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Deploying Spot
What is Hyperliquid L1 and HyperEVM
Hyperliquid’s L1 is a purpose-built execution environment that supports high-throughput and low-latency financial applications. Hyperliquid’s flagship product on this L1 is a Decentralised Exchange (DEX) with an on-chain order book for Perpetual Contracts and Spot Trades.
Uniquely, the Hyperliquid L1 codebase is closed-sourced (as of 9 January 2025), although the blockchain aims to be decentralised through a network of validators. Currently, the L1 is not available for projects to build upon. This leads us to the highly anticipated HyperEVM.
The HyperEVM is another component of the Hyperliquid L1 that provides a general-purpose environment for projects to build on. As part of the Hyperliquid L1, it is secured by the same set of validators running the HyperBFT consensus mechanism.
As of early January 2025, the Hyperliquid DEX has been in production for over a year, while the HyperEVM is currently only available in testnet. For more information, check out their documentation here.
Getting Listed on Hyperliquid Spot
While most trading activity on Hyperliquid has been in perpetual contracts, spots have been gaining momentum due to the upcoming HyperEVM.
Hyperliquid allows projects to trade their tokens on Hyperliquid’s DEX with low fees and deep liquidity while allowing the secure sending of these tokens to the HyperEVM to be used in applications built there.
This allows Hyperliquid native spot tokens to provide tangible utility to users on the upcoming HyperEVM. Conversely, EVM native tokens, e.g. MON, can build new applications on top of the HyperEVM while tapping on the deep liquidity in Hyperliquid’s DEX.
So, how do we deploy a spot token on Hyperliquid?
Critical Information to Know
- You can get stuck in the deployment so, try it out on testnet first.
Before deploying a spot token in production, try the execution on the Hyperliquid L1 testnet, available at https://app.hyperliquid-testnet.xyz/deploySpot. Each step is immutable, and it is easy to get stuck in a state where your deployment configuration is wrong or you cannot proceed.
- Spot tokens on Hyperliquid L1 are deflationary
Trading Fees
Similar to $HYPE, trading fees for all spot tokens are paid in the tokens themselves. These fees are subsequently burned, reducing the circulating supply. For tokens traded on other chains, this mechanism may result in discrepancies in the market capitalisation displayed on Hyperliquid’s DEX.
General Steps for Getting a Spot Listing
There are five (5) key steps to deploying your token:
Step 1: Deploying a spot token
Step 2: Set genesis balances
Step 3: Deploy spot trading pair against USDC
Step 4: Deploy Hyperliquidity (Single sided liquidity pool)
Step 5: Review inputs and trigger genesis
Note that each step is permanent. After passing each step, you CANNOT return to the previous step.
Deployment Steps:
Step 1: Deploying a Spot Token
Hyperliquid L1 environment does not allow you to deploy your ERC20 token directly. You must deploy a HIP-1 token via their interface at https://app.hyperliquid.xyz/deploySpot. For more information about the HIP-1 token, refer to their documentation here.
There are some unique considerations for deploying the spot token:
- The gas cost of deploying a spot token is determined by a Dutch auction (descending price auction) every thirty-one (31) hours.
A Dutch auction is where the price starts high and gradually decreases until someone is willing to buy.
The gas cost decreases linearly throughout the auction. Therefore, the gas cost decreases by approximately 0.0538% each minute until a spot token is deployed.
For example, if the auction's opening price is USDC 1,000,000, the gas cost is reduced by approximately USDC538 every minute. Therefore, an hour after the auction opens, the bid price would decrease by 3.23% to USDC 967,720.
- Only one spot token can be deployed every round.
This means that once a spot token is deployed, you must wait until the entire duration of the round ends before the new auction will begin.
- The new auction starts at 2x of the previous round’s winning bid.
If the previous round’s winning bid was USDC500,000, the new auction round will start at USDC1,000,000.
Step 1a: Identifying the current status and gas price of the auction
Starting at https://app.hyperliquid.xyz/deploySpot, you will see the spot deployment UI.
In the example below, you will note that the auction has concluded. There are three critical pieces of information:
- The current auction’s winning price was USDC 36,193.
- This implies that the next auction price will begin at USDC 72,386.
- The following auction will begin on the 10 Jan 2025, 16:00hr. The date is shown in your local time based on your browser settings.
Completed Auction
If you come across the example below, you are in luck. The auction is still open and available to the first bidder who accepts the auction price. Note that the current auction price is USDC 529,304.
An open auction
Step 1b: Transfer USDC to Arbitrum One to Deposit into Hyperliquid
You must have USDC in your Hyperliquid wallet to continue with the bid. Currently, Hyperliquid utilises USDC as a native gas token. USDC will be required for all on-chain transactions on Hyperliquid’s L1.
You may connect any EVM wallet to Hyperliquid; however, note that SAFE wallets are unavailable on Hyperliquid’s L1.
Deposit into Hyperliquid
Step 1c: Configure your token
There are four key configurations for your token:
Fig 4: Token Configuration
- Name: Ticker/Symbol that will be shown on the trading page e.g. MON/USDC
- Full Name (optional): Name that will be shown in the token details modal on the trading page
Fig 5: Full name in modal
- Size Decimal (szDecimals): The minimum tradable number of decimals on spot order books. In other words, the lot size of the token on all spot order books will be 10 ** (weiDecimals - szDecimals). It is required that szDecimals + 5 <= weiDecimals.
- Token Decimal (weiDecimals): The conversion rate from the minimal integer unit of the token to a human-interpretable float. For example, ETH on EVM networks has weiDecimals = 18, and BTC on Bitcoin network has weiDecimals = 8.
However, we noted that during our tests, the maximum token decimal was 8. This will likely lead to a loss of dust when our existing ERC20 tokens (18 decimals) are sent from the EVM to the L1.
Step 1d: Deploy your token
When you are satisfied, click “Deploy Token”.
Congratulations! You have successfully deployed your token to Hyperliquid and are one step closer to getting listed.
Fig 6: Deploy Your Token
You may notice that while your token is deployed, you have not configured the max supply, minted any tokens or set up a liquidity pool. Therefore, your token will not be listed for trading.
Our next article will cover the steps and considerations for minting your genesis balance, deploying your spot trading pair against USDC and setting up your Hyperliquidity.
Stay tuned to our next article on getting listed, covering HIP-2 Hyperliquidity and deploying an ERC-20/multi-chain token on Hyperliquid.
Part Two Available Here:
Credits
This article was written by the Mon Protocol team. Their token, $MON became the first EVM-compatible ERC20 native token to launch on Hyperliquid Spot.
About Mon Protocol
$MON is the ecosystem token for the Pixelmon IP, a monster-collecting franchise focused on gaming and anime. It powers in-game sinks for all Pixelmon games and facilitates the payment of royalties to Pixelmon NFT holders, derived from both on-chain and off-chain revenues. On January 2nd, $MON became the first EVM-compatible ERC20 native token to launch on Hyperliquid Spot, further solidifying its presence in the blockchain ecosystem. It is currently traded on multiple centralized exchanges (CEXs) like Bybit, KuCoin, MexC, and Bitget, as well as decentralized exchanges (DEXs) such as Uniswap and Hyperliquid.
The $MON token has three primary utilities:
- Ecosystem Token: Powers in-game economies for all Pixelmon games.
- Airdrop Access: Unlocks over 100 partner token airdrops via the launchpool, which has distributed $6.5 million to MON holders in the past four months.
- Governance Token: Empowers holders to participate in decision-making processes.