That squaring is what makes the payoff convex. On a daily perpetual contract, every greenback $HYPE features provides the identical quantity to your place. On HYPE², every further greenback of acquire in $HYPE pushes the index up by progressively greater than the final one did.
The analysis provides a concrete instance. A 20% improve in $HYPE interprets into roughly a 44% acquire within the HYPE² index, earlier than funding charges are counted.
Choices vitality, perp mechanics
Conventional choices give merchants convexity, however they arrive with baggage. You decide a strike value, select an expiry, and watch time decay chip away at your place.
Power Perps skip all of that. There isn’t a strike and no expiry, only a perpetual contract settled with hourly funding.
That design means every underlying asset will get a single order e book. As an alternative of liquidity being scattered throughout dozens of strikes and dates, everybody trading HYPE² meets in a single place.
The funding mechanism takes the place of expiry. Moderately than a contract dying on a set date, holders pay or obtain funding each hour, which retains the contract tethered to its index over time.
Paragon isn’t inventing the idea from scratch. The product builds on earlier analysis into energy perpetuals by Dan Robinson, Dave White, and Andrew Leone, and attracts classes from Opyn’s Squeeth, which utilized the identical squared concept to ETH.
The superb print on leverage
Convexity cuts each methods as soon as leverage enters the image. A squared index already strikes sooner than the asset beneath it, so stacking leverage on high amplifies that velocity additional.
The analysis flags a selected threshold. A 2× lengthy place on HYPE² will get liquidated after $HYPE falls by about 22.5%, and that determine doesn’t but account for funding charges.
The place the rollout stands
As of mid-November 2026, the rollout stays in its early phases, in accordance with the analysis findings. Paragon’s personal messaging describes the product as being examined.
The official website signifies {that a} HYPE³ market is both coming quickly or imminent. Cubing the value would push the convexity even additional, together with the chance profile that comes with it.
Paragon operates by means of HIP-3, the framework that lets builders deploy their very own perp markets on Hyperliquid. That construction permits experimental merchandise like this one to plug into present infrastructure reasonably than launching on a standalone trade.
What this implies for Hyperliquid merchants
Market makers could discover probably the most sensible upside. In line with the analysis, the design permits them to hedge HYPE² publicity utilizing the spot and linear perp markets already reside on Hyperliquid, all inside the similar venue.
