> ## Documentation Index
> Fetch the complete documentation index at: https://hypernode-docs.polynode.dev/llms.txt
> Use this file to discover all available pages before exploring further.

# Vaults

> Vault creation, deposits, withdrawals, leader commission, HLP protocol vaults, and vault governance.

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:

| Parameter                           | Purpose                                                                            |
| ----------------------------------- | ---------------------------------------------------------------------------------- |
| `max_hlp_withdraw_fraction_per_day` | Maximum fraction of HLP that can be withdrawn in a single day                      |
| `hlp_start_of_day_account_value`    | HLP's account value at the start of the day, used for withdrawal limit calculation |

### 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

| Action            | Description                                              |
| ----------------- | -------------------------------------------------------- |
| `createVault`     | Create a new vault with initial parameters               |
| `vaultModify`     | Modify vault parameters (strategy settings, permissions) |
| `vaultTransfer`   | Deposit into or withdraw from a vault                    |
| `vaultDistribute` | Distribute vault earnings to depositors                  |

## 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:

| Component               | Description                               |
| ----------------------- | ----------------------------------------- |
| `vaultDistribution`     | The distributed earnings amount           |
| `vaultLeaderCommission` | Leader's commission from the distribution |
| `commission`            | Commission details in the ledger delta    |
| `accountValue`          | Account value at time of distribution     |

### 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:

```
vaultCreate          — vault creation event
vault                — general vault operation
vaultDeposit         — deposit into vault
vaultWithdraw        — withdrawal from vault
vaultDistribution    — earnings distribution
vaultLeaderCommission — leader commission payment
requestedUsd         — requested USD amount
closingCost          — cost of closing positions for withdrawal
basis                — cost basis tracking
netWithdrawnUsd      — net withdrawn amount
leverageType         — leverage configuration
liquidatedPositions  — positions liquidated during vault operations
```

## Governance

Vault parameter changes go through the standard governance voting process. Validators vote on `VaultModification` proposals through `VoteGlobalAction`.

<Warning>
  Vault withdrawals can trigger order cancellations and position closures. During volatile markets, large withdrawals may experience slippage from forced position closure.
</Warning>