Hyperliquid Adds On-Chain Dividend and Stock Split Capabilities

Author｜ Odaily Planet Daily Azuma

On August 12 Beijing Time, Jeff Yan, founder of Hyperliquid, announced an update progress in the official Discord channel. Due to the original wording being overly technical, many people overlooked or underestimated the significance of this update.

The following is a direct translation of Jeff Yan's original statement.

• Based on Builder's feedback, HIP-1 will add the following function controlled by token deployers: scaleWei { token, totalWei, referenceToken, systemAddress }.
• This operation automatically transfers the token's totalWei from systemAddress to users in proportion to their referenceToken balances. The calculation rounds down and excludes systemAddress itself. For example, when token == referenceToken, this function can be used for redenomination.
• The systemAddress has two possible forms: the system address from Core to EVM; or a Treasury address specified by the deployer that can provide a signature. Note that the EVM itself does not natively support this atomic functionality. Therefore, if the relevant token also exists in the EVM environment, the corresponding smart contract may need to include custom logic to synchronize this operation with the token balance on the EVM.
• When the token and referenceToken are the same token: all open orders will be canceled and then recreated according to the actual redenomination ratio, with quantities rounded down to the precision specified by szDecimals; totalWei may be negative, enabling reverse redenomination.
• We welcome your feedback to ensure this feature meets as many real-world use cases as possible.

Clearly, without a basic understanding of smart contracts, it is difficult to grasp what this update from Hyperliquid truly means.

In simple terms, Hyperliquid is adding a previously uncommon capability to HIP-1—batch, programmatic adjustments to user assets directly at the balance layer of HyperCore.

What matters most here is not the function name scaleWei or its related parameters, but what they can actually do.

Suppose there is a token A on Hyperliquid, and currently Alice holds 100 tokens, Bob holds 50 tokens, and Charlie holds 10 tokens. If an address contains 1,600 tokens of B, with A as the referenceToken, the system can automatically distribute the 1,600 tokens of B based on each user’s proportion of held A tokens.

The allocation will be:

• Alice holds 62.5% of A and receives 1,000 B;
• Bob holds 31.25% and receives 500 B;
• Charlie holds 6.25% and receives 100 B.

HyperCore can directly modify account balances according to predefined rules without requiring users to click Claim or individually invoke smart contracts.

If token == referenceToken, a "redenomination" will be executed, and the change will be even more straightforward.

For example, if the original holdings of a stock token are Alice: 100 shares, Bob: 50 shares, and Charlie: 10 shares, and a 1:10 stock split is now executed, the system can directly adjust the balances.

The adjusted position will be:

• Alice holds 1,000 shares;
• Bob holds 500 shares;
• Charlie holds 100 shares.

Everyone's position percentage remains unchanged; only the unit of valuation has changed. The same applies in reverse.

Hyperliquid also specifically addressed order issues in the update. If an asset undergoes a 1:10 split, previously placed sell orders for 100 shares cannot remain unchanged, as this would cause the post-split order quantity to mismatch the new position structure. Therefore, the system cancels the original orders and recreates them according to the new ratio, adjusting the quantity precision based on szDecimals. In other words, this effectively recalibrates balances, orders, and other trading states together.

Now that you understand the update logic, what is the purpose of this “programmability at the balance level”?

The content currently published by Jeff Yan primarily describes the underlying capabilities of scaleWei, but through this capability, we can already discern several clear application directions for stock tokens.

Scenario One: Dividend Distribution

Dividends are one of the most fundamental rights in traditional stocks. In traditional brokerage systems, this is a standard corporate action; however, under typical EVM models, performing a similar operation usually requires recording eligible addresses via smart contracts, followed by users claiming their dividends manually, or the project team distributing them individually.

scaleWei offers another possibility—directly distributing dividend assets to users based on their tokenized stock balances on HyperCore. Suppose, in the future, a publicly traded company’s stock tokens appear on Hyperliquid, and the company decides to distribute a $1 dividend per share—Alice holds 100 shares, Bob holds 50 shares, and Charlie holds 10 shares. The system can automatically distribute the dividend assets to each user’s account according to their holdings, without requiring users to manually claim or the project team to individually call contracts; HyperCore itself can execute this bulk transfer.

Scenario Two: Stock Split and Reverse Stock Split

This is actually the scenario explicitly addressed in this update. When the token and referenceToken are the same asset, scaleWei can uniformly adjust the balances of all holders by a proportional factor.

Therefore, in the future, if a HIP-1 asset requires a 1:10 split, a 10:1 consolidation, or even an adjustment to the minimum trading unit, these actions can be executed directly, and the system will automatically cancel and rebuild open orders. For a trading system truly designed to support stocks and ETFs, such “corporate actions” are standard functionality.

Scenario Three: Rebasing

A similar mechanism can also be applied to Rebase. In simple terms, this refers to when the total supply or unit value of an asset is adjusted—particularly common during pre-market stock token conversions, where the number of shares is correspondingly adjusted—while the relative holding proportions among users remain unchanged.

Previously, such operations often relied on the logic of the token contract itself; going forward, they can become a native capability of HyperCore.

Scenario Four: Airdrop

Another more intuitive scenario is an airdrop. The referenceToken does not need to equal the token being distributed, so theoretically, asset B can be distributed directly in proportion to A's holdings.

For example, if a project decides to distribute another token to holders of a specific HIP-1 asset, the system can directly read users' A balances on HyperCore and proportionally distribute B from the designated Treasury address.

This means that, at least within HyperCore, some traditional "airdrop claiming" actions may be further simplified so that the system directly allocates balances.

It should be emphasized that Jeff Yan’s recent update focuses solely on underlying functionality and does not imply that Hyperliquid has announced dividends for stock tokens on the platform. However, from an infrastructure perspective, the technical pathway for “allocating assets to accounts in proportion to holdings” — required for the aforementioned use cases — is now in place.

Looking at the potential use cases, the true significance of this Hyperliquid update lies in its potential to address the gap in "corporate actions" capabilities for on-chain assets.

Over the past few years, discussions in the industry about tokenized stocks have often focused on—“Can stocks be put on the blockchain?” But if you truly want to move stocks onto the blockchain, the issue goes far beyond just this one question. After issuance, stocks are subject to a series of corporate actions, including dividends, stock splits, reverse splits, rights offerings, and asset distributions.

Therefore, a truly complete on-chain stock infrastructure needs not only to “trade stocks” but also to handle asset state changes beyond these trades—something this update from Hyperliquid begins to address.

From this perspective, scaleWei is more like filling in a missing piece of infrastructure for the next phase of Hyperliquid—enabling on-chain financial assets to not only be tradable but also to undergo various corporate actions, just like real-world financial assets.