Vaults Live on HypurrFi

Vaults are a powerful unlock in DeFi because they reduce friction by letting vault curators sell their market insight to anyone with capital.

HypurrFi is the lending foundation of the Hyperliquid ecosystem, turning collateral into assets like liquid stablecoins, HYPE, BTC, ETH and more that fuel Hyperliquid’s economic flywheel. We started with pooled markets for blue-chip assets like HYPE and bridged Bitcoin and Ethereum, and recently implemented isolated markets for exotic collateral.

HypurrFi’s pooled and isolated borrowing markets give you access to USDT0, USDXL, more HYPE, BTC, etc, which can then be used for strategies across the Hyperliquid ecosystem. For example, you probably don’t want to sell your HYPE right now, but you can use it to borrow USDXL at around 10%, then go earn elsewhere with those stablecoins. You don’t have to look very hard to beat 10% on Hyperliquid and make that borrowed USDXL incredibly profitable. 

Now, we’re making all of this even easier with the rollout of Vaults and the first live vault that directs 50% of all USDXL revenue to stakers as stkUSDXL.

How do Vaults Work?

Vaults are essentially isolated lending markets that automate strategies, outsourcing the manual work of putting assets to work. Each vault is overseen by a curator who defines and executes the vault’s strategy.  The three key strategies for vaults in DeFi are creating leveraged positions, earning APR, points, and other incentives, and looping interest bearing collateral.

Some vaults’ strategies will be fixed, while others will be more actively managed, responding to shifts in the market. This will be clear for each vault.

Having a fixed strategy does not mean fixed returns. Most vaults across DeFi provide variable yield based on market conditions. This means that while you as a depositor don’t have to manually execute a given strategy, you’ll still want to keep an eye on each vault’s strategy and return, and rebalance accordingly.

The Secret Success of Vaults in DeFi

HypurrFi vaults are broadly similar to vaults offered by Morpho, Euler, and other services - largely in the Ethereum ecosystem. Those examples show the potential of combining lending markets with managed strategy vaults – Euler is nearing $2 billion in TVL. Pendle, with yield-aggregating vaults across a half-dozen chains, is nearing a staggering $5 billion locked.

These services aren’t just conveniences - they’re quickly becoming standard for investing on-chain. While on-chain lending already creates liquidity through leverage, Vaults help scale asset allocation to incentivized on-chain functions. That includes staking rewards, meaning that Vaults can increase system security while democratizing yield opportunities.

HypurrFi Vaults will benefit Hyperliquid users by making yield opportunities more accessible. Just as important, as vaults gain traction, it will help every new HL project gain faster, more efficient access to capital.

We are still building out some features for our Vaults, and the lineup of our offerings will continue to expand.

HypurrFi Vaults

We’re starting with a powerful flywheel vault for the HypurrFi native stablecoin – one that takes deposits and creates yield directly from USDXL.

The Staked USDXL (stkUSDXL) vault is part of our push to fund U.S. Treasury backing for USDXL. This is a capped pool, whose depositors will get 50% of the returns from HypurrFi’s USDXL revenue. The other 50% of that revenue will fund the building of a U.S. Treasury-based reserve for USDXL.

If you click on the ‘Details’ button for the stkUSDXL listing on the Vaults page, you’ll see Nucleus Labs is the “Strategy Provider,” or curator of the Vault. Soon, the directory should also include details about the sources of yield for each strategy - but it’s up to you as the depositor to evaluate those details. If you’re uncertain or have questions about any strategy, try asking the AI assist bot in the dapp near the bottom, or in our community channels.

Our next vault is under development. Vaults are tricky as they need to exceed a threshold of revenue to be profitable, and break-even vaults are rarely used, especially when the appetite for yield is so easily satiated on a vibrant growing chain like Hyperliquid. However, we can say that forthcoming vaults are creating methods by which the users can access cross Hyperliquid yield such as basis trade funding rate farming or the HLP, and others are focused on cross-chain yield opportunities to bring yield and rewards from elsewhere onto Hyperliquid.

What Vaults do for HypurrFi (and Hyperliquid)

Vaults are, above all, demand-drivers for lending on HypurrFi.  In turn, they will improve liquidity, stability, and rates for our users, and the overall Hyperliquid ecosystem.

That’s because Vaults reduce friction by letting vault curators sell their market insight to anyone with capital. We expect this to be particularly appealing to institutions and fund managers looking to get involved in Hyperliquid for the first time, but who might not be ready to develop their own strategies.

For example, the stkUSDXL vault will be one way to access revenue from the Hyperliquid Core order book revenue while managing risk – but accessing it requires an initial USDXL borrow. The collateral for that initial borrow becomes more liquidity for HypurrFi. Vault depositors can also buy USDXL on the open market, which helps the USDXL peg target move closer to $1. This provides a simplified yield strategy for users, while achieving several beneficial aims for USDXL.

More liquidity leads to reduced slippage, more native price discovery, faster execution, and higher liquidation thresholds. That means better, safer capital efficiency for all HypurrFi users, and ultimately, more liquidity and better execution for Hyperliquid as a whole.

Deposit and Borrow from HypurrFi lending markets on Hyperliquid here.

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