is forced to be held, with the valuation unit still being the asset that the operator passively longs. HYPE has dropped 30%, resulting in a loss of $12.0M on this staking, exceeding ten years of earnings. Over the past eight days, HYPE has fallen from $88.37 to $79.73, thus reducing each staked amount by $4.3M.

How Big of a Business Can This Fee Pool Support?

Growth Mode pins the effective fee rate around 0.4 bp, with deployers taking half. Trade[XYZ] holds 97.8% of the market share, with an annualized trading volume of about $786B, leading to an annual deployer share of about $29M. Rather than being a ceiling for the leader, this is essentially the total bonus across the entire venue layer under the current trading volume and fee rate floor.

Outside of the leading venues, there is approximately $167M in HYPE today, and each of these venues, regardless of their fate, has collectively earned only $747,000 in deployment fees over their lifetime. When placed alongside a $14M seed round, this arithmetic illustrates that under the current trading volume and fee floor, the HIP-3 operators cannot rely on trading fees for valuation. The value for challengers must come from elsewhere—tokens, front-end, customer relationships, or products that the protocol has yet to price.

What Can Truly Be Sustained

HIP-3 has intentionally commoditized most of what a venue could originally sustain. Staking can be bought, the underlying can be bought, the fee floor is shared, and even distribution is shared, as every HIP-3 market can be accessed from the same front end.

The useful filtering question is not "What assets do you want to list?" because assets can be bought. Rather, it is "What do you have that the leader would pay for with an asset position?" Among all the venues that have operated on HIP-3, only one has a clear answer to this question, and its answer is a set of oracles combined with a settlement design, not an asset list.

Entropy is the exception worth noting accurately because the answer does not lie in the underlying. It was founded by researchers and traders from Citadel Securities, Optiver, Millennium, and Polymarket, and this bench is reflected in two areas. One is the order depth present on the first day of launch, which truly impressed Nebius. The other is the funding rates and settlement design, which read like a direct response to the death of Ventuals. Its $14M seed round was led by Ribbit Capital, whose main focus is on retail brokerage and fintech distribution, not DeFi, indicating an ambition to hold onto customers rather than just exploit a protocol. A point to note regarding the name: Entropy Advisors, which is deeply tied to Arbitrum DAO, and the custodial startup called Entropy backed by a16z are completely different companies, and no relationship with Hyper Foundation should be inferred from the name.

When viewed together, this track still appears thin. A company that is shrinking accounts for 97.8% of the trading volume. A circle of challengers holds $167M in HYPE, which has resulted in a total of $747,000 in historical fees among them. The only team that can truly quote prices has just demonstrated its ability to capture a market for a week but cannot sustain it.

A more straightforward alternative is to take the protocol's half of the fees instead of the operator's half; it has no lock-up, no risk of forfeiture, and no operational burden. However, it is also not the mainstay of Hyperliquid's perpetual fee base, and it has been proven that a HIP-3 share exceeding 50% is an illusion during periods of low crypto activity, not a trend.

Routing Layer and Its Actual Traffic Reach

Builder code is the closest thing to "distribution business" on HIP-3. Front ends mark the orders they send out for themselves, earning a builder fee without needing to post collateral. Flowscan has counted 819 such marks.

The traffic they encounter is indeed not much. The routed trading volume is approximately $52.6B, accounting for about 9% of HIP-3's all-time $587B; in the last 30 days, it was about $5.3B, corresponding to $66.09B, around 8%. Over 90% of the traffic does not have front-end markings, which is exactly how a market dominated by market makers and API traders should look.

The denominator in the fourth column is the $5.30B routed by builder code over the last 30 days, not HIP-3's $66.09B trading volume. If we use the latter, even the largest, CoinDCX, accounts for only 0.7%. The ten companies in the table collectively account for 59.7% of the routed volume, while Flowscan has counted a total of 819 builder codes, leaving the remaining 40% to be divided among the 809 at the tail end.

Two things in this table are worth highlighting. Entropy's $423M routed volume all occurred in the last 30 days, while during the same period, its own venue traded $1.03B, meaning that about 40% of the market came from its own controlled front end. Ribbit's ambition behind that round of retail brokerage is reflected in the data, rather than just remaining in press releases, and this is a business distinct from "being a deployment party."

The other lesson is from dreamcash, which is cleaner. Its venue has been dead since July 2, with its own market readings at zero, yet its builder code still routed $17.3M in the last 30 days, totaling $3.54B. The deployment party business and the front-end business can be cleanly separated, and only one of them requires $40M to enter.

There is an easily overlooked counting pit on third-party dashboards. Venue rankings usually default to cumulative trading volume, so a venue that stopped operating months ago may still appear to have a significant share. Dreamcash reads 3.3% of HIP-3's trading share in the all-time view, while in any recent window, it is $0. Before quoting any share, confirm which window it is calculated from.

Thus, the truly noteworthy front ends are mostly not deployment parties. Coinbase announced a simplified perpetual interface within wallets on September 12, powered by Hyperliquid, covering crypto, tokenized stocks, and prediction markets, aimed at markets outside the U.S. Kraken's parent company is also discussing integrating Hyperliquid's related perpetuals into a regulated U.S. venue. Neither will be betting that $500,000 HYPE.

Conclusion: It’s Hard to Be Optimistic About Another HIP-3 Deployment Party

Putting all of the above together, a new HIP-3 venue faces the following set of numbers.

All HIP-3 trading volume outside of the leader totals $1.49B over 30 days, annualizing to about $18.1B. Based on the measured 0.400 bp, that results in a $725,000 deployment fee to be divided among four venues. These four are currently holding about $167M in HYPE. The same amount of money, if passively staked at 2.2%, would yield $3.67M in a year.

In other words, the money made by operating these exchanges is about one-fifth of what the same funds would earn if staked in place.

This is not an undeveloped market but one that has already been priced close to zero, as reasons outlined in previous sections are measurable. An asset position is $39,900, so nothing can be sustained; the fee floor is shared, so there is no price to lower; distribution is also shared, and the builder code only touches 9% of the traffic; settlement assets have already converged to 6 to 6 in USDC, and AQAv2 explicitly does not give HIP-3 any fee bias, so the protocol has no intention of subsidizing this layer.

A more challenging aspect is the ceiling. XYZ, with a 97.8% share and every structural advantage, has only achieved a real transaction of 1.2% on the nine names it quotes, and its relative share in core storage assets is still declining. A new entrant faces not "the leader is too big" but "the leader is already small and still shrinking."

The only exception remains as previously stated: a right that others cannot buy, a set of oracles that others cannot produce, or a funding rate and settlement design that can survive in a thin market. Entropy is the only one that fits, and it was pushed back after leading for a week. An asset list is not the answer; this point is now supported by two independent sets of data saying the same thing.

What Could Change This Judgment

• Entropy can sustain a confrontational market for a month instead of a week and maintain a share of Shandi rather than drifting around 13%. A decline in trading share while open interest continues to accumulate is the most noteworthy signal, as it is more reliable than trading volume.

• Entropy's DRAM index and Korean assets go live. These two directly target the core territory of the leader, rather than being another uncompetitive pre-IPO name, and the result would be a much cleaner test than Nebius.

• The terms of the tokens can make the equity calculations work. The fee calculations do not work, and the tokens do not exist today.

• The pre-IPO sector can continue. Anthropic's market has decayed after the first week, and OpenAI opened at $5.3M a day, now around $4M. As long as one stabilizes, this becomes a category rather than a one-time listing trend.

• The first payment of AQAv2 lands in early October. That will be the first time to observe the real scale of the protocol's USDC revenue line, to compare with the current third-party estimated range of $135M to $200M.

• The fee floor loosens. Hyperliquid signaled in early August that subsequent upgrades would allow HIP-3 deployment parties to raise fees by up to 3 times per individual asset, effectively reversing the discounts of Growth Mode. No timeline has been given, and every number in Section 6 is built on the current floor.

• A licensed market is established. HIP-3* was announced on September 3, as an optional on-chain whitelist allowing deployment parties to restrict which wallets can trade in a certain market, aimed at compliance and institutional access, currently only in the testnet. This is the first mechanism that could make "access rights" rather than "assets" a scarce item.

• A team holding exclusive data or index authorization, with assets that indeed have 7×24 native crypto demand, emerges. This remains the only configuration where the logic of seizing positions completely fails.

• Evidence shows that the leader's trading volume cannot sustain after the end of Growth Mode. Its measured 0.427 bp is only about one-tenth of what the same market should receive at standard rates; if this exemption is burdensome, then the leader's stability is not as high as the share indicates.

• HyENA unstakes its 508,915 HYPE, confirming that this venue has ended rather than being dormant.

Limitations

• The argument for seizing positions is based on measured shares, but the motivation belongs to inference. Five assets launched on the same day can also be interpreted as a pipeline that just happened to finish on that day.

• The judgment on Entropy is based only on 26 days of data. Nebius's lead and subsequent reversal are both readings from a single week and a single medium-sized asset, neither of which should be treated as established conclusions going forward.

• Team backgrounds and funding rounds come from company announcements and media reports, not verifiable on-chain information.

• The volatility conclusions in Section 2 are based on correlations from a sample of 45 working days, not causal decomposition. Trading volume and actual volatility may also be driven by the same factors, with the most direct candidate being the cooling of overall AI capital expenditure trading.

• The number of transactions does not equate to the number of traders; public APIs cannot produce independent traders.

• The capital return-related figures are calculated based on HYPE at $79.73 and a 2.2% annualized staking rate, the latter being a protocol parameter rather than a contractual commitment, and it will decrease as the total network staking amount increases.

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