🪐JLP HyperLoop Vault

Introduce

JLP HyperLoop is a next-generation delta-neutral yield strategy built on Jupiter’s new DeFi lending feature, JLP Loans , and the leading perps DEX Hyperliquid, with institutional-grade custody provided by Cobo.

The strategy is designed to improve capital efficiency and deliver sustainable returns under controlled risk conditions.

Strategy Overview

The vault accepts USDC deposits and uses those funds to acquire Jupiter’s JLP token, which earns trading fees and incentives from the Jupiter Perp. To amplify returns, the strategy uses JLP Loans to borrow additional USDC, enabling it to loop the capital back into JLP and increase exposure in a capital-efficient manner.

To neutralize the price volatility of assets underlying JLP—specifically SOL, ETH, and BTC—the vault opens short positions on Hyperliquid that match the composition of the JLP pool. This ensures that the strategy remains delta-neutral, focusing purely on generating yield from the JLP token and the funding fees earned from the short hedge positions.

Yield Generation

The JLP HyperLoop Vault generates returns mainly from two primary sources.

First, it earns yield from the JLP token itself, which accrues fees from trading activity on Jupiter Perp. The strategy amplifies this yield through leveraged exposure, achieved via borrowing USDC on JLP Loan and re-depositing it into JLP.

Second, the vault captures funding fees by maintaining short positions on Hyperliquid’s perpetual markets for SOL, ETH, and BTC. When funding is positive—which is often the case during risk-on or speculative market conditions—shorts earn funding payments from long traders. This adds a non-correlated source of return on top of the base JLP yield.

Combined, these two components form a robust and capital-efficient yield engine that delivers real income while remaining market-neutral.

Delta-Neutral Hedging

The strategy is designed to maintain delta-neutrality at all times. Since JLP’s value is derived from volatile assets like SOL, ETH, and BTC, price movements in those assets can impact the value of the position. To counteract this, the vault opens short positions on Hyperliquid, mirroring the allocation within the JLP pool.

The hedge ratios are continuously monitored and rebalanced by an automated keeper system. This allows the vault to maintain neutral exposure to price fluctuations while maximizing exposure to yield. Importantly, the vault uses limit orders for hedge execution wherever possible, helping to minimize slippage and trading costs over time.

Collateral Rebalancing Between Platforms

Because funds are deployed across two separate platforms—Jupiter for yield exposure and Hyperliquid for hedging—effective collateral management is crucial. The strategy implements an automated rebalancing system that shifts capital between platforms in response to market conditions.

When the market rises and JLP appreciates in value, the hedge positions on Hyperliquid become relatively undercollateralized. In these instances, the vault borrows more USDC via JLP Loan and transfers additional collateral to Hyperliquid to strengthen the margin buffer and avoid liquidation.

Conversely, when the market declines and hedge positions become profitable, excess collateral is released from Hyperliquid and returned to Jupiter, where it is used to repay the borrowed USDC. This system ensures optimal capital efficiency while maintaining the health of all active positions.

Security & Custody

Security is a top priority for the JLP HyperLoop Vault. All assets are custodied by Cobo, a leading institutional-grade digital asset custodian. Cobo handles private key management and operational controls, reducing human risk and protecting user funds with best-in-class infrastructure.

The strategy also interacts with Jupiter and Hyperliquid, two of the most mature and liquid platforms in the Solana ecosystem. In addition, Vectis has built and battle-tested its own automation layer to manage hedging, rebalancing, and execution logic. This infrastructure runs with high uptime and includes circuit breakers and fallback protections.

Comparison with JLP Navigator Vault

The earlier JLP Navigator strategy gained strong adoption, bringing Vectis to a peak TVL of $30M. It boosted JLP yields by 2–3x by leveraging JLP Value and hedging the asset pool to eliminate price exposure, all while maintaining delta neutrality on the Drift perp DEX.

However, funding rate volatility and elevated borrowing costs highlighted areas for improvement. JLP HyperLoop addresses these challenges by rebuilding the strategy’s core engine, leveraging lower-cost financing, deeper liquidity, and more efficient execution.

Fees and Redemption Terms

• Management Fee: 2% annually.

• Performance Fee: 25% of profits.

• Withdrawal Fee: 0.3%.

• Redemption Period: Fixed 3-day window for safe position unwinding and rebalancing.

Risks

As with all DeFi strategies, there are inherent risks associated with the JLP HyperLoop Vault.

Smart contract risk exists across all integrated protocols, including Jupiter and Hyperliquid’s own infrastructure. Although these systems are well-tested, unexpected bugs or exploits are always a possibility.

Execution risk may occur during extreme market volatility, where slippage or delayed order settlement could momentarily disrupt hedge precision. The vault mitigates this through limit orders, circuit breakers, and real-time monitoring.

Custodial risk, while minimized through Cobo’s infrastructure, remains a factor as it introduces third-party dependency. However, the use of a trusted custodian substantially reduces key management risk compared to self-custodied or unmanaged multisig vaults.

Users should evaluate these risks and determine whether they align with their yield and risk tolerance preferences.

Target Users

The JLP HyperLoop Vault is designed for:

• Users seeking non-directional, yield-focused exposure.

• Investors prioritizing risk management and custody security.

• Institutions and individuals looking for scalable, automated DeFi strategies.