Hyperliquid Adds Support for Stock Dividends and Corporate Actions

Author | Azuma (@azuma_eth)

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 the token deployer: scaleWei { token, totalWei, referenceToken, systemAddress }.
• This operation automatically transfers the token's totalWei from systemAddress to users proportionally based on their referenceToken balances. The calculation rounds down and excludes systemAddress itself. For example, when token == referenceToken, this feature 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 signatures. 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 the concept of smart contracts, it is difficult to grasp what this update from Hyperliquid truly means.

In simple terms, Hyperliquid is adding to HIP-1 a capability that was previously uncommon: programmatically and batch-adjusting 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, with Alice holding 100 tokens, Bob holding 50 tokens, and Charlie holding 10 tokens. If an address contains 1,600 tokens of B and uses A as the referenceToken, the system can automatically distribute the 1,600 tokens of B according to 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.

Users do not need to click Claim or individually invoke smart contracts—HyperCore directly modifies account balances according to predefined rules.

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 holding 100 shares, Bob holding 50 shares, and Charlie holding 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-related 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 result in order quantities mismatching the new position structure. Therefore, the system cancels the original orders and recreates them according to the new ratio, adjusting the quantities with precision based on szDecimals. In other words, this ensures that balances, orders, and other trading states are all revalued consistently.

Understood the update logic—so what exactly is the use of this "programmability at the balance level"?

Currently, Jeff Yan’s published content primarily describes the underlying capabilities of scaleWei, but through these capabilities, we can already discern several clear application directions for stock tokens.

Scenario One: Dividend Distribution

Dividends are one of the most fundamental rights associated with 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 according to their holdings based on their stock token 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 then automatically distribute the dividend assets to each user’s account in proportion to their holdings, without requiring users to manually claim them or the project team to individually invoke 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 trade 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 adjustments in the total supply or unit value of an asset—particularly common during pre-market stock token conversions, where the number of shares is adjusted accordingly—while maintaining the relative holding proportions among users.

Previously, such operations often relied on the logic of the token contract itself; going forward, they can become native capabilities 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 a designated Treasury address.

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

It should be emphasized that Jeff Yan’s recently announced update currently focuses solely on underlying functionality and does not imply that Hyperliquid has declared any dividend distributions 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—has now been established.

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 is far more complex than just that. 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 must not only enable "trading stocks" but also handle asset state changes beyond these transactions—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 traditional financial assets in the real world.