Hyperliquid, 638% Return Explodes in One Month...Thought It Was Money Duplication, But Was It a Liquidation Minefield?

▲ Hyperliquid (HYPE), cryptocurrency whale/AI-generated image

A Hyperliquid strategy that recorded an annualized return of 638% simultaneously exposed the high-profit structure of the on-chain derivatives market and the true nature of high-risk leveraged trading.

According to cryptocurrency media outlet Cryptopotato on May 29 (local time), one of the Hyperliquid-based vaults attracted market attention by recording an annualized return of 638% over the past month. This vault manages approximately $3.03 million in total value locked, and its strategy is described as "Long Hyperliquid and Bitcoin, Short Low-Quality Coins."

A Hyperliquid vault is a structure where users can deposit funds and follow a specific trading strategy. The vault leader executes the operational strategy, and depositors share profits and losses according to performance. The key is that it's not simply lending or rebalancing assets like a typical deposit product, but rather utilizing leverage, liquidation, perpetual futures, and high-speed order execution within the Hyperliquid trading infrastructure.

This strategy is designed to allocate 70% of the long position to Hyperliquid (HYPE) and 30% to Bitcoin (BTC). Simultaneously, it maintains short positions on a bundle of at least 10 coins with high fully diluted valuation and high circulating supply, with short positions accounting for approximately 60% of the nominal exposure.

Cryptopotato reported that, based on the position table, the only underperforming trade was the Bitcoin long position, and these losses were offset by funding gains. The vault's overall profit and loss chart showed a sharp upward trend over the past 30 days, with profits approaching $1.2 million.

However, this performance is difficult to interpret as a low-risk income product. Cryptopotato pointed out that this vault is an aggressive leveraged long-short cryptocurrency trade heavily reliant on Hyperliquid price movements. Behind the high annualized returns lies a structure combining concentrated positions, leverage, and directional betting.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*