Author: nairolf
Compiled by: Deep Tide TechFlow
"Friend, what is Hyperliquid's bidding mechanism?"
Let's explain the HIP-1 proposal put forward by @HyperliquidX in a (super) simple way.
"What is this?"
HIP-1 is a fungible token standard with a limited supply.
It defines the rules for how tokens are listed on the Hyperliquid platform. Tokens are sold through Dutch auctions, with each auction lasting 31 hours, and the starting price is double the previous auction's closing price.
"Don't understand?"
Hyperliquid is an L1 blockchain with a built-in exchange.
It supports various perpetual contract trades, allowing users to go long or short on almost any token, and leverage can be used.
In addition, it has a spot trading area similar to Binance or Coinbase, but it is completely decentralized, hoping this helps you understand.
"Got it, but how is it implemented?"
Because Hyperliquid is decentralized, a fair mechanism is needed to determine which tokens can be listed, rather than being arbitrarily decided by a single team or individual. This is different from centralized exchanges, which typically decide listings by charging fees or selectively choosing tokens.
"How does it specifically work?"
Hyperliquid implements token listings through an auction mechanism.
In simple terms, every 31 hours, a new "listing right" will be publicly auctioned. The starting price of the auction is double the last "listing right" closing price, and the price gradually decreases over time until someone purchases it.
"Give an example"
Suppose you want your "XYZ" token to be listed on Hyperliquid.
Directly contacting the team to request a listing won't work. Instead, you need to purchase a "listing right," and this requires participating in the auction.
"How much does it cost?"
The first step is to check the closing price of the last "listing right," for example, $69,420.
The starting price for the next auction will be double that, which is $138,840.
This price will gradually decrease over time until someone decides to purchase. After that, this auction process will repeat every 31 hours.
"So I can list my token?"
That's right. Anyone can participate in the auction. If you think the price is right, you can purchase the "listing rights" to have your token listed on Hyperliquid.
The 31-hour interval ensures that not too many tokens are listed, thus maintaining the scarcity of the platform and the uniqueness of the tokens.
Summary
Hyperliquid's auction mechanism determines the price at which new tokens are listed on the spot exchange.
Each auction is limited by time and price—an auction is held every 31 hours, starting at double the previous closing price, then the price gradually decreases until someone buys it.