Chapter · Master Hyperliquid
HYPE, HLP and the vaults
HYPE is Hyperliquid's native token. Instead of raising money from big investors, the team ran a points program through 2024 and airdropped a large share of HYPE to real users in late 2024, one of the largest such distributions to date. Separately, HLP is a community vault: you deposit, and it market-makes and takes the other side of liquidations to earn fees. Those returns are real but not free money. HLP can and sometimes does lose money on a bad day.
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What you get asked
How was a large share of HYPE first distributed?
Hyperliquid ran a points program and airdropped a large HYPE allocation to active users in late 2024, a notably community-first launch compared with typical venture-backed rollouts.
Match each piece of the Hyperliquid economy to its role
HLP earns by providing liquidity and absorbing liquidations, paid in fees and funding. Staking HYPE supports the network. Each piece has a job and a matching risk.
The HLP vault earns most of its return from trading fees and ___ paid by leveraged traders.
HLP acts as a counterparty and liquidity provider, collecting fees and funding. That is the honest source of the yield, not magic and not a promise.
What is the honest risk of depositing into the HLP vault?
HLP takes real market risk. On a violent day its positions can go underwater and the vault's value drops. Returns are earned by taking that risk, not by avoiding it.
What does staking HYPE do?
Staking commits your HYPE to help secure the chain and earns rewards, but staked tokens are exposed to HYPE's price, which can fall like any crypto asset. 🐜
The rest of this chapter
The pro perps DEX, from first principles to your first stop-protected trade.