A pooled trading vault on the decentralized derivatives exchange Hyperliquid returned 638% annualized last month. The vault — called 'Long HYPE & BTC, Short Garbage' — holds $3.03 million in total value locked and delivered the eye-popping yield by betting heavily on Hyperliquid's native token and Bitcoin while shorting a basket of high-valuation, high-emission altcoins.
What the vault holds
Seventy percent of the long side is allocated to HYPE, with the remaining 30% in Bitcoin. On the short side, the vault takes short positions on at least ten different coins that the strategy considers 'garbage' — tokens with high fully diluted valuations and heavy emissions schedules. That short leg represents about 60% notional exposure. The overall profit-and-loss chart for the vault shows a steep climb over the last 30 days, nearing $1.2 million. The only trade in the red so far is the Bitcoin long, but that loss has been offset by funding payouts from the perpetual swaps market.
How Hyperliquid vaults work
Hyperliquid vaults are built into the exchange's HyperCore infrastructure, which handles leverage, liquidations, perpetual contracts, and high-throughput execution. Depositors pool capital that follows a single, publicly visible trading strategy. Think of it as on-chain copy trading, where every trade and the vault's performance are trackable in real time. The system allows concentrated directional bets and the use of leverage, which can amplify returns — and losses.
The risk behind the number
That 638% APY is not a steady, low-risk yield. The vault's returns depend almost entirely on HYPE's price performance. If the native token drops, the long side takes a hit, and the leveraged structure could accelerate losses. Hyperliquid's documentation warns users not to interpret such high returns as safe. The strategy's concentrated exposure — 70% in a single token — means volatility is baked in. Past performance, especially over just 30 days, is no guarantee of future results.
The vault's next challenge will come when HYPE's price trends shift or if the short basket rallies. For now, the strategy is working, but the underlying risks remain as clear as the on-chain data that tracks every trade.
