HyperLiquid’s vault system allows users to deposit funds into managed trading strategies. Vaults range from the protocol-owned HLP (HyperLiquidity Provider) to user-created vaults with custom strategies.
Vault types
Protocol vaults (HLP)
The HyperLiquidity Provider (HLP) is HyperLiquid’s protocol-owned vault that provides liquidity across all markets. It acts as the primary market maker and backstop liquidity source.
HLP has protocol-level withdrawal limits to prevent bank runs:
User vaults
Any user can create a vault and accept deposits from other users. The vault leader executes trades on behalf of all depositors.
Vault actions
Vault lifecycle
Creation
A vault is created via createVault. The creator becomes the vault leader with trading authority over deposited funds.
Deposits and withdrawals
Users interact with vaults through vaultTransfer:
- Deposits add funds to the vault’s trading pool
- Withdrawals remove funds, subject to any vault-specific or protocol-level limits
When a vault processes withdrawals, any open orders that conflict with the withdrawal are automatically cancelled with reason vaultWithdrawalCanceled. An internal order type CloseForVaultWithdrawal handles position closure needed to free up withdrawal funds.
Earnings distribution
Vault leaders can distribute earnings via vaultDistribute. The distribution includes:
Vault modification
vaultModify allows the vault leader to update parameters. Changes to vault parameters require governance approval through VoteGlobalAction::VaultModification.
Ledger delta entries
Vault operations produce several ledger delta types:
Governance
Vault parameter changes go through the standard governance voting process. Validators vote on VaultModification proposals through VoteGlobalAction.
Vault withdrawals can trigger order cancellations and position closures. During volatile markets, large withdrawals may experience slippage from forced position closure.