HIP-1: Native token standard

HIP-1 is a capped supply fungible token standard. It also features onchain spot order books between pairs of HIP-1 tokens.

The sender of the token genesis transaction will specify the following:

1. name: human readable, maximum 5 characters, no uniqueness constraints.

2. weiDecimals: the conversion rate from the minimal integer unit of the token to a human-interpretable float. For example, ETH on EVM networks has weiDecimals = 18 and BTC on Bitcoin network has weiDecimals = 8.

3. szDecimals: the minimum tradable number of decimals on spot order books. In other words, the lot size of the token on all spot order books will be 10 ** (weiDecimals - szDecimals). It is required that szDecimals <= weiDecimals.

4. maxSupply: the maximum and initial supply. The supply may decrease over time due to spot order book fees or future burn mechanisms.

5. initialWei: optional genesis balance for sender of the transaction. This could be a multisig treasury, an initial bridge mint, etc.

6. hyperliquidityInit: parameters for initializing the Hyperliquidity for the USDC spot pair. See HIP-2 below.

The deployment transaction of the token will generate a globally unique hash by which the L1 will index the token.

Like all L1 transactions, gas costs will ultimately be paid in the native Hyperliquid token. During the alpha phase before the native token exists, the following gas costs are charged in USDC:

1. 1000 USDC gas to deploy an HIP-1 token. This cost will be decreased over time to give frontend and API integrations time to gracefully scale with the universe of tradable tokens.

2. A small initial USDC gas fee (value TBD) for the initial L1 state update of each (address, token) pair, either through trading or transfer. Further trades and transfers to initialized ledgers are gas free within the standard Hyperliquid L1 fill rate conditions.

USDC

USDC is the only bridged token natively secured by the validators of the Hyperliquid L1. USDC is currently used for all perps margining. With HIP-1, USDC also becomes a spot token with an atomic transfer between perps and spot wallet USDC. Spot USDC has szDecimals = weiDecimals = 8 to allow for a wide range of HIP-1 token prices.

Spot trading

HIP-1 tokens trade on order books parametrized by base and quote tokens, where limit orders are commitments to exchange sz * 10 ** (weiDecimalsBase - szDecimalsBase) units of the base token for px * sz * 10 ** (weiDecimalsQuote - szDecimalsQuote) units of the quote token. Any HIP-1 token will be initialized with a native spot order book where the quote token is Spot USDC. Trading of arbitrary pairs of native tokens can be enabled in the future.

Trading Fees

Native spot and perps order books share the same volume-based fee schedule for each address. Fees collected in non-USDC HIP-1 native tokens are currently burned as there is no mechanism implemented to accrue these to HLP. In the future, token fees could accrue to the respective Hyperliquidity strategy, native token stakers, or otherwise.