# Introducing hyperps: LayerZero pre-launch perps

**Published by:** [picoin](https://paragraph.com/@lailina/)
**Published on:** 2023-09-19
**URL:** https://paragraph.com/@lailina/introducing-hyperps-layerzero-pre-launch-perps

## Content

New listing: ZRO-USDZRO-USD is a way for users to long or short the value of the unlaunched native LayerZero token (referred to as ZRO). The underlying index to which the price eventually converges is the ZRO fully diluted market cap divided by 2 billion.What are hyperps?Before the ZRO token launch, ZRO-USD will be the first hyperp on Hyperliquid. Hyperps are Hyperliquid-only perps which do not rely on any external data for the oracle price. Hyperps trade like vanilla perpetual contracts that users are familiar with, but do not require an underlying spot or index oracle price. Instead, the funding rate is determined relative to a moving average hyperp mark price in place of the usual spot price. This makes the hyperp price more stable and less susceptible to manipulation, unlike usual pre-launch futures. When trading hyperps, funding rates are very important to consider. If there is heavy price momentum in one direction, funding will heavily incentivize positions in the opposite direction for the next eight hours. As always, be sure to understand the contract before trading.What happens when ZRO launches?When ZRO/USDT is listed on Binance or OKX spot trading, ZRO-USD will convert to a normal ZRO-USD perp if the max supply is exactly 2 billion. Otherwise, ZRO-USD will settle to the fully diluted market cap divided by 2 billion a week after the CEX listing. After settlement, the hyperp will be delisted and a new vanilla perp will be listed. Either way, the price of the ZRO-USD hyperp eventually converges to the spot ZRO price after the token exists. See docs: https://hyperliquid.gitbook.io/hyperliquid-docs/trading/hyperps for precise specifications about the hyperp mechanism and settlement.Why launch hyperps?Pre-launch futures are a challenging asset to support because market makers have difficulty quoting confidently around a fair price. This not only hurts liquidity for takers, but also makes the future prone to manipulation. Hyperps address this issue by introducing a mean reversion alpha directly into the contract design. Much like funding for vanilla perpetual contracts incentivize the perp price to revert to spot price after dislocations, hyperps take the idea one step further and incentivize dislocations in the perp price to revert even without an external fair price.ConclusionZRO-USD is now live on Hyperliquid. Trading is on low leverage (max 3x) and isolated margin only. Beware of low liquidity, high volatility, potentially extreme funding, and increased liquidation risk. As a reminder, assets on max 3x leverage have a maintenance margin of 16.67% (half of the initial margin at max leverage). When an isolated position is liquidated, that isolated position and isolated margin are transferred to the liquidator. ZRO-USD is a hyperp contract that poses higher than normal risk. Do not trade contracts with which you are unfamiliar or for which you do not understand the risks. Please read the Docs to learn more about the hyperp mechanism and how it differs from vanilla perps. NFA. Note: ZRO-USD has no affiliation with the LayerZero project and the official LayerZero token (if any) has not launched. You can find the ZRO-USD hyperp here: https://app.hyperliquid.xyz/trade/ZRO.

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