Hyperliquid Expands Capabilities with HIP-6 Continuous Clearing Auctions

Hyperliquid, a leading derivatives exchange in crypto, has made significant strides with its HIP-6 proposal. The new mechanism enables permissionless token launches through continuous clearing auctions (CCAs), allowing projects to raise funds and discover fair prices on-chain.

The HIP-6 proposal adapts the CCA feature from Uniswap, integrating it into Hyperliquid's architecture designed around its central limit order book (CLOB). Unlike automated market makers used by platforms like Uniswap, Hyperliquid's fully on-chain order book matches orders on-chain. This innovative approach eliminates the need for fixed-price sales or uncapped sales, which can lead to unfavorable outcomes for projects.

With HIP-6, deployers can raise capital natively on Hyperliquid, automatically seed liquidity, and benefit from fair-price discovery. However, they sacrifice control over the price of their tokens at launch. Bidders, on the other hand, enjoy a uniform clearing price for each block, on-chain custody, and advantages for early participation. The system's 'monotonically non-decreasing' nature ensures that prices can only increase with each new block, rewarding early participants.

The implementation of HIP-6 also generates revenue for the Hyperliquid ecosystem through a 5% protocol fee on the total amount raised. This fee contributes to the Assistance Fund, supporting ecosystem growth and strengthening liquidity.