Leveraged HYPE Staking

Staking in the Hyperliquid ecosystem refers to the act of depositing (i.e. staking) a certain amount of HYPE in order to power validator software which drives the Hyperliquid consensus mechanism together with other validators on the network. In exchange for these services, the network rewards the participating validators with extra HYPE for securing the Hyperliquid blockchain.

Liquid staking tokens (or LSTs for short) are a group of tokens created and issued by different staking protocols and providers, such as Staked Hype (stHYPE) and Kinetiq (kHYPE). These tokens are issued to users depositing HYPE into the mentioned staking protocols and/or services and represent their proof of deposit.

All of the mentioned liquid staking tokens (stHYPE, kHYPE) have a built-in mechanism for accruing staking rewards through different mechanisms. The yield received through liquid staking tokens comes from staking rewards issued by the Hyperliquid network to validators participating in securing the network.

stHYPE always represents native HYPE 1:1, and will accrue protocol rewards in the form of a rebase, meaning that rewards will automatically accrue to the holder's wallet. kHYPE continuously accrues rewards over time while maintaining a constant quantity of tokens in your wallet. As rewards accumulate over time, the value of the kHYPE token grows, and the kHYPE:HYPE exchange rate increases as well. This is why the kHYPE:HYPE exchange rate is not 1:1 - the longer you hold kHYPE, the more rewards you will accrue, and the greater the difference in the exchange rate. The reward-accrual LST design employed by Kinetiq is in contrast to a rebasing LST design, where the token adjusts in supply to maintain a stable value. The exchange rate remains the same but the token balance constantly rises in your wallet as staking rewards are accrued over time. The frictionless accrual of yield makes the reward-accrual model superior to rebasing.

There are multiple types of risk to consider with leveraged staking strategies, including, but not limited to, liquidation risk, risk of value loss, as well as protocols risk. Specifically, liquidation risk can become likely either if the used LST(s) lose their value correlation (or peg) to HYPE, or if the used lending protocol(s) decide to change parameters relating to collateral factors and liquidation thresholds of used LST(s). Moreover, value loss can potentially happen if the user accepts bad swap rates when entering or exiting any of these positions, as well as in cases where HYPE borrowing rates grow too high for these positions to maintain a positive net APY. Finally, protocols risk should be considered for the staking protocols and providers, lending protocols, as well as the HYPE Saver platform itself.

HYPE Saver is a fully non-custodial application for creating and managing leveraged staking positions in various DeFi lending protocols on HyperEVM that support such positions. All positions created using HYPE Saver are fully separate with no asset pooling or position overlap of any kind happening, meaning there's no shared economic risk across any positions opened using HYPE Saver.

HYPE Saver uses a performance based fee model which means that there are no service fees of any kind charged when entering any of the available positions, but there is a performance fee taken when exiting the position(s). The performance fee works as a percentage charge on the amount earned on top of your deposited capital and is currently at 10% across all positions available at HYPE Saver.