> For the complete documentation index, see [llms.txt](https://harmonix-finance.gitbook.io/harmonix-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://harmonix-finance.gitbook.io/harmonix-docs/products/vaults/usdhype-vault-on-hyperevm.md).

# $HYPE Vault on HyperEVM

### Overview

The Harmonix $HYPE Vault is designed to help users earn sustainable yield on their HYPE tokens while minimizing market risk. This vault leverages a delta-neutral strategy that interacts across the Hyperliquid ecosystem, utilizing Felix Protocol on HyperEVM and HyperCore Perp to capture consistent returns—regardless of whether the market moves up or down.

<figure><img src="/files/FRRf5PPPpDnbeHV0zgt4" alt=""><figcaption></figcaption></figure>

### Strategy Summary

* Users deposit HYPE into the Harmonix Vault on HyperEVM.
* Harmonix uses the deposited HYPE as collateral to mint feUSD via Felix Protocol.
* The feUSD is swapped to USDC, which becomes the basis for the short hedge.
* The strategy then splits:
  * 50% of capital is used to short HYPE on HyperCore, earning 10–15% APR via positive funding rates.
  * 50% is used to buy back HYPE and restake into HyperEVM protocols such as DEXs and money markets, generating ecosystem yield and points.
* In return, users receive haHYPE, an ERC-4626 Yield-Bearing Token that reflects vault share and automatically accrues yield over time.

### Yield Sources

Harmonix enhances returns further through multiple yield sources:

* **Positive Funding Rates on HyperCore**\
  The vault earns around 10% APR from shorting HYPE perps and capturing positive funding rate differentials.
* **Arbitrage Between feUSD ↔ USDC**\
  Harmonix identifies and executes arbitrage trades between stablecoins and HYPE markets to generate excess returns.
* **Felix Liquidation Bonuses**\
  When HYPE's price declines, the vault is eligible to receive additional HYPE through Felix's liquidation reward mechanism.
* **Yield from HyperEVM DEXs and Money Markets**\
  The vault reinvests capital into liquidity pools and lending protocols across HyperEVM to capture base yield and rewards.
* **Points from HyperEVM Ecosystem Projects**\
  Users earn airdrop points not only from Harmonix and Felix, but also from participating HyperEVM protocols (e.g., Hyperswap, LoopedHYPE).

### Fees – Only Charged at Withdrawal

* Management Fee: 1% per year, pro-rated based on time in vault
* Performance Fee: 10% on net profit, only charged upon withdrawal

📌 Users are encouraged to stay in the vault at least 7 days to ensure yield offsets applicable fees.

### Withdrawals

Withdrawals are designed to be flexible and efficient, with built-in liquidity for timely access:

* All withdrawals are currently settled in $WHYPE
* A 5% buffer pool enables near-instant withdrawals (typically within 1 day)
* If the buffer is depleted:
  * <5% of vault TVL: Processed the next day (first-come, first-served)
  * \>5% of vault TVL: May take up to 3 days

Support for $HYPE withdrawals will be introduced in a future update for added flexibility.

### Risks & Mitigation

| **Risk Area**                   | **Mitigation Approach**                                                                                   |
| ------------------------------- | --------------------------------------------------------------------------------------------------------- |
| feUSD Liquidity & Swap Slippage | Strategy actively monitors feUSD pool depth and limits mint/swap size to reduce price impact and slippage |
| Short Funding Risk              | Automated funding rate monitoring adjusts position sizing and exit strategy if rates turn negative        |
| Liquidation Exposure            | Conservative collateral ratios and early liquidation detection minimize risk of loss on Felix             |
| Smart Contract or Oracle Risk   | Harmonix and Felix smart contracts are independently audited; integrations use time-tested oracles        |
| HyperEVM Strategy Risk          | DeFi deployments on HyperEVM (DEXs, money markets) are diversified and monitored to reduce protocol risk  |

### Why This Matters for Hyperliquid

By routing liquidity across HyperEVM (Felix) and HyperCore (Perps), Harmonix:

* Deepens utility for HYPE and Hyperliquid-native assets.
* Encourages more borrowing/lending/staking behavior via Felix.
* Drives trading volume and open interest on HyperCore.
* Reinforces composability across Hyperliquid products—stHYPE, feUSD, HyperSwap.

### Roadmap Expansion

Future plans include expanding this delta-neutral model to:

* uETH and uBTC via Hyperliquid spot listings
* Enhanced vault UX via Spot Swap and Staking-to-Yielding pipeline

### **Vault Cap & Whitelist Clarification**&#x20;

The vault is currently **maxed out**, so new deposits aren’t possible right now. When the cap is full, it automatically switches to “private pool” mode—this doesn’t open a new whitelist immediately.&#x20;

#### **What’s happened so far (July 10, 2025)**

* Two public phases, each with a $1M cap, filled almost immediately
* One testnet users whitelist phase with a $500K cap, also filled&#x20;

#### **What’s next**&#x20;

We’re preparing the next cap lift, aiming for a total cap of $5M by the end of July. Once it’s live, deposits will reopen for everyone.&#x20;