HIP-3 Vault Mechanics

Capital providers deposit HYPE into a deployment-specific Citadel vault. HIP-3 deployers operates the exchange. Fees are programmatic routed according to the vault terms.

Why It Exists

A HIP-3 perpetual exchange requires 500,000 HYPE staked.

Crowdsourcing turns the capital raise into a community-aligned structure: capital providers back the specific exchange and can earn from its trading fees.

How It Works

Each deployer gets a deployment-specific Citadel vault on HyperEVM.

For HIP-3 Deployers

1. Create the vault: Monarch configures a HIP-3 vault for the deployment.
2. Set terms: define fee split, deposit limits, access controls, and caps.
3. Open deposits: capital providers deposit HYPE.
4. Stake HYPE: once the target is reached, HYPE is staked with the deployer.
5. Launch markets: the exchange goes live.
6. Distribute yield/fees: trading fees flow through automated trading fee routing according to the vault terms.

For HYPE Capital Providers

1. Deposit HYPE into a specific deployer's vault.
2. Receive an LST representing the deposit and fee entitlement.
3. Earn yield/fees from the exchange according to vault terms.
4. Stay liquid if secondary markets or integrations support the LST.
5. Unstake according to the vault's unbonding and withdrawal rules.

One Vault Per Deployer

Each deployment has its own vault.

• Separate accounting: one deployer's deposits are not mixed with another's.
• Custom terms: fee splits, caps, and access rules are deployment-specific.
• Independent risk: capital providers choose which exchange to back.
• Clear alignment: capital providers are backing a specific market operator.

LST

Liquid staking token represents:

• capital provider's pro-rata share of HYPE in the vault
• capital provider's fee entitlement

Each deployer's LST is separate. Depending on integrations and liquidity, it can be held, traded, used as collateral, or redeemed under the vault rules.

Automated Fee Routing

1. Trading fees accrue to the deployer's Core account.
2. Fees are bridged from Core to HyperEVM into the Citadel vault.
3. Each capital provider's share is calculated from their share of vault deposits.
4. Capital providers claim on-chain or let fees accumulate.

Combining With Marina

Citadel manages the stake and fee flow. Marina can then use part of the fee stream or a separate campaign budget to incentivise market makers.

The operating loop is:

capital -> markets -> liquidity -> volume -> fees -> capital and liquidity incentives

Learn about Marina

Provide Capital

Reach out via Telegram to discuss HIP-3 vaults.