Entropy thesis: HIP-3 deployer pricing pre-IPO and exotic perps on Hyperliquid
Quote1,992 words
Entropy prices markets without spot (ANTH, OAI, PRL) with an oracle blending its order book and private-market data. It holds 2.2% of HIP-3 OI ($86M) and did >$1.25B in 30D volume, but growth mode limits deployer revenue to ~$49K a month.
Key claims
tradexyz holds ~97% of HIP-3 OI ($3.83B), Entropy $86M
Entropy OI $28M on 12 Sep to $86M, 3x in five weeks
Growth mode off would pay the deployer roughly $3M to $9M a year
What is Anthropic worth? Or OpenAI? Trillions?
One venue on Hyperliquid with >$1.2B in 30D volume has a realtime answer, and keeps shipping new markets, empowering you to trade the frontier onchain.
Time to announce that I joined the @entropyIO affiliate program (see my fancy batch), and share my personal bull thesis.
I ) Building Markets On Hyperliquid
Before going too deep down the rabbit hole, we need to set the stage properly. That requires an understanding of Entropy’s architecture and its role within the house of all finance that Hyperliquid is building.
Entropy is built on HIP-3, the primitive that lets anyone stake 500k HYPE (~$39M, locked for at least 183 days and slashable by validator vote) and deploy their own perp exchange inside Hyperliquid.
The deployer owns the product, and controls which markets exist, how each one is priced, max leverage, OI caps, funding multipliers, and when to halt or settle.
Hyperliquid on the other hand powers the entire infrastructure stack underneath: the order books, matching, clearing, margin engine, liquidations, ADL and USDC collateral.
A good mental model here is to think of the HIP-3 deployer as a product team running independently on someone else’s exchange. It manages market selection and pricing rules, but doesn’t maintain the exchange infra itself.
In return, the deployer keeps half of the protocol fees its markets generate. And after three free listings every additional market goes through a shared Dutch auction with a 500 HYPE floor (clearing at ~$58K rn).
Ten HIP-3 dexes have ever been registered, of which four are live today. Currently, @tradexyz holds ~97% of HIP-3 open interest ($3.83B) and volume, while Entropy sits second with $86M of OI (2.2%) and ~$79M of daily volume (2.4%).
Comparably small still, sure. But growth is accelerating: OI went from $28M on 12th of September to $86M today, a 3x in five weeks, and last week printed a record ~$561M of volume, taking Entropy’s share of HIP-3 volume from a 1.15% trough in mid-September to ~2.8%.
And one key fact that few understand: Entropy is not a smaller version of tradexyz that lists the same stuff. It’s a different business, and has a different moat.
II ) Wait, WTF Are Perps?
To properly understand what makes Entropy unique, let’s briefly think about what perps are. A perpetual future is a contract that tracks an asset’s price with no expiry.
To work it needs two prices it does not get from the market itself:
- An oracle price, the exchange’s view of what the asset is worth.
- A mark price, the smoothed number your PnL, margin and liquidations are computed on.
Funding is the glue that keeps the system together: every hour, whichever side of the book is pushing the perp away from the oracle pays the other side, which drags the perp back.
That also means tho, that any perp is only ever as good as its oracle. Get the oracle wrong and liquidations fire on a price that was never real.
Which brings us to the hard part that many miss when casually talking about “deploying a market”.
III ) Pricing Perps
How do you price the underlying asset?
For assets that already have a price (publicly listed stocks, ETFs, indices), that’s comparably easy: pull the public print during market hours, bridge the gap overnight.
That is tradexyz in a nutshell, which now runs 115 markets of things with a price, executed better than anyone else.
But what if a “price” doesn’t exist?
That’s when the oracle becomes real complexity, and where deployers actually differ from each other.
Ventuals learned this the hard way in May: an offchain feed misread a 5-for-1 split, the SpaceX perp fell 45% in 30 minutes, 484 users got liquidated, and the platform shut down just a month later.
Paragon repeated the lesson this week. It paid ~$45K for the $PAPER ticker and listed a pre-launch perp priced off an 8-hour EMA of its own mark, no external anchor, betting spot would arrive later.
The perp opened near $0.012, tripled within two hours, and all was fine, until @papertrade_xyz said the token won’t be transferable. That meant that the anchor (spot market) was never coming, and Paragon halted and settled the market at $0.0263 on day two.
tradexyz’s own pre-IPO template mainly sidesteps the problem instead of solving it: it only lists names with an announced IPO date, starts them at an XYZ-defined reference price inside a ±25 to 50% discovery band, and converts them to a normal perp at listing.
Popular pre-IPO stocks like Cerebras, SpaceX or Quantinuum all went live that way. But nothing without an IPO date can be listed like this.
IV ) The Differentiator: Markets That Don’t Exist
That’s why Entropy’s design goes the other way, aiming to price markets better and earlier than anyone else.
The oracle is a blend of its own order book and an external aggregate of private-market data (funding rounds, secondaries, other derivatives, delivered onchain by @redstone_defi).
The weight is not fixed tho. It is a function of how much executable depth actually sits within 2% of mid, with each resting order discounted by its fill probability, and the book’s weight capped at 95%.
→ Deep book: The book is the price: a 45% error in the external feed moves the oracle by ~2%.
→ Thin book: The external data takes over. Depth only counts if it has been there for minutes, so you can’t post a wall, move the mark and pull it.
It also features:
- A 5-minute EMA on the mark
- Catastrophic bounds that only bind in a tail event
- Funding damped to an eighth of normal
- Isolated margin only
- Two-year resolution clock with a TWAP settlement (if no IPO happens)
Why do I mention all of that?
Because THAT is exactly where Entropy’s real moat lies.
In being able to price markets earlier and better, and bringing pre-IPO perps (e.g. $ANTH, $OAI) or exotic crypto perps (most recently $PRL, with a disclosed external reference instead of a self-referential loop) to Hyperliquid before other exchanges, while benefiting from HL’s top tier infrastructure.
It’s not a tradexyz copycat or “just another perp dex”, and that they’re definitely on to something, is also starting to show in the numbers:
io:ANTH carries $43.5M of OI, @coinmetrics measured it at the tightest spread of any Anthropic pre-IPO venue in its sample (~1.5bp), and $ANTH turns over only ~0.17x of its OI a day against 2.9x for SNDK (indicating serious positioning and hedging efforts, not just gambling). In the past 30 days, Entropy did >$1.25B in volume.
Why does it matter?
A liquid, continuous price for Anthropic and OpenAI does three things at once:
- It gives anyone exposure to the most important private companies in the world, 24/7, with USDC onchain.
- It gives the people who already hold that exposure, employees, secondary buyers, SPV investors, a place to hedge. The team itself has said that prime brokers running total return swaps and Anthropic shareholders are already in the book.
- It makes Hyperliquid the reference pre-IPO price. DefiLlama tracks 18 venues quoting an Anthropic perp, and per Coin Metrics the one with the tightest spread sits on Hyperliquid.
That is attention and flow from far outside crypto-native speculator circles, and it is a real value prop for TradFi desks who have never cared about a perp DEX before.
V ) The Economics Behind Entropy
With all of that in mind, let’s have a look at the money side of the “deployer business”.
HIP-3 markets charge double Hyperliquid’s native rate (3bp maker, 9bp taker), split 50/50 between the protocol and the deployer.
However, every Entropy market runs in growth mode, which scales fees, rebates and volume credit by 0.1, i.e. a 90% discount to buy volume. That is why @DefiLlama shows ~$1.25B of 30-day volume and only ~$49K of 30-day deployer revenue (roughly $0.6M a year).
But it’s also worth having a look at the same volume in a scenario with growth mode off (which then pays 10x). In dollar terms that would translate to roughly $3M to $9M a year to the deployer.
And on a sidenote, there is a second potential revenue source too. Hyperliquid builder codes let a frontend charge up to 10bp on every order it routes. Entropy’s UI already ships a builder address, but it's currently set to zero. A 1 to 2bp builder fee on today’s volume would add another ~$1.5M to $3M a year before any growth.
If you also factor in growth, things obviously get even more interesting:
- If Entropy just holds its current trajectory and doubles volume to ~$30B annualized, that is $6M to $18M a year.
- If it takes 10% of HIP-3 at today’s HIP-3 size, ~$65B a year, it is $13M to $38M.
For reference, tradexyz does ~$52B a month and earns ~$2M of monthly deployer revenue, about $24M annualized (per DefiLlama), in the same subsidy regime.
Volume will fall when the subsidy ends ofc, but it’s imo fair to assume that directional allocators and hedgers are less fee-sensitive than farmers, which is exactly why the OI mix above matters.
Regarding Entropy itself, no token has been announced (hence no tokenomics either) and there is also no points program live (yet).
But if there is a token one day that captures the deployer’s half of fees, the above maths gives us a base line for projected valuations:
A venue earning $3M to $9M a year ex-subsidy at today’s volume, at the 20 to 40x revenue multiples perp venues trade at, supports $60M to $360M before any growth.
The $13M to $38M scenario supports $250M to $1.5B. It can also grow much further tho (see attached visual for more detail).
However, important to note that all of this is just purely assumption-based and my personal opinion/perspective, and not financial advice in any way or form.
What is certain tho, is that if you’re trading on Entropy today, you’re early.
Which is why if you want to trade the frontier onchain too (and likely position yourself for one of the biggest Hyperliquid/perp plays of the cycle while doing so), join me on Entropy here (and allow me to earn a share on the ref volume fees, very much appreciated support):
t.co/Z4iQ4iN6PG
Shoutout to @entropymarkets for the fancy batch btw.
VI ) Conclusion
Today, Anthropic is half of Entropy’s open interest, and more broadly speaking, pre-IPO names (ANTH, OAI) are ~59% of OI, while equities like SNDK carry most of the volume. Growth has been accelerating recently, and the book has tripled in five weeks.
However, Entropy’s biggest test is still ahead. Anthropic’s listing is expected around mid-November, and three days before, the oracle goes book-only, before handing over to the public price at listing.
How that will unfold could give us a first indication for the answer to the question “will Entropy own the template for every private name that follows?”.
If it does, and keeps creating new markets before others can, that is real moat.
I believe it will.
And hence, the thesis is simple.
HIP-3 turned Hyperliquid into exchange infrastructure anyone can build on.
@tradexyz proved you can win distribution on it.
@entropyIO is proving you can win on pricing, and on markets nobody else can list.
That turns the pricing of private companies into a major vertical, with Entropy at the helm, creating and pricing new markets earlier and better than anyone else.
Meanwhile, Hyperliquid becomes the venue where the frontier trades, and the house of all of finance keeps expanding.
Real financial innovation.
Great for HL.
Great for Entropy.
Bullish.
As a Hyperliquid maxi + day one io:ANTH trader, I'm looking forward to see how this ambitious vision plays out.
I'm still actively trading on @entropyIO btw, and the main position I hold rn is my $PRL long (see post below).
Join via my ref link here: entropy.io/?r=zerokn0wledge
x.com/zerokn0wledge_/status/2111401105577935091?s=20
QUOTING @entropymarkets
The third round of Entropy affiliate badges has been distributed. Invitations have been sent on X, and recipients will find further instructions in their DMs. Thank you to everyone who continues to support Entropy. Every contribution is noticed, and the next round will follow s
The third round of Entropy affiliate badges has been distributed. Invitations have been sent on X, and recipients will find further instructions in their DMs. Thank you to everyone who continues to support Entropy. Every contribution is noticed, and the next round will follow s
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What came next · since 20 Oct 2026
Show how the covered asset moved
This piece lays out a thesis on the sector without making a call on the token, so price moves since publication are shown as market context.
Mentioned for context
No public market for $ANTH, $OAI. No reliable price feed for $PRL.
Since then
No follow-up pieces on this subject yet. This is the latest take.
Daily closes in USD from DefiLlama and Yahoo Finance. Only a bullish or bearish call in a thesis or market take is tracked; explainers, lists, maps and mentions are neutral context. This is a partner piece. Not financial advice.