TL;DR (Summary) – HyperLiquid Vaults Analysis by Growi.fi

The HyperLiquid Vaults ecosystem provides a way for investors to access automated strategies, but each vault has different risk and return profiles. To help the community better understand performance, we analyzed key financial metrics like annual returns, volatility, and Sharpe ratio.

🌍 HyperLiquid Vaults: A Growing Ecosystem

HyperLiquid has gained strong traction, further boosted by its recent airdrop that distributed billions of dollars. While most attention has been on trading volume and fees, Vaults are emerging as a key part of the ecosystem.

📈 The total TVL in HyperLiquid is $1.6B, with Vaults holding $442.8M (27% of the total).

💰 However, most of this belongs to HyperLiquid’s own Vaults—external Vaults hold just $35.4M, highlighting major growth potential.

🛠️ Vault creation is active, with 2,396 open Vaults, but only 16.2% have been profitable in the last 30 days. Only 20.1% of Vaults have a lifetime profit, showing that careful selection is crucial.

🔍 Vaults provide transparency and flexibility, allowing strategies to be tracked on-chain, but enhancements like customizable fees, scheduled fee collection, and personalized lock-in periods could drive further adoption.

📊 Understanding Vault Performance

To help the community compare different Vaults, we analyzed their risk-adjusted performance, focusing on:

✅ Only 24 strategies met the defined criteria of being at least 6 months old, having $20k+ TVL, and showing profitability since inception.

📊 Returns vs. risk: Some vaults showed high returns but extreme volatility, with some exceeding 500% annualized volatility, making consistency a key challenge.

💡 Sharpe ratio analysis helped identify the most consistent performers, where Growi HF had the highest Sharpe among all Vaults analyzed.

📊 Compared to HyperLiquid’s own Vault, Growi HF delivered higher yield (over 100%) with slightly lower risk (19%), based on direct data from the HL Vault API. This shows that independent Vaults can provide strong opportunities beyond HL’s strategies.

At Growi.fi, we believe transparency in DeFi investments benefits everyone. Our analysis shows that HyperLiquid Vaults hold great potential, and careful strategy selection is key to maximizing returns.

🚀 Growi HF stands as a top performer, balancing strong yield with controlled risk.

Breaking Down the Financial Performance of HyperLiquid Vaults

HyperLiquid has been gaining popularity for some time, and its recent airdrop has further increased its visibility. This event gave away hundreds of millions of dollars to participants. As the token price increased, the total value of the airdrop grew to several billion dollars, benefiting more than 94,000 addresses.

Since then, people have been closely watching HyperLiquid's trading volume and fees. These numbers help estimate how much the HYPE token might be worth. However, one important part of HyperLiquid that many have overlooked is its Vaults.

While the DEX holds most of the total value locked (TVL), we believe Vaults could play a big role in HyperLiquid’s future growth. More businesses are starting to build on HyperLiquid—just like we have at Growi.fi—which means Vaults could become much more important.

In this analysis, we will explore HyperLiquid Vaults from an investor perspective. Our goal is to provide clear insights that help compare different Vaults, identify the best-performing ones, and understand broader trends.

The steps in this analysis are: 1. Present basic statistics about HyperLiquid and its Vaults. 2. Analyze all existing Vaults and summarize key numbers. 3. Select Vaults based on key criteria such as age, activity status, and TVL. 4. Evaluate the financial performance of these selected Vaults and highlight the top performers.

Overview of HyperLiquid Vaults: Basic Statistics and Key Insights

Using DefiLlama's updated data and the HyperLiquid API, we will examine key metrics such as TVL, age, and profitability across all Vaults. Let us start with TVL:

TVL

To better understand the distribution of TVL across Vaults, we begin by ranking the top 10 Vaults by TVL:

The largest Vaults, with a significant difference from the rest, belong to HyperLiquid itself. These include HLP, which acts as the parent Vault for other strategies such as A, B, and Liquidator. The total TVL of HyperLiquid Vaults is represented by HLP, which includes the TVL of its child strategies.

By removing HyperLiquid’s own Vaults, we get a different perspective on the remaining Vaults as a group.

Vaults offer a clear and transparent way for other protocols to build on HyperLiquid, as they allow easy tracking of strategies. However, more flexibility could encourage broader adoption. Features like customizable fees, scheduled fee collection, and personalized lock-in periods could make Vaults even more attractive. While Accounts can also be used for building on HyperLiquid, they lack the visibility and auditability of Vaults.

The following graph shows the distribution of Vaults by TVL (excluding HyperLiquid’s own Vaults). As expected, the distribution follows a Pareto-like pattern, with a few large Vaults and many smaller ones.

Let us illustrate this further with a Pareto Chart:

Age

Next, we examine the age of the Vaults:

Most Vaults are relatively new, though there are some exceptions. The histogram below shows the distribution of Vault ages:

Interestingly, most Vaults are only 1-3 months old, but there is also a peak around the one-year mark.

Below is a list of the Vaults that have been active the longest:

APR & Profitability

HyperLiquid provides APR data for all Vaults. However, it is important to note that APR is calculated based only on the last 30 days, which does not accurately reflect long-term performance. Still, let us take a quick look at the number of Vaults currently showing a positive APR.

A more useful metric is the total profit and loss (PnL) accumulated by each Vault over its lifetime. This gives a clearer picture of actual earnings.

First, let us determine if HyperLiquid Vaults (excluding HyperLiquid’s own Vaults) have generated net positive wealth.

The following histogram shows the distribution of PnL across all Vaults:

The PnL distribution resembles a normal curve with a slight skew toward negative results.

Measuring yield since inception would provide better insights, but using aggregated data from HyperLiquid makes this challenging. Deposits and withdrawals significantly impact TVL and PnL, making general statistics less reliable.

To gain a more accurate understanding of each Vault’s actual performance, we will now conduct a detailed analysis using direct API calls to individual Vaults within HyperLiquid. The next section will focus on this in-depth evaluation.

Analysis of the financial performance (including risks) of selected vaults

Selection criteria

In this section, we analyze the financial performance of Vaults that meet specific criteria. We have defined what we consider reasonable for assessing a Vault's viability:

We then apply an additional filter: the vault must also have been profitable over its (minimum six-month) history.

Since the number is small, we list them here:

Among them, Growi.HF (https://hf.growi.fi/) is our own developed strategy.

To compare performance, we also include HyperLiquid’s own Vault (HLP) alongside the selected strategies.

Data Processing & Filtering Challenges

To extract relevant financial parameters for our analysis, we processed the data. However, some Vaults encountered issues in data retrieval and processing, and as a result, they will not be included in our analysis:

(Funny name if you speak Spanish!)

Risk-adjusted financial performance

Sorting by annualized yield, we see some staggering returns! Here are the top five:

However, we need to put these returns in context by including volatility:

These Vaults also exhibit extreme volatilities. A volatility of 800% with an average return of 7,000% represents the standard deviation of returns over a year. Theoretically, this means there is a 32% probability that the return in a year falls outside the range of 7,000% ± 800%.

At first glance, this may seem like a great deal — after all, you always win, right? But such large swings usually indicate inconsistency, with extreme ups and downs.

Is Volatility Underestimated?: In reality, volatility in all strategies is likely even higher. The HyperLiquid API (and website) does not use traditional financial "candles" (open, high, low, close) but instead samples historical PnL or TVL. This means the actual highs and lows are likely greater than the reported figures.

Below, we visualize annual yield vs. annualized volatility:

For most investors, choosing a strategy with volatility above 50% might not be ideal. A strong strategy should be consistent, with returns behaving predictably rather than wildly fluctuating.

Understanding the Risk-Return Trade-Off

The graph clearly shows that higher returns come with higher volatility (note the log scale axes). A strategy is superior when, for the same level of risk, it achieves a higher yield (i.e., for a fixed x-axis value, the higher y-axis points are better).

This leads us to the Sharpe Ratio, a widely used measure that compares returns relative to risk:

Since quantitative strategies typically ignore the risk-free rate, we simplify the formula to:

This ratio compares average returns to standard deviation, where higher values indicate a more stable and reliable strategy.

Other risk-adjusted metrics, such as Sortino Ratio, Calmar Ratio, or RoMaD, also exist. For this analysis, we focus on Sharpe Ratio, but future studies could incorporate these alternatives.

Now, let’s zoom in on strategies with volatilities below 100%:

Identifying the Best Strategy Using Risk-Adjusted Returns

Using the Sharpe Ratio, the best-performing strategy corresponds to the point with the highest slope from (0,0) in our chart.

Let’s visualize this:

As shown, Growi HF has the highest Sharpe Ratio, but several strong Vaults on HyperLiquid also exhibit competitive risk-adjusted performance.

How Does HyperLiquid Vaults Compare to Traditional Finance?

If we examine the tweet below, many HyperLiquid Vaults outperform major hedge funds in TradFi. As DeFi traders know, the space is full of high-yield opportunities!

How to Invest in Growi HF

If you want to invest in Growi HF, visit our website: ➡️ https://hf.growi.fi/

For direct access to the protocol, visit our web app: ➡️ https://app.hf.growi.fi/

⚠️ Note: We do not recommend investing directly through HyperLiquid. As mentioned earlier, due to factors such as customizable fees, scheduled fee collection, and lock-in periods, we plan to restrict deposits through HyperLiquid in the short term, allowing deposits only through our protocol.

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