> For the complete documentation index, see [llms.txt](https://docs.loopingcollective.org/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.loopingcollective.org/products/wrapped-hlp/product-mechanics.md).

# Product Mechanics

## Strategy

<figure><img src="/files/kd5jjofxNOMJU8R4uflO" alt=""><figcaption><p>WHLP deposit and withdrawal flow</p></figcaption></figure>

WHLP automates the process of depositing to HLP while providing users with a transferable, DeFi-compatible token.

The strategy involves:

1. **Multi-Asset Deposits**: Accept USDHL, USDT0 and other assets on HyperEVM
2. **Bridging**: Bridge funds to HyperCore and convert to USDC at optimal prices
3. **HLP Deposit**: Deposit USDC to HLP through automated multisig operations
4. **Yield Generation**: Earn from trading fees, funding rates, and trader losses

***

## Technical Implementation

**Deposit Flow**

1. **User Deposits**: Users deposit USDT0 and other assets on HyperEVM through distributor frontends
2. **Token Issuance**: Users receive WHLP tokens representing their proportional vault share
3. **Asset Conversion**: Manager bridges deposited funds and sets limit orders to convert to USDC
4. **HLP Deposits**: Automated deposits USDC to HLP every 24 hours

### Withdrawal Mechanics

#### Withdrawal Flow

1. **Withdrawal Request**: Users request WHLP redemption at any time
2. **Daily Processing**: Parts of the total NAV can be withdrawn daily to fulfill user withdrawals
3. **Asset Conversion**: Manager converts USDC to requested stablecoin
4. **Bridge & Distribution**: Assets bridged to HyperEVM and distributed to users

#### Withdrawal Limits

* **Standard Withdrawals**: Immediate processing when sufficient HyperEVM liquidity exists
* **Daily Limit**: Maximum 20% of total deposits processable within 24 hours
* **High Demand**: Up to 5 days processing time when requests exceed 20% of vault deposits

#### wHLP → USDT0

**Overview**\
wHLP withdrawals follow the same model as LHYPE: allowance-based, time-limited, and resolved by Paxos.

**Key Mechanics**

* **Request submission:**
  * Submitting a new withdrawal **replaces the previous request**.
  * Only **one active request** is allowed at a time (**USDT0**).
* **Asset handling during withdrawal:**
  * **wHLP remains in your wallet** while the request is pending.
  * Once resolved, **wHLP is burned** and you receive **USDT0**.
* **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.