* "Hung" is the past participle of "hang." You use it when something is already hanging.
* "Hang" is the present tense. It's used when the action of hanging is happening now.
Here are better options depending on the context:
* "I hung it up on the tree." This is grammatically correct and more natural-sounding.
* "I am hanging it up on the tree." This is correct if you're still hanging it.
* "I'm going to hang it up on the tree." This indicates that you're planning to hang it.
Ultimately, the best choice depends on what you are trying to convey.