# 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.

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### **1. Protocol Vaults: Hyperliquidity Provider (HLP)** 🌐

#### **Overview**

The **Hyperliquidity Provider (HLP)** vault is a **community-owned** protocol vault that plays a vital role in the ecosystem:

#### **Key Roles**

* Engages in **multiple market-making strategies**
* Performs **liquidations** (via a dedicated liquidation strategy).
* Receives approximately **7%** of platform fees (current estimate, see [HyperDash](https://hyperdash.info/statistics) and [Fees page](../dex/clearinghouse/fees-builder-codes#fee-distribution-and-sources) for details)

#### **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**.

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

**Technical Details**

* **Address**: [0xfefefefefefefefefefefefefefefefefefefefe](https://hypurrscan.io/address/0xfefefefefefefefefefefefefefefefefefefefe)
* Safeguarded by a **validator quorum**, ensuring strict conditions for usage
* Currently receives approximately **93%** of platform fees
* **Constantly purchases HYPE tokens** using a TWAP (Time-Weighted Average Price) strategy, as it's the most liquid asset
* Plans to diversify into other assets in the future
* Sets limit orders near market price when balance > $10k USDC
* **Real-time tracking**: [AF Dashboard](https://data.asxn.xyz/dashboard/hl-buybacks) - Current balance and HYPE buyback activity

#### Historical Context

* Before the AF, there was an insurance fund that served similar purposes
* An identified **insurance fund** address initially funded the AF when it was created: [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](../../introduction/roadmap/incident)
* Trading fees now flow directly to 0xfe (AF address)

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### **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.

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### **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.

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### 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)
