> For the complete documentation index, see [llms.txt](https://docs.paragon.trade/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.paragon.trade/about-paragon/hip-3.md).

# HIP-3 Integration

Paragon markets are deployed via HIP-3, Hyperliquid's framework for third-party perpetual futures.

> **TL;DR:** Paragon uses HIP-3 to list index perpetuals natively on Hyperliquid. Trade with your existing Hyperliquid account-same collateral, same interface, no new platforms required.

## What is HIP-3?

HIP-3 (Hyperliquid Improvement Proposal 3) enables external builders to launch and operate perpetual futures markets on Hyperliquid's infrastructure.

Key features:

* **Native listing**: Markets appear directly on app.hyperliquid.xyz
* **Shared infrastructure**: Same matching engine, orderbook, and settlement as native markets
* **Fee sharing**: Builders receive 50% of trading fees from their markets
* **No fragmentation**: Traders access all markets from a single interface

For the full specification, see the [Hyperliquid HIP-3 Documentation](https://hyperliquid.gitbook.io/hyperliquid-docs/hyperliquid-improvement-proposals-hips/hip-3-builder-deployed-perpetuals).

## How Paragon Uses HIP-3

Paragon deploys index perpetuals through HIP-3, inheriting Hyperliquid's:

* Low-latency order matching
* Deep liquidity infrastructure
* Battle-tested margin and liquidation systems
* Established trader base

This approach lets Paragon focus on index methodology and oracle infrastructure while leveraging Hyperliquid's proven exchange mechanics.

## Skin in the Game

Paragon has staked 500,000 HYPE as part of the HIP-3 deployment. This stake is subject to slashing for oracle misbehavior, aligning Paragon's incentives directly with accurate, reliable price feeds.

## Benefits for Traders

| Benefit                       | Description                                                                                                                                                                      |
| ----------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Single Venue**              | Trade Paragon indices alongside BTC, ETH, and other Hyperliquid markets without switching platforms or managing multiple accounts.                                               |
| **Unified Collateral**        | Your Hyperliquid USDC balance works across all markets-native and HIP-3. No separate deposits required.                                                                          |
| **Consistent UX**             | Same interface, same order types, same margin mechanics you already know from Hyperliquid.                                                                                       |
| **Liquidity Network Effects** | HIP-3 markets benefit from Hyperliquid's existing market maker relationships and liquidity infrastructure.                                                                       |
| **Portfolio Margining**       | Cross-margin positions across Paragon markets for improved capital efficiency. See [Portfolio Margin](https://hyperliquid.gitbook.io/hyperliquid-docs/trading/portfolio-margin). |

## Fee Structure

Under HIP-3, trading fees are split equally:

| Recipient   | Share |
| ----------- | ----- |
| Paragon     | 50%   |
| Hyperliquid | 50%   |

This model:

* Funds ongoing protocol development
* Aligns Paragon with Hyperliquid's success
* Maintains competitive fee rates for traders

## Technical Integration

Paragon's oracle network posts index prices directly to Hyperliquid via the HIP-3 oracle interface. These prices drive:

* Mark price calculations
* Funding rate determination
* Liquidation triggers

For oracle details, see [External Pricing](/markets/crypto-indices/external-pricing.md).

## Learn More

* [Hyperliquid HIP-3 Documentation](https://hyperliquid.gitbook.io/hyperliquid-docs/hyperliquid-improvement-proposals-hips/hip-3-builder-deployed-perpetuals)


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