How a Hyperliquid vault works: one bus, one driver, shared fate
A vault is a shared pot run by one trader: same fills, same P&L, same liquidation — split by share. The mechanics, the 10% fee, the leader's mandatory 5%, and the fine print.
Everything in this series so far was preparation for this post. A vault is the instrument I'll be reviewing for the rest of the year, the thing this blog now exists to help you choose — and, someday, the thing I plan to run myself. So let's get it exactly right.
The bus
Picture a bus. One person drives; everyone else buys a seat. The passengers don't touch the wheel, don't pick the route, and can't brake. Whatever happens on the road happens to everyone on board, in exact proportion to the seats they bought.
That's a vault. Depositors pool money into a single trading account; one trader — the leader — trades it. There is no "your position" and "my position": there is one position, and you own a percentage of it. If the vault makes 10%, every depositor makes 10%. If the driver hits a wall, everyone hits the wall together — including, as the last post explained, the wall called liquidation.
The driver's incentives
Two rules align the driver with the passengers, and you should know both cold:
- The leader keeps 10% of your profits. That's the standard fee on Hyperliquid user vaults, taken from gains — not from deposits. No profit, no fee. (HLP, the protocol's own vault, charges nothing.)
- The leader must keep at least 5% of the vault as their own money. They're required to ride the bus they drive. It's a real rule with real teeth — but notice the floor is low. A leader holding exactly 5% has put up one dollar for every nineteen of yours. In the reviews, the difference between a leader at the 5% floor and one holding 40% of their own vault will be one of the first things I check.
Getting on and off
Boarding is one click: connect a wallet, deposit USDC. Leaving has friction you must know about before boarding: deposits are locked for a period after each deposit (currently measured in days, not months — I'll verify the exact terms in each review, because they can differ, and HLP's lock-up is longer than user vaults'). After the lock-up you can withdraw your share at the current value, taken from the vault's free collateral. One subtlety: if the vault's money is tied up in open positions, your exit may close positions or wait on them — another reason the reviews will always check how a vault handles withdrawals, not just how it handles profits.
What the vault page shows you
Each vault has a public page: the APR badge, the equity curve, the leader's share, depositor count, and every position it holds right now — live, unhidden. By DEX standards this is remarkable transparency. It is also, as the review series will show in painful detail, a collection of numbers practically designed to be misread. The 342% APRs are real numbers computed by honest code — and they will still mislead you if you don't know what window they annualize.
But before the traps, one comparison has to come first. Most readers of this blog came from copy trading, and a vault sounds like the same thing — "a pro trades, I follow." It is not the same thing. The differences, starting with who holds your money, are the subject of the next post.