> For the complete documentation index, see [llms.txt](https://hyperliquid-co.gitbook.io/wiki/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://hyperliquid-co.gitbook.io/wiki/architecture/hypercore/vault.md).

# 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](https://hyperdash.info/statistics) and [Fees page](/wiki/architecture/hypercore/dex/clearinghouse/fees-builder-codes.md#fee-distribution-and-sources) for details)
* Contributes to liquidity but represents [<2% of total daily volume](https://x.com/ThinkingUSD/status/1931081781022720108)

#### **3-Core Strategies Used by HLP:**

* **Strategie A (**[0x010461c14e146ac35fe42271bdc1134ee31c703a](https://app.hyperliquid.xyz/vaults/0x010461c14e146ac35fe42271bdc1134ee31c703a)**):** A sophisticated market-making strategy that helps maintain liquidity without requiring you to create your own complex strategy or invest in separate funds.
* **Strategie B (**[0x31ca8395cf837de08b24da3f660e77761dfb974b](https://app.hyperliquid.xyz/vaults/0x31ca8395cf837de08b24da3f660e77761dfb974b)**):** Another advanced market-making approach working in tandem with Strategie A to optimize liquidity provision and risk management.
* **Liquidator (**[0x2e3d94f0562703b25c83308a05046ddaf9a8dd14](https://app.hyperliquid.xyz/vaults/0x2e3d94f0562703b25c83308a05046ddaf9a8dd14)**):** This component steps in during [backstop liquidations](https://community-hyperliquid.gitbook.io/community-docs/technical-overview-of-hyperliquid/hyperliquid-l1/dex/clearinghouse/liquidations), taking over positions from accounts that have fallen below their maintenance margin thresholds. It then exits these positions using a market-making algorithm, contributing to the platform’s stability.

#### **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](/wiki/introduction/roadmap/incident.md) for historical cases).

**Technical Details**

* **Address**: [0xfefefefefefefefefefefefefefefefefefefefe](https://hypurrscan.io/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](https://data.asxn.xyz/dashboard/hl-buybacks) | [HypeBurn](https://www.hypeburn.fun/)- 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](https://hypurrscan.io/address/0x36715f6408819492c27C1a1538156af9a2BFe963) (controlled by Hyperliquid team).\
  This address can be confirmed as it was used to reimburse users during the [ZRO incident](/wiki/introduction/roadmap/incident.md)
* **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](https://www.vaults-analyser.com/leaderboard)
* **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 📚

* **Analysis:** [Vault Performance Breakdown](https://medium.com/@growi.fi/breaking-down-the-financial-performance-of-hyperliquid-vaults-6c9b86ac466f) | [HLP Analysis](https://x.com/RyskyGeronimo/status/1893347632958832728)
* **HLP:** [Medium: HLP Overview](https://medium.com/@hyperliquid/hyperliquidity-provider-hlp-democratizing-market-making-bb114b1dff0f) | [Medium: 3-Month Update](https://medium.com/@hyperliquid/hlp-update-3-months-in-42327abe3e57)
* **Vaults:** [Docs: Vaults Overview](https://hyperliquid.gitbook.io/hyperliquid-docs/vaults) | [Vault Page](https://app.hyperliquid.xyz/vaults)
* **Diagram:** [Community-First Vision](/wiki/ecosystem/community.md)