Trade.xyz’s Role in Hyperliquid

Coin Metrics State of the Network is an unbiased, weekly view of the crypto market informed by our own network (on-chain) and market data.

Key Takeaways:

• In August, Trade.xyz perp market volumes account for 55% of all Hyperliquid market volumes.
• AI and Compute equities and indices on Trade.xyz accounted for around 53% of Trade.xyz volume in July.
• The shift in volumes has led to Trade.xyz generating $5.0m in fees in the past month. Split 50/50 with Hyperliquid, a majority of earnings are used to buy back $HYPE from the open market and remove it from supply.

Introduction

Hyperliquid has averaged approximately $8.5B in daily futures volume over the trailing 30 days, representing around 4.6% of global futures volume. Perpetual futures contracts simplify gaining exposure to futures without expiration dates or managing underlying assets. Instead of trading options with expiration dates, perpetual contracts enable paying a small funding rate to keep positions open and have the futures price remain tethered to the spot price. Hyperliquid brings traditional finance operations such as a matching order book and low-latency trading on-chain and combines it with perpetual futures.

The Hyperliquid Improvement Proposal HIP-3 introduced 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 dependencies on Hyperliquid validators.

In this 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 can drive value to the HYPE token.

How Does HIP-3 Improve Hyperliquid

HIP-3 unlocked the creation of perpetual markets by independent builders. Previously, validators would vote and approve the creation of new perpetual markets. This creates delays and centralizes dependency on Hyperliquid validators.

With HIP-3, builders who stake 500k HYPE (~$27m) have the right to directly deploy three perpetual markets. After deployment, they may bid to create additional perpetual markets. HIP-3 uses a 31 hour Dutch auction with a floor of 500 HYPE (~$27k) for builders to bid to deploy the next market. After a builder wins an auction, the price doubles from the purchase price and resets for the next auction, linearly decreasing towards 500 HYPE until the next builder wins the auction. Proceeds from the auction are used to buy back HYPE tokens and remove them from supply.

The auction costs in addition to the slashable 500k HYPE staking requirement has created concerns over a centralized HIP-3 builder market where few are profitable. Trade.xyz has emerged as the largest HIP-3 perpetual exchange. With over $4b in open interest, it is contributing a growing proportion of volume and fees to the Hyperliquid ecosystem.

Source: Talos CM Market Data

Trade.xyz Emerges as a Dominant Builder

Trade.xyz has gained significant market share of Hyperliquid perpetual volumes. Since January 2026, Trade.xyz has facilitated over $460B or around 30% of total volume by Hyperliquid.

Source: Talos CM Market Data

There are currently 484 markets across Hyperliquid: 232 natively issued, 108 deployed by Trade.xyz, and 144 deployed by other HIP-3 builders. Over the last month, Trade.xyz has won and added 8 equity perp markets out of 23 auctions. Trade.xyz expanded its chipmaker markets with equities including GIGADEV and CXMT and added compute ETFs LYTE and NCLD. In August, Trade.xyz has overtaken the monthly volume of native Hyperliquid markets, generating ~55% of Hyperliquid’s volume.

Source: Talos CM Market Data

Builders can create duplicate markets, customizing leverage caps and oracles to provide alternative markets for traders. However, of the duplicate markets available, Trade.xyz captures nearly 100% of trading volume. This pressures smaller builders to differentiate through niche perp markets that Trade.xyz has not yet added.

Deeper Dive into Individual Market Analysis

Trade.xyz has focused on adding equity and commodity perpetual markets. Hyperliquid and Trade.xyz have been able to capture one of the hottest narratives - the AI/Compute trade. As traders explore commoditizing compute costs and building yield curves, Trade.xyz supports a variety of perpetual contracts related to AI companies and sector proxies.

Source: Talos CM Market Data

A basket of AI hyperscalers and chip manufacturer perpetuals has taken off on Trade.xyz and has generated over 53% of daily volumes in July. SK Hynix and Micron markets have each driven over 20% of volume within the basket of assets. SanDisk, DRAM index, and NVDA are the next most traded markets in the AI/Compute narrative.

While the AI/Compute trade has gained recent attention, examining Trade.xyz’s most popular daily markets helps illustrate the popularity of perpetual contracts, especially for traditional financial investments.

Source: Talos CM Market Data

Crude Oil, Silver, Brent Oil, a Nasdaq-100 proxy and the S&P 500 contracts are the five most traded perpetuals based on cumulative volume since January on Trade.xyz. Despite recent volume consolidation, traders remain able to react to events via 24/7 markets. After market-close and on weekends, spikes such as those seen in Crude Oil can be generated due to geopolitical tensions. In August, these markets account for ~30% of total Trade.xyz volume, down from a peak of 88%, highlighting traders spreading their attention across the new markets Trade.xyz lists.

Source: Talos CM Market Data

The development of perpetual contracts for pre-IPO equities also provides significant upside. The SPCX IPO generated over $1.3B in volume on Trade.xyz as traders speculated on the company’s valuation. Trade.xyz’s speed to add markets can capitalize on short-term opportunities and generate significant fees for itself and Hyperliquid.

What Fees are Generated and How Does this Affect HYPE?

Hyperliquid charges 2x the standard fees for makers and takers on non-validator-operated perp markets. At the moment, Trade.xyz is in Growth Mode which encourages platform adoption by reducing fees by more than 90%.

Trade.xyz generated $5.0m over the past month. These fees are split 50/50 with Hyperliquid who primarily use funds to buy back and burn HYPE tokens.

Source: Talos CM Market Data

Since January 2026, we see a weak, positive correlation between the HYPE token price and total Hyperliquid volume. Value accrual to the HYPE token is increasingly diversified. Growth in prediction markets, pre-IPO perpetuals, and USDC reserve income all contribute to valuing HYPE and the Hyperliquid ecosystem.

Hyperliquid’s aligned quote asset (AQAv2) introduces additional revenue for Hyperliquid. For all outstanding USDC on Hyperliquid, Circle will share 90% of revenue earned from underlying investments with Hyperliquid. As more perp markets are deployed with USDC as the quote asset, Hyperliquid will earn more revenue and use it for HYPE buy backs.

Conclusion

Trade.xyz is the leading HIP-3 builder by open interest and volume. This past month, a majority of perp volume has shifted from native Hyperliquid markets to Trade.xyz-listed markets. This is due to the available markets and popular trends – AI/Compute narrative, geopolitical tensions, access to pre-IPO valuations – that Trade.xyz provides.

If Trade.xyz exits Growth Mode, higher effective fee rates could increase fee generation and potential HYPE buybacks. A recovery in crypto-perp activity could provide an additional source of volume. Hyperliquid and Trade.xyz continuing to offer services and integrations that benefit the ecosystem can drive additional value to the HYPE token. Trade.xyz is capturing a growing audience accessing traditional financial investments using 24/7 markets.

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^{Disclaimer: The information herein is provided for informational purposes only. Talos Trading, LLC and its affiliates (“Talos”) does not give any representations or warranties in relation to the accuracy, validity, or completeness of the information of this material, including without limitation the factual information obtained from publicly available sources considered by Talos to be reliable at the time. Talos accepts no liability for any consequences of using the information contained in this material. Any opinions or estimates expressed herein reflect a judgment made by the author(s) as of the date of publication and are subject to change without notice. Neither this material nor any copy thereof may be taken, reproduced, or redistributed, directly or indirectly, without Talos’s prior written permission. Any views or opinions expressed are those of the authors and do not necessarily reflect the views of Talos. This communication does not constitute an offer to buy or sell, or a promotion or recommendation of, any digital asset, security, derivative, commodity, financial instrument, or product or trading strategy. This document and information are not intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.}

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