Paragon is testing a new class of derivative on Hyperliquid called Power Perps, with its first market built on the HYPE² index. The pitch is options-style convex upside: no strike price, no expiry date, and no cap on potential gains.

What Paragon Is Rolling Out

Paragon, the firm behind the HIP-3 market on Hyperliquid, began rolling out Power Perps around November 4-5, 2026. The first market tracks the HYPE² index, which does exactly what the name implies: it takes the price of HYPE and multiplies it by itself.

That squaring is what makes the payoff convex. On a standard perpetual contract, each dollar HYPE gains adds the same amount to a position. On HYPE², each additional dollar of gain pushes the index up by progressively more than the one before it.

The research behind the product gives a concrete example: a 20% increase in HYPE translates into roughly a 44% gain in the HYPE² index, before funding fees are counted.

Options Energy, Perp Mechanics

Traditional options deliver convexity, but they come with baggage. Traders must pick a strike price, choose an expiry, and watch time decay chip away at their position. Power Perps skip all of that—there is no strike and no expiry, just a perpetual contract settled through hourly funding.

That design also means each underlying asset gets a single order book. Instead of liquidity being scattered across dozens of strikes and dates, everyone trading HYPE² meets in one place.

The funding mechanism takes the place of expiry. Rather than the contract dying on a set date, holders pay or receive funding every hour, which keeps the contract tethered to its index over time. The approach swaps a fixed termination date for a continuous economic anchor.

Paragon is not inventing the concept from scratch. The product builds on earlier research into power perpetuals by Dan Robinson, Dave White, and Andrew Leone, and draws lessons from Opyn's Squeeth, which applied the same squared idea to ETH. With HYPE², that lineage of research is now being put to the test on Hyperliquid itself.

The Fine Print on Leverage

Convexity cuts both ways once leverage enters the picture. A squared index already moves faster than the asset underneath it, so stacking leverage on top amplifies that speed further.

The research flags a specific threshold: a 2× long position on HYPE² gets liquidated after HYPE falls by about 22.5%, and that figure does not yet account for funding fees.

Where the Rollout Stands

As of mid-November 2026, the rollout remains in its early stages, according to the research findings, and Paragon's own messaging describes the product as being tested. The official site indicates that a HYPE³ market is either coming soon or imminent, making it the nearest concrete item to watch as the rollout develops. Cubing the price would push convexity even further, along with the risk profile that comes with it.

Paragon operates through HIP-3, the framework that lets builders deploy their own perp markets on Hyperliquid. That structure allows experimental products like this one to plug into existing infrastructure rather than launch on a standalone exchange.

What This Means for Hyperliquid Traders

Market makers may find the most practical upside. According to the research, the design allows them to hedge HYPE² exposure using the spot and linear perp markets already live on Hyperliquid, all within the same venue. That means both linear and convex HYPE exposure can be managed without routing risk across multiple platforms.

For traders outside the market-making crowd, the product distills to a simple trade-off: options-like convexity with none of the strike, expiry, or time-decay decisions, in exchange for hourly funding that is paid or received and an index that moves faster than HYPE itself.