Liquidation events have long been one of the most profitable opportunities in crypto trading, but centralized exchanges (CEXs) like Binance and Bybit keep these profits for themselves or distribute them to market makers. This leaves everyday users out of the equation.

Hyperliquid flips this model on its head. Through the HLP vault, liquidation profits flow directly back to users, creating a sustainable, high-yield ecosystem. Hyperdrive is now supercharging these profits with one-click leverage, unlocking unprecedented yield potential.

How the HLP Vault Generates Yield

The HLP vault earns yield from multiple sources, making it a powerful tool for passive income:

• Market Making Strategies – The vault profits from bid-ask spreads while ensuring deep liquidity.

• Liquidations – Exclusive access to liquidation order flow on Hyperliquid allows the vault to capture profits before anyone else.

• Platform Fees from Market Making – A share of transaction fees from Hyperliquid trading activity further boosts returns.

This diversified approach ensures consistent income generation, outperforming traditional DeFi yield strategies that rely solely on lending or staking.

Amplifying Profits: HLP Leverage on Hyperdrive

Hyperdrive takes HLP yield to the next level by enabling leveraged exposure. With 3x leverage on HLP, returns would have reached approximately 120% APR in 2024, before accounting for borrowing costs.

This unlocks "Hyperdrive-level yields"—a strategy that allows users to maximize earnings without the complexities of manual leverage management. With one-click looping, users can enter leveraged HLP positions effortlessly, compounding their gains while maintaining full control.

The Hyperliquid Advantage: Proven Performance

The numbers speak for themselves:

• 40%+ APR in 2024

• 21 profitable months out of 22 since launch

• Best month: +16.06% return

• Only negative month: -0.79% drawdown

Unlike traditional DeFi vaults that struggle with yield sustainability, the HLP vault thrives on real trading activity and liquidation profits—ensuring long-term profitability for depositors.

Cross-Chain HLP: Expanding Hyperdrive’s Yield Opportunities

Hyperdrive is pushing the boundaries of HLP liquidity even further. Once Hyperliquid enables precompiles, Hyperdrive will tokenize HLP positions on HyperEVM, bringing leverage and liquidation farming to the next generation of DeFi traders.

Additionally, through our partnership with LayerZero, HLP will soon become cross-chain compatible, allowing capital to flow seamlessly across 120+ blockchains. This means:

✅ Cross-chain collateralization – Use HLP across multiple ecosystems

✅ Unified liquidity – HLP will be tradeable and borrowable beyond Hyperliquid

✅ Increased capital efficiency – Yield farming strategies become more powerful

This expansion will make Hyperdrive the most capital-efficient way to farm yield in DeFi, reinforcing its position as the leading leverage market on Hyperliquid.