Vault

Vaults on HyperCore are powerful tools enabling both individual traders and the community to participate in advanced trading strategies. They democratize access to market-making profits and liquidation mechanisms, previously reserved for privileged parties on traditional exchanges.

1. Protocol Vaults: Hyperliquidity Provider (HLP) 🌐

Overview

The Hyperliquidity Provider (HLP) vault is a community-owned protocol vault that provides access to strategies previously reserved for privileged operators.

Key Roles

  • Engages in multiple market-making strategies (market making | funding)

  • Performs liquidations (via a dedicated liquidation strategy).

  • Receives approximately 7% of platform fees (current estimate, see HyperDash and Fees page for details)

  • Contributes to liquidity but represents <2% of total daily volume

3-Core Strategies Used by HLP:

Community Participation

  • Anyone can deposit liquidity into the HLP vault to share in its profits.

  • No profit share fees for vault owners—benefits are fully distributed to depositors.

Lock-Up Period

  • Deposits have a 4-day lock-up period.

  • Withdrawals can only occur 4 days after the most recent deposit.

2. Protocol Vaults: Assistance Fund (AF) 🛡️

The Assistance Fund (AF) acts as a safety net for the Hyperliquid ecosystem, providing stability and covering potential losses during emergencies or platform errors. Examples include reimbursements for incorrect mark price calculations (see Incident page for historical cases).

Technical Details

  • Address: 0xfefefefefefefefefefefefefefefefefefefefe

  • Fee allocation: Receives approximately 93% of platform fees

  • Validator protection: Safeguarded by validator quorum with strict usage conditions

  • Asset strategy: Constantly purchases HYPE tokens as the most liquid asset, plans to diversify later

    • Trigger threshold: Starts placing limit buy orders when USDC balance hits $10k

    • Order size: Places $10k limit buy orders near market price

    • Volatility adjustment: During price surges, places orders further from mark price to accumulate USDC

    • Price discovery: Incrementally moves order price up by 1 pip until filled

    • Strategy: Uses TWAP (Time-Weighted Average Price) for optimal execution

  • Real-time tracking: AF Dashboard | HypeBurn- Current balance and HYPE buyback activity

Historical Context

  • Legacy system: Replaced previous insurance fund with similar purposes

  • Initial funding: Seeded by insurance fund address 0x36715f6408819492c27C1a1538156af9a2BFe963 (controlled by Hyperliquid team). This address can be confirmed as it was used to reimburse users during the ZRO incident

  • Current flow: Trading fees now route directly to AF address

3. User Vaults 👥

User-created vaults allow individuals to run personalized trading strategies and share profits with depositors.

Vault Leaders:

  • Profit Share: Vault leaders receive 10% of the profits generated by their strategies.

  • Requirements to Create a Vault:

    • Deposit at least 100 USDC to initialize.

    • Maintain at least 5% ownership of the vault.

  • Vault leaders execute trades directly from the Trade page, applying their strategy to the vault's balance.

  • Closing a Vault:

    • Leaders must close all open positions before closing a vault.

    • Depositors receive their share of the vault’s assets upon closure.

Vault Depositors:

  • Earnings: Depositors earn a share of the vault’s profits proportional to their contribution.

  • Lock-Up Period: Deposits are locked for 1 day before withdrawal is allowed.

  • Performance Tracking:

    • View vault statistics, including APY, total deposits (TVL), and historical performance, on the vault’s page.

    • Track all vaults in real-time: Vaults Analyser

  • Withdrawals:

    • If margin requirements are met, withdrawals do not affect open positions.

    • Otherwise, a proportional amount of positions is closed to maintain stability.

Risk Considerations ⚠️

  • Trading is inherently risky, and past performance does not guarantee future returns.

  • Depositors should carefully review the performance history and strategy of a vault before committing funds.

Resources 📚

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