Hyperliquid tests HIP-3 upgrade allowing operators to restrict market access with allowlists

Hyperliquid is testing HIP-3*, an optional testnet upgrade enabling independent deployers to restrict market access using on-chain wallet allowlists. The upgrade grants operators venue-scoped powers to cancel orders, place reduce-only positions, and transfer collateral. Separately, Hyperliquid Labs and Kraken's parent company Payward are discussing a CFTC-regulated structure with Bitnomial to offer crypto futures to U.S. investors, though regulatory approval remains pending.

HIP-3* permissioned market upgrade

• ▪Hyperliquid API Announcements announced on September 3, 2026, that the platform is testing an optional upgrade called HIP-3* on its testnet.
• ▪The HIP-3* upgrade remains preliminary and testnet-only, with no official mainnet release date announced as of September 2026.
• ▪The HIP-3* upgrade is strictly additive and optional, leaving existing permissionless markets on Hyperliquid unchanged.

Allowlist access controls

• ▪A HIP-3* deployer can delegate allowlist administration and other permissions individually to approved sub-deployers.
• ▪The HIP-3* upgrade allows independent market deployers to restrict trading access to their specific venues using an on-chain wallet allowlist.

Operator powers over venues

• ▪A HIP-3* deployer can place reduce-only orders for a user and move collateral to another account on the same venue.
• ▪A HIP-3* deployer can cancel a user's resting orders and time-weighted average price orders within its own venue.

U.S. regulatory discussions with Bitnomial

• ▪The proposed Bitnomial arrangement is a separate initiative from the HIP-3* permissioning upgrade and still awaits regulatory clearance.
• ▪Hyperliquid Labs and Kraken parent company Payward are in discussions regarding a structure involving regulated derivatives exchange Bitnomial.
• ▪Payward presented a proposed arrangement to the U.S. Commodity Futures Trading Commission to allow eligible Bitnomial customers to trade selected crypto futures using Hyperliquid technology.

HIP-3 deployer framework responsibilities

• ▪A mainnet HIP-3 deployer must maintain a stake of 500,000 HYPE, which validators can slash for irregular inputs that jeopardize protocol correctness, uptime, or performance.
• ▪Under the existing HIP-3 framework, independent deployers are responsible for defining contracts, maintaining oracles, setting leverage limits, and settling markets.

Debatable claims

• ▪Hyperliquid's HIP-3* upgrade undermines the permissionless nature of decentralized finance
• ▪Hyperliquid's HIP-3* upgrade grants market deployers excessive control over user accounts

2 sources