HIP-1 & HIP-2: Spot Trading on Hyperliquid

HIP-1 is Hyperliquid's Native Token Standard — the protocol's mechanism for creating and listing tokens directly on the L1 order book. Think of it as Hyperliquid's equivalent of ERC-20 on Ethereum, but with a key difference: every HIP-1 token is immediately tradeable on the native spot order book with full order book depth, not just swappable through an AMM.

To deploy a HIP-1 token, a creator must win a Dutch auction. The auction starts at a high price and decreases over 31 hours until someone bids. The winning bid is paid in HYPE, and those HYPE tokens are burned, creating deflationary pressure on the HYPE supply. This mechanism serves as a Sybil resistance and spam prevention tool — it costs real money to list a token, which filters out low-effort projects.

Recent auction clearing prices have varied significantly based on market demand, from thousands to millions of dollars worth of HYPE. High clearing prices during bull markets reflect strong demand for token launches, while lower clearing prices during quieter periods make launches more accessible.

HIP-2, called "Hyperliquidity," solves the cold-start liquidity problem that plagues every new token launch. When a HIP-1 token is deployed, HIP-2 automatically places a grid of buy and sell orders around the current price with a 0.3% spread. These orders refresh every 3 seconds, providing continuous baseline liquidity without any human market maker.

This is a significant innovation. On most DEXs, a new token launch means zero liquidity until market makers or liquidity providers manually show up. HIP-2 ensures that from the moment a token is listed, there are orders on both sides of the book at reasonable spreads. This makes new tokens immediately tradeable rather than requiring days or weeks to bootstrap liquidity.

The liquidity provided by HIP-2 is backed by the token creator's initial liquidity deposit. The system algorithmically manages this capital, placing and adjusting orders to maintain the 0.3% spread grid. While HIP-2 liquidity is not as deep as what a professional market maker provides for major assets, it provides a functional baseline that organic market makers can build on top of.

Hyperliquid's spot trading fees follow a tiered structure based on your trailing 14-day volume. The maker fee (for limit orders that add liquidity) starts at 0.02% and decreases to 0.005% at the highest tier. The taker fee (for market orders that remove liquidity) starts at 0.05% and decreases to 0.015% at the highest tier.

Volume is weighted 2x for spot trading — meaning $1 of spot volume counts as $2 toward your fee tier calculation. This weighting makes it easier to achieve higher fee tiers if you are actively trading on the spot market.

Builder codes (referral codes) provide an additional fee discount on top of the tier-based rates. Using a code like HIPERWIRE gives you a 4% discount on all trading fees. For active spot traders, the combination of volume tier discounts and referral code savings can meaningfully reduce costs over time.

Hyperliquid's spot market differs from its perpetual market in several ways. Spot trades involve actual token transfers — when you buy HYPE/USDC on the spot market, you receive HYPE tokens in your Hyperliquid wallet. Perpetual trades are contracts that track a price without transferring the underlying asset.

Spot positions have no funding rates, no liquidation risk (since there is no leverage), and no expiration. This makes spot trading suitable for longer-term holdings where you want actual token exposure. Perpetuals are better for leveraged speculation, hedging, or short-term directional trading.

Both spot and perpetual markets share the same HyperCore infrastructure, meaning they benefit from the same speed (sub-second finality), low latency, and zero gas fees for trading. The experience is seamless — you can toggle between spot and perpetual trading in the same interface.

HYPE is by far the most liquid and actively traded spot asset on Hyperliquid. The HYPE/USDC pair has deep order book liquidity and tight spreads, making it comparable to major CEX trading pairs.

Beyond HYPE, the spot market hosts a growing ecosystem of tokens launched through HIP-1 auctions. These range from ecosystem tokens (projects building on HyperEVM) to meme tokens to utility tokens for various protocols. Liquidity varies widely — major tokens have professional market makers providing deep books, while newer or smaller tokens may rely primarily on HIP-2 automated liquidity.

USDH (Hyperliquid's native stablecoin) is another important spot asset, tradeable against USDC. USDH serves as the collateral for HIP-3 deployed perpetuals and is central to the Hyperliquid DeFi ecosystem.