What HLP does
HLP (Hyperliquidity Provider) is Hyperliquid's own protocol vault. Anyone can deposit USDC into it, and depositors share its profit and loss pro rata. HLP is community-owned: it has no outside leader and charges no profit share. According to the Hyperliquid docs it runs several strategies at once (see the live HLP vault page and the glossary entry):
- Market making. HLP quotes buy and sell orders on Hyperliquid's perpetual order books, so traders always have someone to trade against.
- Liquidation takeover. When a trader's account falls below 2/3 of its maintenance margin and the order book could not liquidate it, a liquidator strategy inside HLP takes over the positions and the remaining margin. This is a backstop liquidation; the docs note the maintenance margin is not returned to the trader.
- Other income. HLP also supplies USDC to Hyperliquid's Earn lending and accrues a portion of trading fees.
HLP is a parent vault: its positions sit in several strategy sub-vaults, which is why the HLP page combines their books by coin.
Where its PnL comes from
HLP earns when its quotes are filled and the price then moves back, so it keeps the spread, and when it takes over a liquidated position for less than the position is worth after closing it. Liquidations are profitable for the liquidator on average, and that whole PnL stream goes to depositors through HLP. Fees add a smaller, steadier stream.
It loses when the traders it trades against are right. A market maker that keeps buying while the price falls builds a long position into the drop. Liquidation takeovers lose money when the price keeps moving after the takeover and the position cannot be closed at a better price than the liquidation level.
The APR shown in the box above is Hyperliquid's own trailing annualised figure from recent PnL. It is a description of the past, not a promised yield.
Depositing and the 4-day lockup
You deposit USDC from your Hyperliquid account. Each deposit starts a lockup: you can withdraw 4 days after your most recent deposit, so topping up resets the clock for the whole balance. Your share is worth your fraction of the vault's equity when you withdraw, so a loss in the meantime reduces it. Check the current terms in the Hyperliquid app before depositing.
Drawdown risk when one side runs
HLP's worst periods come when the market moves hard in one direction and most traders are on the winning side. HLP ends up holding the other side, from its quotes and from liquidated positions, and marks a loss until the move stops or it can reduce the position. A large position in a thin market is the extreme case: a single trader can push the price against HLP's inherited book faster than it can unwind.
The TVL and PnL chart on the HLP page shows this directly: its Max PnL drawdown figure is the largest peak-to-trough fall in USD on Hyperliquid's sampled PnL history for the selected range. TVL can also fall when depositors withdraw, so read the PnL line, not TVL, to judge trading results.
How HLP differs from user vaults
| HLP | User vault | |
|---|---|---|
| Run by | Protocol | A leader |
| Profit share | None | 10% to leader |
| Leader stake | None | At least 5% |
| Lockup | 4 days | 1 day |
| Strategy | Fixed | Leader's choice |
HLP runs the market making, liquidation and fee strategies above. A user vault is run by any trader who opens one: the leader takes 10% of the vault's profits and must keep at least 5% of the vault at all times, and depositors can withdraw 1 day after their last deposit.
The Hyperliquid vaults table lists user vaults by TVL with their APR, PnL and drawdown, next to HLP.
Limits of these numbers
- TVL, APR and PnL come from Hyperliquid's
vaultDetailsendpoint and are only as accurate as that source. - The PnL history is sampled, so the drawdown figure can miss moves between samples.
- Past returns do not predict future returns. Nothing here is financial advice.
Hyperliquid documentation checked on 19 October 2026: Hyperliquid docs: Protocol vaults (HLP) · Hyperliquid docs: For vault depositors · Hyperliquid docs: For vault leaders · Hyperliquid docs: Liquidations · Hyperliquid API: info endpoint (vaultDetails). Not financial advice.