DEX Landscape Evolution: How Kinetiq Is Accelerating Infrastructure with an Exchange Factory Model?

Kinetiq Founder Omnia mentioned in an interview that their flagship DEX product, Markets, is not only a trading platform but also a reference implementation of the entire “Exchange-as-a-Service” business model.

This means that any team in the future can quickly deploy their own decentralized exchange through Kinetiq’s Launch platform, just like setting up an online store with Shopify.

Strategic Transformation: The Evolution Path from LST Foundation to “Exchange Factory”

Kinetiq’s story begins with a solid starting point. As the largest liquidity staking protocol on Hyperliquid, it manages over $700 million in assets. This protocol, centered around the HYPE liquidity staking token kHYPE, forms a critical infrastructure layer for the HyperCore and HyperEVM ecosystems.

The turning point came after Hyperliquid launched the HIP-3 protocol. This technological upgrade fundamentally changed the game, transforming HyperCore from a single product into an open platform.

Kinetiq keenly recognized the potential of this transformation. They no longer satisfied themselves with merely providing liquidity staking services but began building a grander vision—the “Exchange Factory.”

This transition reached an important milestone on January 12, 2026. Kinetiq’s Markets DEX officially launched, supporting perpetual contracts for diversified assets such as BABA, crude oil indices, and the Russell 2000 index.

Markets is not just an exchange; it is the first full demonstration of Kinetiq’s “Exchange-as-a-Service” business model. It validated the feasibility of quickly deploying professional-grade DEXs based on the HIP-3 protocol, paving the way for more exchanges to emerge.

Mode Breakdown: How HIP-3 Redefines DEX Creation Rules

Traditional DEX creation is a resource-intensive project. Teams need to build matching engines, margin and clearing systems, and oracle integrations from scratch, creating high technical barriers to entry.

The innovation of the HIP-3 protocol lies in its complete removal of these technical obstacles. Now, any participant staking 500,000 HYPE tokens can deploy their own perpetual contract markets using the same core infrastructure as Hyperliquid’s main site.

This marks a shift from a competition based on technical capability to one based on capital and market design skills. Builders can focus on identifying “demand surfaces”—that is, the speculative needs for specific assets or data sets—and anchor them with reliable oracles.

The XYZ100 market on Hyperliquid demonstrates the power of this model. Within just three weeks of launch, the total trading volume exceeded $1.3 billion, showing that once infrastructure standards are established, new asset classes can scale rapidly.

Kinetiq’s Markets exemplify this new paradigm. It focuses on bringing traditional financial assets into the perpetual contract framework, paying close attention to oracle construction details, and aims to become the authoritative trading code for HIP-3 products tracking the same underlying assets.

Ecosystem Blueprint: How the Launch Platform Builds a Scalable DEX Ecosystem

The Launch platform is the core engine of Kinetiq’s “Exchange Factory” model. Founder Omnia compares it to a combination of “Shopify + Kickstarter.”

It is a ready-made platform that allows the creation of permissionless LST infrastructure and enables deployers seeking to launch their own customized DEXs with HIP-3 functionality.

The operation mechanism of the Launch platform cleverly balances multiple interests. Project teams can secure at least 500,000 HYPE tokens as staking guarantees through crowdfunding, with the staking period determined at the start of fundraising. After the initial period, they can renew agreements with the community or even replace part of the community stake with their own funds.

This design provides the project with the community support and ownership needed for launch while avoiding issues related to token redemption through flexible renewal mechanisms.

Kinetiq also encourages project teams to maintain aligned incentives with stakers through a hybrid token and revenue-sharing model. As the first HIP-3 exchange built via Launch, Markets allocates 10% of its revenue to kmHYPE holders, with 90% reinvested for growth, setting a market standard for subsequent projects.

The value capture mechanism of this model is also evolving. Kinetiq’s governance token, KNTQ, is at the core of the protocol, and its stakers (sKNTQ holders) will accumulate value from all of Kinetiq’s business lines.

Growth Flywheel: The Triple Play of Liquidity, Asset Innovation, and Institutional Channels

Liquidity fragmentation is a key challenge faced by the HIP-3 model. As more exchanges launch perpetual contracts for the same stocks, ensuring sufficient liquidity depth in each market becomes a critical issue.

Kinetiq’s response is twofold. They maintain a list of potential listing codes and closely monitor the potential order book trading volume for each. By ensuring that every listed asset has strong order demand, they naturally incentivize market makers to provide liquidity in these markets.

Meanwhile, leveraging its position as the largest liquidity staking protocol on Hyperliquid, Kinetiq has established a strong network of market maker relationships. These market makers have expressed interest in providing robust liquidity on Markets.

Asset innovation is another growth engine. As industry insiders describe, the range of tradable assets is expanding from traditional “fat head” asset classes to “thick middle” and “long tail” sectors.

These new areas include real-world data sets, commodity indices, and even niche signals such as local real estate prices or cultural trend indices.

Building institutional channels is equally essential. Kinetiq’s partnership with Hyperion DeFi to launch iHYPE, a licensed, KYC/KYB-compliant fund pool, serves as an important bridge for traditional financial capital to enter the Hyperliquid ecosystem.

Value Reconfiguration: From Narrative-Driven to Cash Flow-Driven DEX Valuation Logic

The cryptocurrency market in 2026 is experiencing a profound shift in valuation logic. Capital no longer flows indiscriminately into all projects but selectively chases protocols capable of generating real revenue and flowing into tokens.

Hyperliquid itself exemplifies this trend. The protocol allocates 99% of perpetual contract trading fees to buy back HYPE, directly linking protocol cash flow to token value.

As of November 2025, the total buyback volume reached 34.4 million HYPE, about 10% of the circulating supply.

Kinetiq’s business model aligns perfectly with this new valuation logic. As an “Exchange Factory,” it not only generates direct revenue through Markets but also supports the creation of more exchanges via the Launch platform, forming a scalable revenue matrix.

When asked about the value accumulation mechanism of KNTQ, the founder clearly stated that KNTQ stakers will benefit from all of Kinetiq’s business lines, including programmatic buybacks utilizing all revenue sources.

This design, which directly ties protocol growth to token value, has a significant advantage in performance-oriented market environments in 2026. It positions Kinetiq not only as a technological innovator but also as a sustainable ecosystem builder with a viable economic model.

Industry Insights: How Infrastructure Race Reshapes DEX Competition

Kinetiq’s “Exchange Factory” model represents a broader industry trend—DEX competition shifting from backend engineering to market design and user experience.

Once the technical barriers to creating an exchange are removed, differentiation no longer depends on who has a better matching engine or clearing system but on who can better identify market needs, design attractive trading products, and provide a smooth user experience.

This shift also transforms DEX from a competitor to centralized exchanges into a new growth path. The HIP-3 model allows DEXs to expand into non-crypto assets and real-world data, bringing new traffic, new users, and new demand forms.

It is a dynamic of increasing overall market size rather than a fixed market share redistribution in a PvP scenario.

For trading platforms like Gate, this trend offers both insights and challenges. Gate recently upgraded its Web3 ecosystem to Gate DEX, offering a unified multi-chain trading experience, reflecting the industry’s demand for specialized, integrated DEX solutions.

Gate DEX combines the convenience of centralized finance with the freedom of decentralized protocols, demonstrating the potential of a hybrid CeFi-DeFi model.

In the future, competition among trading platforms will no longer be a single-dimension contest but a comprehensive competition of ecosystem integrity, innovation speed, and user value. Kinetiq’s “Exchange Factory” approach lowers the barrier to innovation, potentially spawning more specialized, vertical DEXs and further enriching the decentralized trading ecosystem.

Summary

When Markets DEX launched on January 12, it was not just trading perpetual contracts for BABA or crude oil indices but also a new paradigm for DEX creation.

This paradigm encapsulates technical complexity within the infrastructure layer, enabling market innovators to focus on what they do best: identifying demand, designing products, and optimizing experiences.

Within the Hyperliquid ecosystem, over $700 million in staked assets are being channeled through Kinetiq into the creation of increasingly specialized trading markets.

This race driven by infrastructure standardization has only just begun.