Paragon Power Perps Head to Hyperliquid With HYPE²

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Paragon (@tradeparagon) shared the news in a short post and a longer thread. In short, Paragon Power Perps give traders options-like exposure inside a single perpetual contract. There are no strikes, no expiry, and no premium paid up front.

What Paragon’s Power Perps Bring to Hyperliquid

A power perp is a perpetual future whose index tracks an asset’s price raised to a power. For HYPE², that power is two. So the index follows HYPE squared rather than HYPE itself.

Paragon put the idea plainly in its announcement. “Power Perps bring options-like convexity into a perpetual contract,” the team wrote. It also credited the original research by Dan Robinson, Dave White, and Andrew Leone at Paradigm.

The practical pitch is simple. Instead of spreading option demand across many strikes and expiry dates, Paragon pools demand for convexity into one order book. As a result, liquidity sits in a single place rather than fragmenting across a grid.

How the HYPE² Square Payoff Works

The index uses a clear formula. According to the Paragon docs, the index equals P squared divided by K. Here P is the HYPE oracle price, and K is a constant fixed at launch so the index opens near the underlying price.

The payoff then curves. For a return r on HYPE, the index moves by roughly 2r plus r squared. So small moves scale by about two times. For example, a 1% move in HYPE becomes close to 2% on the square.

Larger moves show the convexity. If HYPE doubles, the HYPE² index reaches four times its start. If HYPE halves, the index falls to a quarter. Because of that curve, gains accelerate faster than a linear position, while losses decelerate.

In effect, a long HYPE² position behaves like a call option on HYPE. Still, it trades as a perpetual, so there is no expiry date to manage and no strike to pick.

The HYPE² Parameters, and Why It Is Not Live Yet

The docs list a tight set of launch parameters. Max leverage is 3x. The open interest cap is $25 million. The funding clamp is 0.15%, and the market uses cross margin.

Importantly, HYPE² is not trading yet. The product page shows “Coming soon,” and the docs mark the status as a dash rather than a go-live date. So traders cannot open a position today.

No audit status, early liquidity, or market maker commitments have been confirmed either. Paragon also mentions higher powers in its examples, such as HYPE³. However, nothing beyond HYPE² is confirmed as a live next step.

Funding Is the Real Cost of Convexity

Convexity is never free. In a power perp, the price of that curve shows up as funding rather than an upfront premium. Funding on HYPE² settles hourly.

According to the docs, longs generally pay shorts. The rate combines a variance component, which scales with how much HYPE actually moves, and a financing component for the delta exposure. A clamp then caps how far the rate can swing each hour.

So the trade is a bet on realized movement. If Paragon Hyperliquid swings more than the funding implies, a long can come out ahead. If HYPE stays quiet, the funding bill slowly eats into the position instead.

Liquidation risk also scales with leverage. At 1x, a fully collateralized long is not liquidated by price alone. At 3x, the docs suggest roughly a 10.6% drop in HYPE could trigger liquidation under the stated assumptions.

Squeeth Offers a Cautionary Tale

Power perps already had a first run. Opyn launched Squeeth, an ETH² power perp, in January 2022. For a while it drew real interest.

Then the momentum faded. Squeeth TVL peaked near $27 million in April 2022, according to tracking on DefiLlama. It now sits around $572,000, and the original protocol was largely wound down by late 2024.

The common criticism was the carry. In calm markets, the funding cost of holding convexity can outrun the gains. That history is exactly why the HYPE² funding design matters so much this time.

Who Is Behind Paragon

Paragon is a HIP-3 deployer on Hyperliquid. That permission comes from staking 500,000 HYPE, which Paragon did for its earlier markets. In April 2026, it launched crypto-native index perps such as BTC.D, TOTAL2, and OTHERS.

The founder is Taha El-Magbri, a former Wall Street investor at ITE Management. An earlier product studio of his was sold to Galaxy Digital. N8V Labs built the product, backed by an undisclosed seed round from venture funds and angels, including early Hyperliquid participants.

What to Watch Next for Paragon Power Perps

The concept is clear, but the market data is not here yet. For now, the key unknowns are the exact go-live date, the audit, and the real funding rates once Paragon Hyperliquid trades.

Liquidity will be the first real test. Hyperliquid runs deep linear books for HYPE, so market makers could hedge the square exposure and collect funding from longs. Whether that demand actually pools in one book, as Paragon hopes, is the open question for launch.

This article is informational and not financial advice. Power perps carry leverage and funding risk, and convexity can decay in quiet markets. Readers should check the live Paragon docs and their own risk tolerance before trading.