Hyperliquid's HIP-3 upgrade has enabled developers to deploy perpetual contract markets. Ideally, almost any asset—from cryptocurrencies and commodities to prediction markets—can be integrated into the perpetual trading ecosystem. It sounds great, but in reality, there's a bottleneck issue.

This problem lies in the design of the oracle. Each time the oracle updates the price, the change relative to the last marked price is limited to within ±1%. This "1% ceiling" appears to be a safety measure—preventing abnormal data and ensuring smooth price evolution. The logic seems sound.

But here’s the problem: real markets are not always smooth. Some high-frequency or discontinuous markets experience rapid price jumps or even gaps within a very short period. In such cases, the 1% limit becomes a bottleneck.

Specifically, the HIP-3 oracle mechanism works as follows: each developer-deployed market is paired with its own oracle data source, which requires high-frequency updates—roughly every 3 seconds, with a minimum interval of 2.5 seconds. The key restriction is this ±1%. In other words, even if the market price jumps by 5%, the oracle can only "climb" slowly, at a maximum of 1% per update. If no oracle update occurs within 10 seconds, the system automatically falls back to using the latest bid/ask median price as a reference.

This mechanism works smoothly in markets with good liquidity and stable prices. But for assets that are inherently volatile and have discontinuous pricing, this 1% update limit becomes a significant constraint.