Entropy completed a $14 million financing round led by Ribbit Capital and secured $40 million in HYPE staking support.

Written by: KarenZ, Foresight News

As HYPE reaches a historical high, attention surrounding Hyperliquid is increasingly focusing on the HIP-3 market.

This time, the spotlight is on Entropy.

On August 24, 2026, Entropy announced the completion of a $14 million financing round led by Ribbit Capital and obtained approximately $40 million in HYPE staking support, with the initial markets now live on Hyperliquid. The most noteworthy product is the Pre-IPO perpetual contract referenced against the valuation of AI company Anthropic. This project refers to the Anthropic market as "the first liquid trading method for Anthropic."

What is the background of the Entropy team?

According to information disclosed by Entropy, its team members include researchers and traders from Citadel Securities, Optiver, Polymarket, and Millennium.

These experiences are strongly related to the product direction of Entropy: the core businesses of Citadel Securities and Optiver involve market making, liquidity provision, and trading in complex financial markets; Millennium is a large investment management institution; Polymarket allows users to trade event outcomes through an order book market. Combining these backgrounds, the capabilities of the Entropy team are clearly concentrated on market structure, pricing mechanisms, liquidity, and trading products.

However, Entropy has not fully disclosed the names of its founders on its official website or documents. Several team members highlighted on Entropy's official Twitter include @Kintsugi_IO (CEO), @meower888, and @newpageIO (formerly of Polymarket Chinese business).

In terms of financing, Entropy has only publicly named the lead investor Ribbit Capital and has not disclosed any other participating institutions, nor the specific stage and valuation of this funding round.

Ribbit Capital is an investment institution primarily focused on financial services and fintech, with investment areas spanning payments, banking, insurance, consumer credit, securities trading, and crypto finance. Its portfolio in the Web3 space includes star projects like Coinbase, Fireblocks, Aave, Morpho Labs, Arbitrum, Blockaid, Chainalysis, and the stablecoin platform Bridge, which was acquired by Stripe.

What exactly is Entropy?

Entropy is a HIP-3 market deployer on Hyperliquid, with the code "io."

HIP-3 is a market deployment mechanism provided by Hyperliquid for independent teams. Deployers meeting staking and other conditions can utilize Hyperliquid's underlying order book, margin, and settlement facilities to establish and operate their own perpetual contract markets. Deployers are responsible for selecting reference assets, setting market parameters, and maintaining oracles.

Entropy uses this mechanism to support contract trading for assets including global stocks, commodities, indices, Pre-IPO companies, and cryptocurrencies.

In simple terms, Hyperliquid provides the underlying trading and settlement facilities, while Entropy is responsible for designing and deploying specific markets.

The current official asset catalog lists the following markets:

• Anthropic’s Pre-IPO perpetual contract, code ANTH;
• SanDisk stock perpetual contract, code SNDK;
• Super Micro Computer stock perpetual contract, code SMCI (not yet live on the platform).

What problems does Entropy aim to solve? How does it operate?

According to Entropy, the Hyperliquid ecosystem has made progress in the HIP-3 market, but some non-crypto assets still lack mature trading mechanisms. The project team summarizes existing market issues into four categories:

• Pre-IPO product terms are relatively short, making it difficult to reflect changes in private company valuations over the long term;
• Private companies lack continuous trading, and related markets often experience virtually no liquidity;
• Perpetual contracts for publicly traded assets like stocks and indices may face high funding rates;
• When the underlying market is closed, perpetual contracts continue trading, making the order book vulnerable to thinness and price manipulation.

To address these issues, Entropy focuses on improving the oracle and funding rate mechanisms.

Regarding oracles

For Pre-IPO companies like Anthropic, a liquidity-weighted oracle is used, which means the system simultaneously references two types of prices:

• External prices from multiple private market data sources;
• Internal prices from the bid-ask midpoint of Entropy’s own order book, smoothed by moving averages.

The weights of the two are determined by the bilateral actionable depth of the order book. When both sides of the order book have sufficient real depth, the internal price receives a higher weight, allowing the order book to directly participate in price discovery; when the market is thin or only has unilateral depth, the system reduces the weight of the internal price, relying more on external valuation data.

Orders that are too far from the current price and difficult to execute will also receive lower weight. As long as external data remains available, its weight in the Pre-IPO oracle is maintained at a minimum of 5% to prevent the internal order book from completely detaching from external references.

For listed stocks and public indices, the oracle distinguishes between normal trading hours and market closure.

When the main public market for stocks or indices is open, the oracle directly uses the public prices of that market. However, the internal order book will still influence the marked price. During normal trading hours, the marked price is the average of two items: the public market price and a 3-minute moving average of the bid-ask midpoint of Entropy's order book.

This means that during market hours, "the oracle is fully anchored to the public market," but "the marked price simultaneously references both the public market and the internal order book." This allows the marked price to reflect actual trading on Entropy without completely detaching from the public market.

After the main market for stocks or indices closes, the public market no longer continues to produce prices, at which point Entropy will enable the liquidity-weighted oracle. At this time, similar to Pre-IPO, the oracle consists of two parts: internal price and external price. The external price is the price from recognized after-hours trading venues or the last public price before the main market closes. The system then determines the weights of internal and external prices based on the actual actionable depth of Entropy's order book. The deeper the order book, the higher the weight of the internal price, although the external reference maintains a minimum of 5%.

Regarding funding rates

In the perpetual contract market, funding rates are used to restrain the deviation between contract prices and oracle prices.

For already listed stocks and public indices, Entropy adjusts the intensity of funding rates based on whether the main market is open:

• During normal trading hours, the funding rate is calculated at 0.5 times the result of Hyperliquid's standard formula;
• During market closure, the multiplier drops to 0.125 times.

The decrease in funding rate constraints after market closure is because the underlying public market has stopped trading, and Entropy's own order book may reflect new information from after-hours trading. If a stronger funding rate constraint continues to be applied, traders might have to incur high costs simply due to deviations in contract prices from the last public price.

The Pre-IPO market also adopts a weaker funding rate constraint, with a multiplier of 0.125. This is because private market valuation updates are sparse, and external oracles may lag behind the new information reflected by the order book. Reducing the intensity of the funding rate can prevent traders from bearing excessive costs due to deviations from outdated external valuations when the market finishes price discovery first.

How are trading fees structured?

The trading fees for Entropy follow the Hyperliquid HIP-3 fee schedule. When not considering user trading volume tiers, HYPE staking discounts, and referral commissions, the standard rates are:

• Maker, i.e., order placed: 0.030%;
• Taker, i.e., order executed: 0.090%.

This rate is twice the base fee rate directly operated by Hyperliquid validators for perpetual markets. Related protocol fees are evenly split between Hyperliquid and market deployers.

However, the documents from Entropy list that ANTH, SNDK, and SMCI all enabled Growth Mode upon launch. This mode scales fees, commissions, and trading volumes that count toward tier levels down to 10% of the original, effectively reducing them by 90%. Based on the base fee rates provided in the documentation, the corresponding rates under Growth Mode are:

• Maker: 0.003%;
• Taker: 0.009%.

The actual rate that users pay will also be impacted by their weighted trading volume tier over the past 14 days, HYPE staking discounts, and referral commissions, thus potentially differing from the above base rates.

In summary

What Entropy aims to do is establish a perpetual contract pricing and trading mechanism for assets that are difficult to trade continuously in traditional markets, and to support perpetual contract trading for various assets.

Its core idea can be summarized as: anchor to the public market when reliable public prices are available; when continuous public prices are absent, dynamically allocate weights between external data and internal prices based on the actual actionable depth of the order book.