- Hyperliquid allows users to park their crypto assets in a trader-driven vault on Arbitrum, with potential profits of 10% profit sharing for vault owners.
- Top safe owner “CryptoVikings” achieved over 1,000% return in one month.
- Despite the high returns, the risk of loss and high funding fees to maintain the position are red flags.
Hyperliquid, a derivatives trading platform built on Arbitrum, has over $15 million in crypto assets in its “copy trading” vault.
Copy trading is when a trader follows the trades of another, preferably successful trader. A vault is essentially a liquidity pool with additional functionality.
Hyperliquid allows any user to create their own vault that other users can deposit into. The owner of the vault can trade with the funds deposited in the vault and in case of success he can get 10% of the profits.
Vault owners trade with the funds in the vault, but cannot withdraw these funds from the vault at any time. Vault depositors, on the other hand, can withdraw their funds after the storage period. Lockup period of 1 day.
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HyperLiquid's top traders operate under fake names crypto vikings, and last month, CryptoVikings generated a return of 1,023%. This same trader made a 415% return last month on STFX, another copy trading platform.
Since launching the vault on January 21st, Crypto Vikings has generated over $560,000 for vault depositors and pocketed approximately $56,000 from the 10% profit share. Crypto Vikings is also the biggest depositor of its own vault, earning over $306,000 since its inception.
Crypto Vikings did not respond to a request for comment.
The vault currently has five open long positions in Bitcoin, INJ, ORDI, SUI, and OP with approximately $70,000 in unrealized gains.
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In total, more than 600 trades were executed by the vault, of which only 66 were loss trades. His biggest loss so far was just him $2,009, but his biggest win was him $56,914.
The history of safes is amazing, but past results are no indication of what will happen in the future. If CryptoVikings loses on a trade, the vault depositors also lose with them.
For example, a vault depositor deposited $47,532 into a vault 20 days ago. Since the deposit, this user has lost her $6,712, a loss of 14%.
Due to the increase in funding fees, users will have to pay higher fees to open long positions. As such, Vault paid him over $225,000 to maintain his aforementioned five long positions.
Bitcoin's annualized funding rate is 82%, so if you hold a long position for one year, you will pay 82% of the position value in fees.
Do you have any DeFi tips? Reach out to ryan@dlnews.com.
