Paragon is testing a new kind of derivative on Hyperliquid called Power Perps, starting with a market built on HYPE squared. The pitch is uncapped upside exposure with no expiry date attached.
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 is the HYPE² index.
The index does exactly what the name suggests. It takes the price of HYPE and multiplies it by itself.
That squaring is what makes the payoff convex. On a regular perpetual contract, each dollar HYPE gains adds the same amount to your position. On HYPE², each additional dollar of gain in HYPE pushes the index up by progressively more than the last one did.
The research 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 give traders convexity, but they come with baggage. You pick a strike price, choose an expiry, and watch time decay chip away at your position.
Power Perps skip all of that. There is no strike and no expiry, just a perpetual contract settled with hourly funding.
That design 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 a contract dying on a set date, holders pay or receive funding every hour, which keeps the contract tethered to its index over time.
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.
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. Paragon’s own messaging describes the product as being tested.
The official site indicates that a HYPE³ market is either coming soon or imminent. Cubing the price would push the 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 launching 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.