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HLP Leverage - RUM

HLP leverage has features of:

  1. 1.
    Multiplied rewards from HLP in terms of USDC.e real yield
  2. 2.
    Dynamic reward split mechanism that RUM holders pay the leverage cost only when they gain

HLP Leverage Approach

HLP itself can be minted with either GLP or USDC.e token, and the deposit fee will be based on the pool composition of tokens at the time of deposit. Currently, Vaultka only supports USDC.e deposits, so the deposit fee will varies. The target weight of USDC.e ratio in the pool is 10% (Check HMX Documents here), deposits that moves the USDC.e weight away from the target ratio will increase the deposit fees.
Based on the pool balance, HLP's price will be affected with GLP price, thus it is not totally delta-neutral, due to the basket-of-asset nature of GLP. The trader's activity fees will be reflected in the harvestable USDC.e rewards. Leverage HLP users can claim their USDC.e rewards in Vaultka page.

Workflow

Step 1: Users input the deposit amount and choose the desired leverage level (up to 10x).
Step 2: The additional capital required for the leverage strategy is borrowed from the USDC.e lending pool.
Step 3: The borrowed USDC.e is combined with the deposited USDC.e in the HLP Leverage strategy to mint the corresponding HLP tokens on HMX.
Step 4: The "Debt-to-Value (DTV) Monitor" and "Liquidation Monitor" continuously monitor the health of the strategy.
Step 5: When the leveraged positions are closed, the rewards are split to the Redistributor, which is a protocol-owned middleman contract that facilitates the distribution of rewards to USDC.e Lending Pool. See here for more details.

Features

Harvestable Reward
  • For Leverage users, HLP USDC.e rewards are harvested by the protocol whenever a user opens/closes a position, or every 4 hours. Rewards can be claimed from the Vaultka page
  • The user’s harvestable reward will already be deducted from the reward split for lenders
Flexible Leverage
Users can employ flexible leverage (up to 5x) based on the amount they deposit in the Vodka vault. The “Manager” will check the availability of the lending vault and match the leverage amount to mint HLP.