$4 Billion Open Interest: HIP-3 Dominance Raises Questions About Market Competition

Hyperliquid's HIP-3 markets have reached a new milestone in open interest, exceeding $4 billion for the first time. This marks a significant increase from just four weeks ago, when it stood at $3.67 billion, representing a growth of 9.8%. Looking back to the start of the year, the figure was a mere $259.33 million, showcasing an astonishing 1,454% rise in less than eight months.

The timing of this milestone is particularly noteworthy, as it occurred over the weekend when the Nasdaq and CME were closed. This means that traders carrying leveraged positions on equities, indices, or commodities during this time were doing so through HIP-3. The platform allows builders to launch perpetual markets for crypto, individual stocks, indices, commodities, and FX by staking 500,000 HYPE tokens.

Talos had previously highlighted the trend of traders using these markets outside US market hours, with nearly half of S&P 500 perp volume and over 60% of oil perp volume occurring during this time. The $4 billion open interest mark is a clear indication that this behavior is ramping up rather than being a one-off occurrence.

The dominance of HIP-3 in the market is evident, with one deployer accounting for a staggering 99.4% of the $4.03 billion on August 8. The rest of the field splits roughly $26 million between them, with mkts at $12.37 million, para at $8.20 million, and hyna at $5.42 million.

The growth of HIP-3 has raised concerns about the lack of competition in the market, with ICE's CEO Jeff Sprecher already approaching the CFTC to request a level playing field. The argument is not that on-chain perps are inherently dangerous but rather that two venues offering similar exposure operate under different rulebooks. As demand for leveraged equity and commodity exposure continues to grow, the question remains: how long will a single unregistered operator be able to supply it?