Paragon is testing a new type of derivative on Hyperliquid called Power Perps, beginning with a market based on $HYPE squared. The product offers uncapped upside exposure with no expiry date.
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. Its first market is the HYPE² index.
The index works as its name suggests: it takes the price of $HYPE and multiplies it by itself.
Squaring the price creates a convex payoff. In a regular perpetual contract, each dollar gained by $HYPE adds the same amount to a position. With HYPE², each additional dollar gained by $HYPE lifts the index by progressively more than the previous dollar did.
The research offers a specific example: a 20% rise in $HYPE translates into roughly a 44% gain in the HYPE² index, before funding fees.
Options energy, perp mechanics
Traditional options give traders convexity, but they come with trade-offs. Traders choose a strike price and expiry, while time decay gradually erodes the position.
Power Perps avoid those features. They have no strike or expiry, and are perpetual contracts settled through hourly funding.
This design gives each underlying asset a single order book. Rather than splitting liquidity across dozens of strikes and expiry dates, it brings all HYPE² traders together in one place.
Funding takes the place of expiry. Instead of ending on a set date, the contract has funding paid or received every hour, keeping it tethered to its index over time.
Paragon is building on earlier work rather than starting from scratch. The product draws on research into power perpetuals by Dan Robinson, Dave White, and Andrew Leone, as well as lessons from Opyn’s Squeeth, which applied the same squared concept to ETH.
The fine print on leverage
Convexity can also increase risk when leverage is involved. A squared index already moves faster than its underlying asset, and adding leverage amplifies that movement further.
The research identifies a specific threshold: a 2× long position in HYPE² is liquidated after $HYPE falls by about 22.5%, excluding funding fees.
Where the rollout stands
According to the research findings, the rollout was still in its early stages as of mid-November 2026. Paragon’s own messaging describes the product as being tested.
The official site suggests that a HYPE³ market is either coming soon or imminent. Cubing the price would increase convexity further, along with the associated risk profile.
Paragon operates through HIP-3, a framework that lets builders deploy their own perp markets on Hyperliquid. This allows experimental products such as Power Perps to use existing infrastructure instead of launching on a standalone exchange.
What this means for Hyperliquid traders
Market makers may see the most practical benefit. According to the research, they can hedge HYPE² exposure using the spot and linear perp markets already live on Hyperliquid, all within the same venue.
