- Hyperliquid enables users to deposit crypto assets into vaults led by traders on Arbitrum, earning potential profits with a 10% profit share for vault holders.
- Top vault holder “Crypto Vikings” made a return of over 1000% in one month.
- Despite the high returns, the risk of loss and high financing fees for maintaining positions serve as warning signs.
Hyperliquid, a derivatives trading platform built on Arbitrum, has over $15 million in crypto assets deposited in its “copy trading” vaults.
Copy trading is when a trader follows the trades of another trader, hopefully successfully. Vaults are essentially liquidity pools with additional functionality.
With Hyperliquid, any user can create their own vault for other users to deposit into. The vault owner can then trade any funds deposited into their vault and, if successful, will earn 10% of any profits.
Although the owner of the vault trades the funds in the vault, he cannot at any time withdraw these funds from the vault. On the other hand, Vault depositors can withdraw funds after a while One day detention period.
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The best traders in Hyperliquid use pseudonym Vikings cryptoLast month, Crypto Vikings returned 1,023%. This same trader made a 415% return last month on STFX, another copy trading platform.
Since launching the vault on January 21, Crypto Vikings has generated over $560,000 for its vault depositors, and generated about $56,000 for itself from a 10% profit share. Crypto Vikings was also the largest depositor of its own vault, earning over $306,000 since inception.
Crypto Vikings did not immediately respond to a request for comment.
The vault now has five open long positions on Bitcoin, INJ, ORDI, SUI and OP with unrealized profits of around $70,000.
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In total, more than 600 trades were executed by the vault, and only 66 of them were losing. The biggest loss so far was just $2,009, while the biggest win was $56,914.
Although the history of the vault has been amazing, past results are no indication of what might happen in the future. If Crypto Vikings loses on trades, the depositors of the vault lose alongside them.
For example, a depositor deposited $47,532 into the treasury 20 days ago. Since depositing, this user has lost $6,712, a loss of 14%.
Due to the increase in financing fees, users have to pay significant fees to open long positions. As such, the vault paid over $225,000 to keep the five previously mentioned long positions open.
Bitcoin's annual funding rate is 82%, which means that if a long position is held over the course of a year, 82% of the value of the position will be paid in fees.
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