{"id":401310,"date":"2025-08-08T17:33:46","date_gmt":"2025-08-08T12:03:46","guid":{"rendered":"https:\/\/dripp.zone\/news\/hyperliquid-vault-manager-under-fire-for-moving-29-million-of-user-funds-to-other-blockchains-crypto-news\/"},"modified":"2025-08-08T18:27:00","modified_gmt":"2025-08-08T12:57:00","slug":"hyperliquid-vault-manager-under-fire-for-moving-29-million-of-user-funds-to-other-blockchains-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/hyperliquid-vault-manager-under-fire-for-moving-29-million-of-user-funds-to-other-blockchains-crypto-news\/","title":{"rendered":"Hyperliquid Vault Manager Under Fire for Moving $29 Million of User Funds to Other Blockchains – Crypto News"},"content":{"rendered":"

<\/p>\n

The multisig-based Hyperliquid Vault (HLP) wrapper bridged user funds to Avalanche DeFi protocol Blackhole.\n<\/p>\n

\n

HLP0, which offers depositors a tokenized representation of Hyperliquid\u2019s HLP vault<\/a>, is facing backlash for withdrawing user funds from the multi-sig and bridging them to Avalanche and Arbitrum DeFi protocols instead of contributing them to the HLP vault.<\/p>\n

HLP0 boasts a total-value locked (TVL) of $40 million<\/a>, but $29 million of that capital has been bridged to Avalanche, and $11 million remains on Arbitrum. The funds are being used on two DeFi protocols, Aave, and Avalanche-based decentralized exchange (DEX), Blackhole, according to the multi-sig\u2019s DeBank profile<\/a>.<\/p>\n

HLP0 Multi-Sig DeBank<\/figcaption><\/figure>\n

Cain O\u2019Sullivan of Hyperdrive flagged the activity on X where he said<\/a>, \u201cthis would be great if it was still earning revenue from HLP but as of last week that liquidity has now been withdrawn and it’s farming on Avalanche.\u201d they said. \u201cIf you trust a mulitsig, they can simply do anything they want with your funds.\u201d<\/p>\n

As a follow up, O’Sullivan shared<\/a> that Hyperdrive will be developing a tokenized HLP itself as soon as native USDC <\/a>is enabled on the HyperEVM.<\/p>\n

HLP0 Team Responds<\/h2>\n

The HLP0 team addressed the claims<\/a> via Discord. The anonymous protocol lead known as \u201cGigaSafu\u201d said that HyperEVM\u2019s introduction of native USDC rendered HLP0\u2019s core mechanics as \u201cpointless\u201d and claims to be leveraging additional yield opportunities to beat HLP\u2019s APR percentage.<\/p>\n

GigaSafu says that by minting on Arbitrum as it does currently, allowed for \u201c1:1\u2019 zero-slippage deposits unlike most HyperEVM native wrappers\u201d, but native USDC makes minting directly to HyperEVM more sense from a financial perspecitve. <\/p>\n

\u201cNow, since USDC is native to HyperEVM, it makes more sense to mint from HyperEVM directly, and implement CoreWriter<\/a> to run a truly decentralized and permissionless\/ownerless HLP wrapper\u201d GigaSafu continued.<\/p>\n

The team\u2019s proposed solution is to integrate the current HLP0 token with Hyperliquid\u2019s CoreWriter and native USDC CCTP mints, which would theoretically make it decentralized and safe pending an audit. <\/p>\n

Native USDC<\/h2>\n

They also propose HLP0+ token, which is the same scenario as what they claim to be running now, where idle backing sits in the HLP0 multi-sig and implements \u201cstrategies on top to beat HLP APR% (arbitrage, AMO and bribing strategies)\u201d.<\/p>\n

USDC CCTP is natively integrated USDC on Hyperliquid\u2019s HyperEVM. Until now HyperEVM would move USDC from Arbitrum to the chain via a multi-sig vault. <\/p>\n

With CCTP v2 there will be frictionless USDC transfers between Hyperliquid and other CCTP v2 integrated blockchains, as opposed to the chain\u2019s current deposit and credit mechanism. Circle did not specify a release date for native USDC on Hyperliquid other than \u201ccoming soon\u201d.<\/p>\n

Dual Token<\/h2>\n

Following the HLP0 team\u2019s new dual token system, HLP0 would function as a true and verifiable HLP wrapper, while HLP0+ operates exactly as HLP0 does now, where the team pushes yield to it by running various DeFi strategies at their own discretion.<\/p>\n

GigaSafu, who is also on the team at Sonic-based DEX Shadow, concluded \u201cYou don’t have to do anything if you are fine with this. Just keep using HLP0. If somehow you didn’t like this and didn’t agree, just contact me directly, I will redeem your HLP instantly. We are of course not only fully backed but overbacked right now.\u201d<\/p>\n

HLP0\u2019s TVL has not moved today according to DeFiLlama, indicating that the team is yet to process any withdrawal requests.<\/p>\n

\"the-defiant\"
HLP0 TVL – DeFiLlama<\/figcaption><\/figure>\n

The actual HLP vault, which provides liquidity to Hyperliquid, touts a $435 million TVL<\/a>, with an average return of 11% APR over the last month.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The multisig-based Hyperliquid Vault (HLP) wrapper bridged user funds to Avalanche DeFi protocol Blackhole. HLP0, which offers depositors a tokenized representation of Hyperliquid\u2019s HLP vault, is facing backlash for withdrawing user funds from the multi-sig and bridging them to Avalanche and Arbitrum DeFi protocols instead of contributing them to the HLP vault. HLP0 boasts a […]<\/p>\n","protected":false},"author":2,"featured_media":401314,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[274,273,272,244,266,271,268,270,269,267],"class_list":["post-401310","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-de-fi","tag-crypto-finance","tag-decentralized-finance","tag-liquidity","tag-metamask","tag-pancake","tag-slippage","tag-sushiswap","tag-tronlink","tag-trust-wallet","tag-uniswap"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/401310","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=401310"}],"version-history":[{"count":1,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/401310\/revisions"}],"predecessor-version":[{"id":401315,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/401310\/revisions\/401315"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/401314"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=401310"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=401310"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=401310"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}