Product Mechanics

How LHYPE works

Example:

1. Deposit Asset: A user deposits 200 HYPE and receives ~200 newly-minted LHYPE in return, minus the gas & execution fees to execute the transaction.

2. Execution Fees: Slippage fees are included in the price when minting & redeeming. loopedHYPE earns no profit from the minting or redeeming of LHYPE.

3. AutoLoop: The Risk Curator oversees AutoLoop, which stakes the underlying HYPE into a Liquid Staking Protocol (i.e Thunderhead), receives stHYPE, then supplies it to a decentralized lending protocol, borrows HYPE against stHYPE, and stakes HYPE again. This strategy is recursively executed up to 15x.

4. Risk Management: The Risk Curator calibrates AutoLoop to rebalance the position daily. Based on the current market conditions, the multiplier is adjusted for the most efficient and safest looping strategy.