- Paragon’s HYPE² power perpetual is designed to deliver convex exposure to the price of HYPE without a strike price or expiry date.
- A 20% rise in HYPE translates into roughly a 44% gain in the HYPE² index before funding fees.
- Leverage significantly increases risk: a 2× long HYPE² position is liquidated after an approximately 22.5% decline in HYPE, excluding funding fees.
How Paragon’s HYPE² Power Perpetual Works
Paragon’s HYPE² product is built to create convex exposure to HYPE, meaning the index rises at an accelerating rate as the underlying asset gains value. On a regular perpetual contract, each additional dollar gained by HYPE contributes the same amount to a trader’s position. With HYPE², every additional dollar of upside in HYPE increases the index by more than the previous dollar.
The research provides a clear example of the effect: a 20% increase in HYPE produces roughly a 44% gain in the HYPE² index before funding fees are included. The same structure also increases downside sensitivity, making the product more volatile than a conventional HYPE perpetual.
Power Perpetuals Combine Options-Like Convexity With Perpetual Mechanics
Traditional options can provide convex returns, but traders must select a strike price and expiry while managing time decay. Power Perps remove those features. The product has no strike price and no expiry date; instead, it operates as a perpetual contract settled through hourly funding.
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That structure gives each underlying asset a single order book. Liquidity does not need to be distributed across multiple strike prices and expiration dates, so traders in HYPE² meet in one market. Hourly funding replaces the expiry mechanism by requiring holders to pay or receive funding, helping keep the contract tied to its index over time.
Paragon’s design builds on earlier research into power perpetuals by Dan Robinson, Dave White, and Andrew Leone. It also draws on lessons from Opyn’s Squeeth, which applied a similar squared-price concept to ETH.
Leverage Amplifies HYPE² Liquidation Risk
Convexity can increase potential gains, but it also intensifies losses when leverage is applied. Because HYPE² already moves faster than HYPE, leverage adds another layer of exposure to the underlying asset’s price changes.
The research identifies a specific liquidation threshold: a 2× long position in HYPE² is liquidated after HYPE falls by approximately 22.5%. That estimate does not include funding fees, which could affect the point at which a position is closed.
Paragon Rollout and the Planned HYPE³ Market
As of mid-November 2026, Paragon’s rollout remains in its early stages, according to the research findings. Paragon’s own messaging describes HYPE² as a product under testing.
The official site indicates that a HYPE³ market is either coming soon or imminent. Cubing HYPE’s price would increase convexity beyond the squared structure, while also intensifying the associated risk profile.
Paragon operates through HIP-3, the framework that allows builders to deploy their own perpetual markets on Hyperliquid. This enables experimental products such as HYPE² to use existing Hyperliquid infrastructure rather than launching on a separate exchange.
Why This Matters
HYPE² gives Hyperliquid traders access to an options-like payoff structure through a perpetual contract, combining a single order book with hourly funding instead of strikes and expiries. For market makers, the research highlights a practical benefit: HYPE² exposure can be hedged with the spot and linear perpetual markets already available on Hyperliquid, keeping the trading and hedging activity within the same venue.
The product’s development also shows how HIP-3 can support specialized and experimental perpetual markets. However, the same design that creates convex upside makes losses and liquidation risk more sensitive to HYPE’s price movements, particularly when traders add leverage.
Frequently Asked Questions
What is HYPE²?
HYPE² is a power perpetual index designed to provide squared-price exposure to HYPE. A rise in HYPE produces a larger percentage gain in the index, while declines create heightened downside sensitivity.
Does HYPE² have an expiry date or strike price?
No. HYPE² is a perpetual contract with no strike price or expiry date. It uses hourly funding to keep the contract connected to its index over time.
What happens to a 2× long HYPE² position if HYPE falls?
According to the research, a 2× long HYPE² position is liquidated after an approximately 22.5% decline in HYPE, before accounting for funding fees.
