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 stHYPE), 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.

Below is a GitBook-ready section you can drop directly into the docs. I’ve kept it structured, explicit, and consistent across vaults.

Technical Implementation

Withdrawal Mechanics

LHYPE → stHYPE

Overview LHYPE withdrawals are allowance-based, time-bound, and resolved by Paxos Labs. Only one request can be active at a time.

Key Mechanics

• Request submission:

  • Submitting a new withdrawal replaces the previous request.

  • Only one active request is allowed at a time (stHYPE).

• Asset handling during withdrawal:

  • LHYPE remains in your wallet while the request is pending.

  • Once resolved, LHYPE is burned and you receive stHYPE.

• Cancellation:

  • You can cancel a withdrawal by removing the allowance.

• Timeouts:

  • Withdrawal requests expire after 5 days.

• Settlement:

  • Requests are solved by the Paxos team.

• Fees:

  • A 4 bps withdrawal fee applies to prevent excessive arbitrage.