- Hyperliquid enables users to deposit crypto assets into trader-led vaults on Arbitrum, earning potential profits with a 10% profit share to vault owners.
- The top vault owner "Crypto Vikings" has achieved an over 1,000% return in one month.
- Despite the high returns, the risk of loss and high funding fees for maintaining positions serve as warning signs.
Hyperliquid, a derivatives trading platform built on Arbitrum, has over $15 million of crypto assets deposited in its “copy trading” vaults.
Copy trading is when a trader follows the trades of another, hopefully successful, trader. Vaults are essentially liquidity pools with additional functions.
With Hyperliquid, any user can create their own vault for other users to deposit into. The vault owner can then trade with any funds that are deposited into their vault, and if successful, they will earn 10% of any profits.
Although the vault owner trades with the funds within the vault, at no point are they able to withdraw these funds from the vault. Vault depositors on the other hand can withdraw funds after a one-day lockup period.
The top trader on Hyperliquid goes by the pseudonym Crypto Vikings, and in the last month, Crypto Vikings has generated a 1,023% return. This same trader generated a 415% return in the last month on STFX, another copy trading platform.
Since launching the vault on January 21, Crypto Vikings has generated over $560,000 for vault depositors, netting himself around $56,000 from the 10% profit sharing. Crypto Vikings was also the largest depositor in their own vault, earning over $306,000 since the start.
Crypto Vikings didn’t immediately respond to a request for comment.
The vault now has five open long positions on Bitcoin, INJ, ORDI, SUI, and OP with an unrealized profit of about $70,000.
In total, more than 600 trades were executed by the vault, and only 66 of those were losing trades. The biggest loss so far was just $2,009, while the biggest win was $56,914.
Although the history of the vault has been astounding, past results are not indicative of what can happen in the future. If Crypto Vikings loses on trades, vault depositors lose alongside them.
One vault depositor, for example, deposited $47,532 into the vault 20 days ago. Since depositing, this user has lost $6,712, a 14% loss.
Due to an increase in funding fees, users are required to pay significant fees to open long positions. As such, the vault has paid over $225,000 to keep the five long positions previously mentioned opened.
The annualised funding rate for Bitcoin is 82%, meaning if a long position was held over the course of a year, it would pay 82% of the position’s value in fees.
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