Staked HYPE (STHYPE) is a liquid staking derivative token designed for the Hyperliquid network, enabling users to participate in staking and earn rewards while maintaining access to their liquidity within the broader decentralized finance (DeFi) ecosystem. It functions as a receipt for staked HYPE tokens, allowing holders to utilize their staked assets in various DeFi protocols. ^{[1] [2]}

Overview

Traditional Proof-of-Stake (PoS) networks typically require users to lock their tokens for a period to secure the network and earn rewards, which can lead to a loss of liquidity and limit participation in other DeFi activities. Staked HYPE addresses this by providing a liquid representation of staked HYPE tokens. When users stake their native HYPE tokens, they receive STHYPE tokens in return, which can then be freely traded, used as collateral, or deployed in other DeFi applications. This mechanism aims to simplify the staking process, automate reward compounding, and enhance the utility of staked assets.

The protocol aims to foster network effects within the Hyperliquid DeFi ecosystem, similar to how liquid staking tokens have impacted other major blockchain networks. By unlocking a significant source of sustainable yield and increasing the total funds securing the network, STHYPE seeks to become a foundational component of Hyperliquid's decentralized finance landscape. The platform emphasizes security through smart contract audits and maintains a fully non-custodial and transparent system where every STHYPE token is backed one-to-one by native HYPE. ^{[1] [2] [3]}

Technology

Staked HYPE operates by allowing users to deposit their HYPE tokens into a staking contract. In exchange, they receive STHYPE tokens, which represent their staked position and accumulated rewards. The underlying HYPE balance associated with STHYPE increases in real-time as the staking pool earns rewards, meaning the value of STHYPE relative to HYPE gradually appreciates over time. The system also offers an instant unstake feature, providing flexibility to users.

The protocol distributes staked HYPE across a decentralized network of high-performing validators to maximize rewards and enhance network security. For users who require a fixed token representation, a wrapped version, wstHYPE, is also available. The smart contracts underpinning Staked HYPE have undergone audits by third-party auditors, with audit reports publicly accessible. The protocol is designed to be fully non-custodial, meaning users retain control over their assets, and transparent, with each STHYPE token being fully backed by native HYPE. ^{[1] [4] [5] [3]}

Tokenomics

The STHYPE token is not pre-mined or distributed through an Initial Coin Offering (ICO). Instead, STHYPE tokens are minted dynamically whenever users stake their HYPE tokens within the protocol. This distribution mechanism is based entirely on user participation in the staking process. Initially, the exchange rate between HYPE and STHYPE was set at 1:1. As staking rewards accumulate, this ratio adjusts to reflect the increased value of the staked position, ensuring that early stakers are rewarded for their contributions to network growth and security. ^{[3] [1] [6]}

Use Cases

Staked HYPE (STHYPE) serves several key functions within the Hyperliquid ecosystem and broader DeFi landscape:

• Liquid Staking: It allows HYPE token holders to earn staking rewards without locking their assets, providing immediate liquidity.
• DeFi Integration: STHYPE can be utilized across the Hyperliquid ecosystem for various DeFi activities, including providing additional yield, borrowing, and lending. It can also serve as collateral in other decentralized finance protocols.
• Governance Participation: STHYPE holders have the ability to vote on changes to network parameters and the selection of validators, contributing to the decentralized governance of the protocol.
• Trading and Speculation: STHYPE is a tradable asset on various decentralized exchanges, allowing users to buy and sell it, potentially at different rates than unstaked HYPE.
• Yield Opportunities: Users can deploy STHYPE in liquidity pools to earn additional rewards, further optimizing their yield. ^{[3] [1] [2] [6]}

Governance

Staked HYPE implements a user-governed model where STHYPE holders play a direct role in the protocol's evolution. Holders are empowered to vote on critical network parameters and the selection of validators that secure the Hyperliquid network. This decentralized governance structure ensures that the community has a say in the future direction and operational aspects of Staked HYPE. ^{[1] [7]}

A notable feature is the introduction of "Community Codes," a mechanism designed to incentivize operators. These codes enable operators to develop independent frontends and directly receive STHYPE delegations, fostering a growth flywheel that encourages contributions to the Hyperliquid ecosystem and the expansion of staked HYPE. ^[8]

Validator Partners

Staked HYPE collaborates with a network of validator partners who share the mission of advancing the Hyperliquid ecosystem. These partners contribute to the decentralization and performance of the protocol's staking operations. Key validator partners include:

• ASXN;
• B-Harvest;
• Infinite Field;
• HyperStake;
• ValiDAO;
• HypurrCollective. ^[1]

Hyperliquid Stake Marketplace (HSM)

Staked HYPE supports the Hyperliquid Stake Marketplace (HSM), a feature introduced through Hyperliquid Improvement Proposal (HIP-3). HSM allows large stakers, often referred to as "giga-whales," to provision customized perpetual markets. In return for providing this service, these stakers share fees with the Hyperliquid platform. This mechanism aims to integrate large-scale staking with advanced trading functionalities, creating new opportunities for yield and liquidity within the ecosystem. ^{[9] [10]}