HLP Performance Metrics
Published 7/10/2026, 1:55:52 PM
Hyperliquid’s HLP vault has generated $136.9 million in cumulative profit since its launch in May 2023. While the strategy remains fundamentally profitable, its sustainability at historical growth rates is questionable following a 55% decline in Total Value Locked (TVL) from its September 2025 peak of $603.9 million.
The vault's performance is characterized by "lumpy" returns, where a significant portion of lifetime earnings is derived from rare, high-volatility liquidation events rather than consistent daily yield.
HLP Performance Metrics
As of June 2026, HLP has transitioned from a period of rapid TVL expansion to a more mature, albeit lower-liquidity, phase.
| Metric | Value | Context/Date |
|---|---|---|
| Cumulative Profit | $136.9M | Since May 2023 launch |
| Peak TVL | $603.9M | September 2025 |
| Current TVL | ~$268.6M | June 2026 (55% decline from peak) |
| Sharpe Ratio | 5.2 | Indicates exceptional risk-adjusted returns |
| BTC Correlation | -9.6% | Acts as a hedge; performs well during market crashes |
| Historical APR | 15% – 35% | Highly dependent on market volatility |
Profit Sustainability Drivers
The sustainability of HLP's $136M profit is supported by four structural revenue streams, though each faces unique challenges:
- Liquidation Gains: HLP acts as the counterparty of last resort. This is the most significant but least predictable driver. For example, a single flash crash on October 10, 2025, generated $40M–$41.5M in profit—roughly 30% of all-time earnings in one weekend.
- Fee Sharing: The vault receives 1% of all trading fees generated on the Hyperliquid L1. This provides a baseline "real yield" that scales with protocol volume rather than just volatility.
- Market-Making Spreads: HLP captures the bid-ask spread across 100+ perpetual pairs. As TVL has declined to $268.6M, the "dilution" of these rewards has decreased, potentially stabilizing APR for remaining depositors.
- Funding Rate Capture: By taking the minority side of crowded trades, HLP collects funding payments from directional traders.
Structural Risks and Headwinds
The 55% exodus of TVL since late 2025 suggests that investors are increasingly wary of the "tail risks" associated with the vault:
- Exploits and Manipulation: The vault has proven vulnerable to sophisticated price manipulation. The POPCAT incident in November 2025 resulted in $4.9M in bad debt, while the JELLYJELLY attack in March 2025 required manual validator intervention to prevent catastrophic losses.
- Concentration Risk: Approximately 41% of lifetime profits originated from just two high-volatility events. Without these "black swan" windfalls, the baseline organic yield is significantly lower than the headline figures suggest.
- Governance Intervention: The necessity for validators to force-settle trades (as seen in the JELLYJELLY incident) introduces a layer of centralized "socialized" risk that may deter institutional capital seeking pure algorithmic execution.
Conclusion
The $136M profit is structurally sustainable because it is tied to core protocol mechanics (fees and liquidations) that do not rely on token emissions. However, the rate of profit is likely to normalize toward the lower end of the 15–22% range. HLP is best viewed as an "antifragile" USDC allocation that thrives during market chaos but may underperform or "bleed" during prolonged, low-volatility trending markets.