> ## Documentation Index
> Fetch the complete documentation index at: https://hypernode-docs.polynode.dev/llms.txt
> Use this file to discover all available pages before exploring further.

# HIP-1 & HIP-2

> Native token standard (HIP-1) and hyperliquidity AMM (HIP-2) specifications.

HIP-1 and HIP-2 define HyperLiquid's native token standard and automated market making strategy. Together they enable permissionless token launches with guaranteed initial liquidity.

## HIP-1: Native Token Standard

HIP-1 defines the native token format on HyperLiquid's L1. Unlike ERC-20 tokens which live on the EVM, HIP-1 tokens are first-class L1 primitives with built-in orderbook trading.

### Token genesis parameters

Every HIP-1 token is created with these genesis fields:

| Field            | Description                             |
| ---------------- | --------------------------------------- |
| `name`           | Token name                              |
| `weiDecimals`    | Decimal precision for the smallest unit |
| `szDecimals`     | Decimal precision for order sizing      |
| `maxSupply`      | Maximum token supply                    |
| `initialWei`     | Initial supply in wei (smallest unit)   |
| `anchorTokenWei` | Anchor token amount for price discovery |

### Deployment auction

New HIP-1 tokens are deployed through a Dutch auction mechanism. The auction starts at a high price and decays linearly over a **31-hour cycle** (deliberately not 24 hours, so the cheapest window rotates globally across time zones).

Starting price: **500 HYPE** for spot pair deployment.

See [Gas Auctions](/research/gas-auctions) for full auction mechanics.

### Token registry

All deployed tokens are tracked in the `SpotClearinghouse`, which serves as the canonical token registry. Token metadata, supply, and trading parameters are stored here.

## HIP-2: Hyperliquidity

HIP-2 defines the **Hyperliquidity** strategy — an automated market making system that provides guaranteed initial liquidity for newly launched tokens.

### How it works

When a token launches, HIP-2 places a grid of resting orders on both sides of the order book using the following parameters:

| Parameter       | Description                              |
| --------------- | ---------------------------------------- |
| `startPx`       | Initial price for the order grid         |
| `nOrders`       | Number of orders on each side            |
| `orderSz`       | Size of each individual order            |
| `nSeededLevels` | Number of price levels to seed initially |

### Price formula

HIP-2 uses a recursive price formula to space orders geometrically:

```
px_i = round(px_{i-1} × 1.003)
```

Each subsequent price level is 0.3% above the previous one. This creates a guaranteed **0.3% spread** between price levels, ensuring consistent liquidity density.

### Update frequency

The HIP-2 strategy refreshes its orders on blocks with **3+ second intervals**. This prevents excessive order churn while keeping the grid responsive to genuine price movements.

### Integration with HIP-3

HIP-3 (builder-deployed perpetuals) can enable **growth mode** which reduces fees by 90% for HIP-3 assets, incentivizing liquidity in newly deployed markets. The HIP-2 strategy works alongside HIP-3 to provide both spot and perpetual liquidity for new tokens.

<Note>
  HIP-2 liquidity is protocol-provided, not user-deposited. The orders come from the protocol itself, ensuring every new token has a functioning market from the moment of launch.
</Note>