cHYPE

1. You deposit HYPE into a vault.

2. The vault routes that HYPE into HIP-3 builder markets — the perp markets that teams deploy on Hyperliquid (e.g. trade.xyz, Kinetiq, Felix, Ventuals).

3. Those markets pay a defined share of trading fees back to whoever provides the underlying capital. The vault collects that fee revenue.

4. Your cHYPE balance stays the same; the cHYPE/HYPE rate ticks up as fees accrue. Burn cHYPE later, get more HYPE back than you put in. Exchange-rate model — not rebasing. The testnet demo shows this rate climbing in real time.

HIP-3 wasn't proven yet. In September 2025 the spec existed and a few markets were live, but real, sustained volume showed up months later. Wrapping yield around a primitive that hadn't found product-market fit was getting ahead of the order of operations.

Builder-fee plumbing was complex. Different deployers, different fee splits, different growth-mode programs. Wrapping that into a single vault APR before the ecosystem settled meant a lot of moving parts depositors couldn't audit cleanly.

Counterparty risk wasn't trivial. Vault deposits would sit behind operator decisions and individual deployer health. Bad market selection or operator failure could hit depositors before fees ever caught up.

The literacy bar was high. Even HL-native depositors had to learn HIP-3 mechanics, builder fees, growth mode, and exchange-rate accounting before the value prop made sense — and harder still to explain to anyone outside the Hyperliquid bubble.

What we did instead: focus on the data first. The HIP-3 board, the HIP-4 board, the WAR.MARKET hackathon writeup, and the testnet vault demo are what's running today.