HIP Assets
The deployment of assets within the HyperLiquid network have many technical hurdles, resulting in possible invalid configurations and thus wasted gas, development time, and possible setbacks for cohorts advertising their unique product or use of the protocol. A key feature of HyperQuant's ToolBox is seamless HIP asset (effectively, a bridged token) deployment, which alleviates mistakes and oversights before they occur, directing HIP assets towards their appropriate HIP standard.
HyperLiquid effectively uses two token standards, HIP-1 and HIP-2. While HIP-1 is generally adequate as a permissionless token standard, liquidity bootstrapping approaches tend to be essential for a new market. HIP-2, inspired by Uniswap, is improved upon, utilizing a trustless on-chain order book, secured by network consensus.
To this effect, HIP-1 and HIP-2 assets under the Hyperliquid protocol have unique distinctions for unique roles in deployment:
HIP-1 Assets:
Represents a standard for tokens that can be created and traded without needing permission.
These tokens are often in the early stages of price discovery, meaning their market value is still being established and may be volatile.
To be effectively traded, HIP-1 tokens require strategies to bootstrap liquidity since they may not have established markets or deep liquidity pools.
HIP-2 Assets:
Refers to a fully decentralized strategy embedded within the HyperLiquid ecosystem.
Provides liquidity but incorporates sophisticated on-chain order book functionality.
Operates without centralized oversight, relies on blockchain consensus to secure and execute its logic.
Allows for more advanced and user-driven liquidity provisioning and trading strategies.
Simply stated, HIP-1 assets are early-stage tokens needing liquidity support, while HIP-2 assets benefit from a decentralized, sophisticated liquidity provision strategy integrated into the HyperLiquid protocol’s core infrastructure.
HyperQuant's ToolBox allows users to choose which HIP asset class best suits their current and future goals/strategies without understanding the intricacy or pros and cons, and deploy them correctly in a timely manner.
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