StakedHYPE vs HLP (Hyperliquidity Provider)

StakedHYPE

StakedHYPE is the first liquid staking protocol for HYPE, Hyperliquid's native token, deployed on HyperEVM on the day of the chain's public launch in February 2025. The protocol issues stHYPE — a liquid staking token (LST) that represents a user's staked HYPE position plus accruing validator rewards — allowing holders to maintain exposure to staking yields while retaining the ability to use stHYPE as DeFi collateral across the Hyperliquid ecosystem. Originally developed by Thunderhead Labs under founder Addison Spiegel, stHYPE was acquired by Valantis Labs in August 2025 and continues to operate under Valantis management. HOW IT WORKS Native HYPE staking occurs on HyperCore, where token holders delegate HYPE to validators who participate in Hyperliquid's Proof-of-Stake consensus. However, native staking locks tokens in the staking account during the delegation period, making them unavailable for DeFi use. StakedHYPE solves this illiquidity problem through a standard liquid staking wrapper. When a user deposits HYPE into the StakedHYPE protocol on HyperEVM, they receive stHYPE at a ratio that starts at 1:1 and increases over time as validator rewards accumulate. The protocol distributes staked HYPE across a curated set of high-performance validators, optimizing for reward yield and operational reliability. Validator rewards — paid in HYPE by the Hyperliquid protocol — flow back into the pool and are reflected in the rising exchange rate between stHYPE and HYPE. This means stHYPE is a rebasing-free accumulating token: holders do not see their token count increase, but each stHYPE becomes redeemable for more HYPE over time. stHYPE is an ERC-20 token on HyperEVM, making it composable with the full suite of HyperEVM DeFi protocols. Users can deposit stHYPE as collateral in lending protocols, provide it as liquidity in DEX pools, or hold it passively to earn staking yields without any active management. Unstaking involves a redemption process subject to the underlying HyperCore unbonding period. KEY FEATURES - First-Mover LST on HyperEVM: stHYPE launched on day one of HyperEVM, establishing first-mover network effects across integrations and DeFi protocols before competitors could deploy - Decentralized Validator Distribution: HYPE is distributed across a network of high-performance validators rather than concentrated in a single operator, reducing single-point-of-failure risk - DeFi Composability: stHYPE is accepted as collateral and liquidity across all major HyperEVM protocols including lending platforms, AMM pools, and yield aggregators - Accumulating Token Model: stHYPE appreciates in HYPE terms automatically without rebasing, simplifying accounting for integrated protocols - Valantis-Backed Infrastructure: Following acquisition, stHYPE benefits from Valantis's specialized LST DEX pools — the two largest DEX pools on HyperEVM by TVL, with over $500M in cumulative volume TEAM AND BACKING StakedHYPE was founded by Addison Spiegel through his company Thunderhead Labs. Spiegel launched the protocol on HyperEVM's first day and rapidly grew it to peak TVL of approximately $500M — a remarkable achievement for a day-one DeFi deployment on a nascent chain. In August 2025, Valantis Labs acquired the stHYPE protocol for an undisclosed sum. Valantis, a modular DEX protocol, integrated stHYPE into its core product strategy, leveraging specialized LST-focused liquidity pools. Spiegel joined Valantis as an advisor following the acquisition. Valantis is led by co-founder and CEO Deven Matthews, who has publicly articulated a vision to build stHYPE into a "liquidity network for all of Hyperliquid." The acquisition price and financial structure were not disclosed, and no investment bank or legal advisor names were released due to contractual restrictions. TRACTION AND METRICS StakedHYPE launched on February 18, 2025, concurrent with HyperEVM's public debut. It rapidly became the dominant liquid staking solution on the chain, accumulating approximately $500M in TVL at its peak — at that time representing a substantial share of all HyperEVM DeFi TVL. By the time of the Valantis acquisition in August 2025, TVL had settled to approximately $200M, reflecting broader market conditions and competition from secondary LST protocols such as Kinetiq (kHYPE). Valantis's LST-specific DEX pools for stHYPE and kHYPE represented the two largest DEX pools on HyperEVM, with approximately $60M in combined TVL and over $500M in cumulative trading volume as of August 2025. stHYPE has been integrated into virtually every major HyperEVM DeFi protocol, including lending markets, yield aggregators, and AMM pools, demonstrating its status as core infrastructure rather than an isolated product. HyperEVM as a whole had grown to over $2 billion in TVL across approximately 100 protocols by August 2025, making it one of the fastest-growing EVM chains since its February launch — context in which stHYPE's $200M TVL represents a meaningful portion of chain activity. COMPETITIVE POSITION StakedHYPE's principal competitor is Kinetiq (kHYPE), which has emerged as the second-largest HYPE LST on HyperEVM. Both protocols compete for staked HYPE deposits by offering similar base functionalities: liquid staking derivatives redeemable for validator rewards. stHYPE's competitive advantages include first-mover integrations — being embedded in every major protocol before competitors arrived — and Valantis's specialized DEX infrastructure optimized for LST pair pricing efficiency. In the broader liquid staking context, stHYPE's position mirrors Lido's dominance of Ethereum staking (stETH) — a liquid token representing the canonical staking derivative for the chain's native asset, with deep DeFi integrations that make it the default choice. However, unlike Ethereum's staking ecosystem where Lido has held over 30% of all staked ETH, HYPE staking is newer and more fragmented, leaving competitive dynamics unsettled. The Valantis acquisition provides stHYPE with product and distribution advantages that independent protocols cannot easily replicate — specifically, a purpose-built DEX optimized for staked asset pairs. HYPERLIQUID INTEGRATION StakedHYPE connects HyperCore's staking layer with HyperEVM's DeFi ecosystem. HYPE tokens are transferred from HyperCore accounts to HyperEVM via Hyperliquid's native bridge, deposited into the StakedHYPE contract, and delegated to HyperCore validators — creating a cross-layer architecture unique to Hyperliquid's dual-layer design. The stHYPE token then circulates on HyperEVM as a standard ERC-20 asset. Valantis has indicated plans to deepen stHYPE's integration with HyperCore and HIP-3, envisioning stHYPE as a component of a broader Hyperliquid liquidity network. This could involve stHYPE being used as margin collateral in future HIP-3 perp market deployments or as a reference asset for new DeFi primitives. The Hyperliquid team's emphasis on staking tiers as a mechanism for validator differentiation may also create opportunities for stHYPE to offer tiered yield products. RISKS AND CONSIDERATIONS Validator concentration risk is inherent: if any validator to which stHYPE's underlying HYPE is delegated behaves maliciously, it faces slashing — which would reduce the stHYPE exchange rate and impose losses on depositors. The protocol's validator selection and diversification methodology is critical to managing this risk, though specific slashing parameters on Hyperliquid are determined by the core protocol. The acquisition by Valantis changes stHYPE's governance and strategic trajectory in ways that are not fully transparent to users. While Valantis is a credible team, the undisclosed deal structure and the fact that ongoing development is now tied to Valantis's broader roadmap introduces dependency risk. If Valantis changes strategic priorities or faces financial difficulties, stHYPE's development could stall. Smart contract risk on HyperEVM is present across all deposited capital. HyperEVM is a relatively young chain, and the full security implications of its architecture have not been tested by years of adversarial activity at scale. Users depositing HYPE into stHYPE accept both the validator slashing risk at the HyperCore layer and the smart contract risk at the HyperEVM layer simultaneously.

HLP (Hyperliquidity Provider)

The Hyperliquidity Provider (HLP) is Hyperliquid's native protocol vault — a community-owned, fee-free market-making and liquidation fund that operates directly on HyperCore. Launched in May 2023 alongside the early Hyperliquid platform, HLP allows any user to deposit USDC and participate in the profits generated by Hyperliquid's core market-making, liquidation, and fee-accrual operations. It represents one of the clearest examples of a decentralized exchange opening its market-making infrastructure to retail participants, and has become one of the largest and most consistently performing USDC yield products in DeFi. HOW IT WORKS HLP runs inside HyperCore, Hyperliquid's fully on-chain central limit order book (CLOB) engine, which handles over 100,000 orders per second with sub-second finality. The vault deploys multiple market-making strategies simultaneously across all perpetual futures markets listed on Hyperliquid — currently over 130 trading pairs. At a high level, the strategy computes a fair reference price for each asset using tick data from Hyperliquid's own order book combined with price feeds from major centralized exchanges including Binance, OKX, and others. A decentralized oracle pulls spot prices from these sources every three seconds, using a weighted median computed by Hyperliquid validators to prevent manipulation. The vault then places bid and ask orders around this fair price — "making" the market — capturing the spread between buys and sells as profit. In addition to directional market-making, HLP performs liquidations. When a leveraged trader's account falls below the maintenance margin threshold, HLP absorbs the liquidated position at a discount to market price, earning liquidation fees. In extreme market conditions — such as the liquidation cascade in October 2025, when Hyperliquid processed approximately $10 billion in liquidations in a single event — HLP can generate extraordinary single-day returns. HLP also supplies USDC to Hyperliquid's Earn product, a protocol-managed lending facility, accruing lending interest on idle capital. All strategy execution runs off-chain but is fully auditable: every position, open order, trade, deposit, and withdrawal made by HLP is recorded on-chain in real time and viewable through Hyperliquid's blockchain explorer. Profits auto-compound continuously — depositors do not need to claim rewards manually. The deposit lock-up period is four days: a user who deposits cannot withdraw until four days after their most recent deposit. This is designed to prevent HLP from experiencing sudden capital flight during volatile periods when liquidity support is most needed. KEY FEATURES - Protocol-Owned, Fee-Free Structure: HLP is owned by the protocol itself and charges no management fee or performance fee. Unlike user-created Hyperliquid vaults (which take a 10% profit share for the vault leader), 100% of HLP profits flow directly to depositors proportionally based on their share of the vault - Multi-Strategy Execution: HLP simultaneously runs market-making on all 130+ perpetual markets, liquidation absorption, and Earn facility lending — three independent alpha sources within a single deposit position - Full On-Chain Transparency: Every trade and position is published to the blockchain in real time; any user can audit the strategy's current book without trusting the team's disclosure - Auto-Compounding: Profits accumulate automatically without gas costs or manual claim transactions, making HLP a truly passive yield instrument - No Tokenization: Unlike GLP on GMX or similar products, HLP deposits are not represented by a tradable token — deposits and withdrawals occur in USDC and returns are credited to each depositor's account balance TEAM AND BACKING HLP is not a third-party project — it is operated directly by Hyperliquid Labs, the core development team behind the Hyperliquid blockchain and exchange. The Hyperliquid team includes founders with quantitative trading and high-frequency market-making backgrounds, who designed HLP based on their own internal strategies. By placing their own market-making operations into a community vault, the founding team eliminated the information asymmetry that plagues most DeFi platforms, where insiders typically benefit from exchange market-making at users' expense. Hyperliquid raised no external venture capital for its development. The team is funded by protocol revenues, and HLP's success is structurally aligned with the platform's overall trading volume — more trading means more fees and liquidations, which benefit both the protocol treasury and HLP depositors simultaneously. TRACTION AND METRICS HLP launched in May 2023 as part of Hyperliquid's early closed alpha. It has operated continuously since, accumulating a multi-year track record that is rare among DeFi yield products. Historical annual percentage yield has averaged approximately 17%, with significant spikes during high-volatility periods. During the October 2025 market event — a major liquidation cascade that Hyperliquid processed without downtime — HLP generated approximately $41.5 million in a single day's fees and delivered roughly 10% returns to depositors within 48 hours. As of October 2025, HLP held approximately $300–400 million in total value locked (TVL), denominated in USDC. This positions it among the largest single DeFi yield vaults globally. The vault has historically maintained 100% uptime even during periods when competing platforms experienced technical failures or outages, reflecting the reliability of HyperCore's underlying architecture. Hyperliquid itself captured over 73% of decentralized perpetuals market share by mid-2025, with peak daily trading volume exceeding $59.5 billion — the throughput that directly feeds HLP's fee and liquidation income. COMPETITIVE POSITION HLP occupies a unique position in DeFi that has few direct comparisons. GLP on GMX is the closest structural analog: a protocol-managed vault that provides liquidity to a derivatives exchange and distributes fees to depositors. HLP improves on GLP's model in several key ways: it charges no vault fees, the strategy is fully transparent on-chain, and HLP is exposed to a CLOB rather than an AMM — meaning it can make active markets rather than passively absorbing counterparty flow. Against traditional stablecoin yield products — Aave, Compound, Pendle, Curve — HLP offers meaningfully higher historical returns (17% historical APY versus 5–10% in lending markets) with a different risk profile: exposure to market-making losses during directional markets rather than credit or smart contract risk in lending. HLP's primary risks relative to competitors are correlated with Hyperliquid platform risk — platform downtime, liquidity crises, or regulatory action would disproportionately impact HLP depositors. In contrast, assets in Aave are exposed to smart contract risk but not to a single exchange's operational performance. HYPERLIQUID INTEGRATION HLP is the most deeply integrated product in the Hyperliquid ecosystem by design — it is built into HyperCore at the protocol level and is not a third-party application. It uses Hyperliquid's native vault infrastructure, which allows deposits to be held and deployed within HyperCore without EVM bridging. Users deposit USDC through the main Hyperliquid interface at app.hyperliquid.xyz/vaults, and the vault operates entirely within HyperCore's order book environment. As Hyperliquid expands its market listing through HIP-3 — which enables permissionless deployment of new perpetual markets — HLP's addressable market of spreads and liquidations grows accordingly. Each new market added to Hyperliquid represents additional alpha for HLP's strategies, creating a compounding relationship between Hyperliquid platform growth and HLP returns. RISKS AND CONSIDERATIONS The primary risk of depositing in HLP is strategy risk: the vault's market-making and liquidation strategies can take losing positions. During periods of strong directional trends or correlated price dislocations, market-making strategies consistently lose money (buying into falling markets, selling into rising ones). HLP's 4-day lock-up means depositors cannot exit immediately when they observe strategy losses. While historical performance has been positive over multi-month periods, there is no guarantee of future profitability. The lack of tokenization, while simplifying accounting, also means HLP positions cannot be used as collateral in DeFi lending markets — the capital is locked in USDC and cannot generate secondary yield. This is a capital efficiency disadvantage relative to liquid staking or yield-bearing tokens. HLP's performance is structurally correlated with Hyperliquid platform volume. If trading volume on Hyperliquid declines substantially — whether due to competition, regulatory action, or market conditions — HLP's fee income falls proportionally. The vault does not generate revenue independent of platform activity. Finally, because HLP's strategy runs off-chain and is not open-sourced, depositors must trust Hyperliquid's team to accurately report strategy performance and run the execution without manipulation — a meaningful trust assumption for a multi-hundred-million-dollar vault.

Choose StakedHYPE if you...

• ✓Want a liquid staking solution on HyperEVM
• ✓Prefer a verified and vetted protocol
• ✓Need features like liquid-staking and stHYPE
• ✓Need: stHYPE liquid staking — stake HYPE, stay liquid

Choose HLP (Hyperliquidity Provider) if you...

• ✓Want a yield & vaults solution on HyperCore
• ✓Prefer a verified and vetted protocol
• ✓Need features like vault and liquidity
• ✓Need: Protocol-owned liquidity vault powering Hyperliquid's order book