Hyperliquid Vaults

Hyperliquid vaults let you deposit USDC into a trading strategy and share its profit and loss. There are now three distinct kinds with different fee structures, lockups, and capabilities — and the crucial thing they share is that depositing does not buy you a yield product. It makes you the counterparty to other people's trades.

The three vault types

The documentation describes the HyperEVM design as "a strict improvement over the 'legacy' HyperCore vaults, which were introduced in 2023 and do not support HIP-3 or spot trading." If you are choosing a vault today, the legacy/EVM distinction determines what the strategy is even able to do.

What HLP actually is

HLP — the Hyperliquidity Provider — does four jobs: it runs market making strategies, performs liquidations, supplies USDC in Earn, and accrues a portion of trading fees. It is fully community-owned, and unlike almost every other venue where market making is reserved for privileged firms, anyone can supply the capital and take the P&L.

That is genuinely unusual and worth respecting. It also means you should be clear about what you are buying.

1. 01

   Trading fees

   A share of platform fees routes to HLP continuously. This is the closest thing to a reliable income stream.

2. 02

   Earn supply

   USDC supplied in Earn generates lending-style return on idle capital.

3. 03

   Liquidations

   HLP absorbs liquidated positions. In orderly conditions this is profitable — it acquires inventory at a discount.

4. 04

   Market making inventory

   HLP quotes both sides and holds the resulting inventory. In a sharp sustained trend it is repeatedly on the wrong side.

The structural point: a market maker earns a spread for providing liquidity and pays for it when prices trend hard in one direction. HLP's return profile is therefore steady accrual punctuated by sharp drawdowns, not a smooth yield curve. Anyone showing you an annualised HLP return without the drawdown series is showing you half the data.

How to evaluate any Hyperliquid vault

The leaderboard sorts by return. Return is the least predictive number available.

1. Read maximum drawdown first

   A vault up 60% with a 45% peak-to-trough drawdown is running far more risk than one up 20% with an 8% drawdown. Drawdown tells you what the strategy does when it is wrong.

2. Check time under water

   How long did it take to recover the worst drawdown? A strategy that recovers in a week and one that takes five months have completely different lockup implications.

3. Check how long it has run, and through what

   A vault with three profitable months in a trending market has demonstrated nothing about its behaviour in a reversal. Look for a track record spanning conditions, not just duration.

4. Find the leader's own stake

   Legacy vault leaders take 10% of profits. Their downside exposure is what tells you whether incentives are aligned — a leader with meaningful capital in their own vault has skin in the drawdown, not just the upside.

5. Confirm the lockup against your actual horizon

   Model needing the money on the worst possible day. If the lockup plus the recovery period exceeds your tolerance, the strategy's returns are irrelevant to you.

6. Check whether returns come from fees or from directional risk

   HLP's fee accrual is structurally different from a leader vault's directional P&L. Two vaults can post the same return with entirely different risk.

Legacy vault leaders take 10% of total profits and charge nothing on losses. That asymmetry gets criticised, and it is a real consideration — but it is not the thing that decides your outcome.

The thing that decides your outcome is that the fee is charged on profits while the lockup applies to your ability to leave. A leader is paid on the upside and you are locked through the downside. That combination rewards strategies that produce frequent small gains and rare large losses, because the leader collects on every good stretch and does not refund the bad one.

So when we look at a leader vault, the question is not "is 10% fair." It is "does this strategy's return profile look like it was shaped by that incentive." Steady small gains with occasional violent drawdowns is exactly the shape the fee structure encourages. That is not an accusation of bad faith — it is what the incentive selects for, whoever is running it.

A separate operational note people get wrong repeatedly: vault volume does not count toward your personal fee tier. Sub-account volume rolls up to your master account, vault volume does not. Routing size through a vault to climb the tier ladder described in hyperliquid fees simply does not work.

Hyperliquid staking is a different thing entirely

These get conflated because both involve depositing and both produce a return.

Staking HYPE secures the network through validators and earns staking rewards, plus a trading fee discount of 5–40% depending on the amount staked. Your risk is the HYPE price and validator performance.

Depositing in a vault supplies USDC to a trading strategy. Your risk is the strategy's P&L. There is no HYPE exposure and no fee discount.

One is a network security position, the other is a trading position. The only overlap is that both reduce your effective cost of trading — staking directly through the fee discount, vaults not at all.

Before you deposit

Check the jurisdiction question first: the interface is closed to US and Ontario residents, and rewards can be reviewed retroactively. See is hyperliquid available in the us.

Then the cost question: hyperliquid fees covers the volume tiers, the staking discount, and why vault volume is excluded from both.

Then the exit question: can you unstake crypto covers how lockups and queues behave when a lot of people want out at once — the same dynamics apply to a vault lockup.

FAQ

›What are Hyperliquid vaults?

Vaults let you deposit USDC into a trading strategy and share its profit and loss. There are three types: HLP, the protocol-owned vault that market makes and performs liquidations; legacy HyperCore vaults run by individual traders; and newer HyperEVM vaults built on CoreWriter that follow the ERC-4626 standard and support spot and HIP-3 markets.

›What is HLP on Hyperliquid?

HLP is the Hyperliquidity Provider, a community-owned protocol vault that provides liquidity through market making strategies, performs liquidations, supplies USDC in Earn, and accrues a portion of trading fees. It charges no fees and takes no profit share.

›How long is the HLP lockup?

Four days from your most recent deposit. If you deposit on the 14th at 08:00 you can withdraw on the 18th at 08:00. Making an additional deposit restarts the four-day clock on the whole position.

›What fees do Hyperliquid vaults charge?

Protocol vaults such as HLP charge no fees and take no profit share. Legacy HyperCore vault owners receive 10% of total profits. HyperEVM vaults set their own terms in the vault contract.

›Does vault trading count toward my fee tier?

No. Vault volume is treated separately from the master account. Sub-account volume does count toward the master account and all sub-accounts share a tier, but vault volume is excluded from both.

›Can HLP lose money?

Yes. HLP holds market making inventory and absorbs liquidated positions, so it is repeatedly on the wrong side of sharp sustained price trends. Its return profile is steady fee accrual punctuated by drawdowns, not a smooth yield.

›What is the difference between Hyperliquid staking and a Hyperliquid vault?

Staking HYPE secures the network, earns staking rewards, and gives a 5–40% trading fee discount, exposing you to HYPE price and validator performance. A vault deposit supplies USDC to a trading strategy, exposing you to that strategy's P&L with no HYPE exposure and no fee discount.

Sources

• Hyperliquid documentation: vaults
• Hyperliquid documentation: protocol vaults (HLP)
• Hyperliquid documentation: HyperCore vaults (legacy)
• Hyperliquid documentation: fees