Kraken Launches Investigation into HIP-3 Compliant Decentralized Exchange Leveraging Hyperliquid Technology
On the Hyperliquid testnet, a deployer referred to as Kraken has granted access to ten wallets for testing purposes and has assessed three out of five compliance measures. This suggests that the centralized exchange might be considering a permissioned HIP-3 market.
Summary
- A total of ten wallets have been successfully authorized for testing deployment using a gated approach.
- Currently, three out of five compliance measures are being scrutinized, with active implementations such as mandatory position reductions and collateral transfers.
- Kraken has not yet publicly confirmed its involvement in the testnet deployment.
- HIP-3 allows external developers to build perpetual markets using Hyperliquid’s trading framework.
On August 22, Blockworks analyst Shaunda Devens reported that a deployer named “Kraken HIP-3 test DEX” initiated a permission system called Star Gating on Hyperliquid’s testnet, which began on August 19.
This deployment has successfully added ten wallets to the list of approved users, and three out of five compliance measures specified on the testnet have been reviewed, as noted by Devens. Additionally, a validator has registered under the name “Kraken Exchange Validator.”
Unverified Connection Between Kraken and HIP-3 Test
Devens pointed out that Hyperliquid has been upgrading testnet functionalities to accommodate regulated or licensed participants. Beyond wallet whitelisting, new capabilities now allow a deployer to cancel users’ open orders, close positions through reduce-only orders, and manage collateral transfers.
In contrast to standard user-initiated trades, each action gives the deployer direct control over an account or position. This framework enables operators to use these tools to restrict access, guarantee compliance with regulatory standards, manage risks, and withdraw funds as necessary.
These types of mechanisms are typical in centralized exchanges, where access to accounts is predicated on identity verification and compliance protocols. Their implementation in HIP-3 could pave the way for the creation of a permissioned market while utilizing Hyperliquid’s on-chain order book and settlement system.
In her analysis, Devens speculated that Kraken might be “the first compliant HIP-3 deployer,” yet emphasized that mere mention does not confirm Kraken’s participation. Hyperliquid’s testnet allows permissionless deployments, permitting any independent user to establish a market or validator under the exchange’s brand.
At the time of this report, neither Kraken nor Hyperliquid has publicly confirmed any collaborative efforts or testing. The current evidence suggests a Kraken-branded deployment is using the new controls, but does not explicitly validate Kraken as the developer.
Exploring the HIP-3 Framework by Hyperliquid
HIP-3, or Hyperliquid Improvement Proposal 3, enables independent developers to operate perpetual futures markets by utilizing HyperCore, the network’s trading engine. HyperCore provides the order book, matching mechanisms, margin functionalities, and liquidation protocols, while each deployer establishes their own market rules and trading conditions.
Previous reports from crypto.news stated that HIP-3 was officially launched on the mainnet on October 13, 2025. In order to operate independently as a perpetual exchange without needing authorization from Hyperliquid’s core team, a builder must stake 500,000 HYPE.
Deployers are permitted to designate listed assets, price oracles, collateral requirements, margin specifications, leverage limits, and funding protocols. The first three assets can be listed without an auction; however, subsequent assets require a Dutch auction among deployers.
Requiring a stake of 500,000 HYPE serves as a financial guarantee. Validators may impose penalties on this stake if a deployer breaches oracle usage rules or market regulations, and this obligation continues for 30 days after the closure of the operator’s market.
Markets created under HIP-3 allow the deployer to retain 50% of the fees collected. A report from July 3 revealed that open interest in HIP-3 exceeded $1.43 billion, with contracts linked to equities and commodities comprising seven of Hyperliquid’s top ten markets by trading volume.
These permissioned features could significantly influence this structure. While anyone can establish a HIP-3 market as long as they comply with protocol guidelines, a deployer using Star Gating may restrict trading within their market to approved wallets.
This method enables an operator to combine public blockchain settlement with identity verification, geographic restrictions, or other account-specific regulations. It remains uncertain whether these features will be implemented on the mainnet and under what conditions.
Kraken’s Strategy in Regulated and Blockchain Markets
The association with the testnet has drawn interest, especially as Kraken and its parent company, Payward, have been adapting throughout 2026 to integrate securities, tokenized assets, and on-chain trading solutions.
On August 18, the exchange began offering U.S. stocks to eligible clients within the European Economic Area. This service encompasses over 7,000 traditional U.S.-listed stocks, around 700 xStocks, and more than 600 crypto assets, all available through a single account.
Traditional stock services are being provided by Payward Europe Digital Solutions, an investment platform based in Cyprus, regulated under the EU’s MiFID II framework. Kraken reported that xStocks have achieved over $38 billion in transaction volume since the launch of these tokenized products in June 2025.
Earlier in 2026, the company launched xChange, an on-chain execution system that initially supported over 70 tokenized equities across Ethereum and Solana. Subsequently, Kraken granted eligible clients outside the U.S. the ability to use specific xStocks as collateral for futures and margin positions.
Payward is also aiming to expand its offerings beyond U.S. equities. After partnering with trading infrastructure firm GTN in July, they plan to include shares from Hong Kong, eventually extending to the UK, Europe, South Korea, and other regulated markets, subject to local laws.
Devens underscored Hyperliquid’s initiatives involving xStocks and Payward’s recent activities as potential hints of a connection to Kraken during the testing phase. However, her conclusions are primarily speculative, hinging on names and timelines rather than confirmed details from either party.
U.S. Derivative Regulations May Limit Accessibility
For users in the U.S., a permissioned HIP-3 deployment does not necessarily guarantee legal access to on-chain perpetual contracts. Typically, commodity derivatives offered to American retail investors must come from firms registered with the Commodity Futures Trading Commission.
