Selecting the right validator can be challenging. Once the provider enters our Staking Rewards Verified Staking Provider (VSP) Program, you will be able to support your decision-making process. Through this program, we thoroughly evaluate factors such as security measures, on-chain reliability, provider setup, and value-added services for the whole ecosystem.

In addition, you can consider other metrics when selecting a provider to delegate to:

Commission: The commission rate represents the portion of your rewards that validators retain. A higher commission rate decreases your earnings, while a lower rate may affect the provider’s profitability and sustainability.

Network Share: Delegating to popular validators can raise centralization risks, while smaller providers may struggle with profitability. Supporting smaller providers helps decentralize the network but requires monitoring to ensure they stay active.

Performance: View the validator information on the Provider tab to ensure you pick a pool with the highest possible uptime performance. Our recommendation is to only select reputable validators with a high performance and a long history of not being slashed.

HYPE staking rewards are generated from network activity and funded by a dedicated emissions reserve. The system is designed to reward validators and delegators fairly while ensuring long-term sustainability.

Block production: Active validators earn rewards for producing blocks and maintaining the Hyperliquid network.

Delegated Stake Share: Rewards are distributed proportionally based on the total HYPE staked to each validator.

Future Emissions Reserve: All staking rewards are drawn from this reserve, set aside specifically to incentivize long-term participation.

Dynamic Reward Formula: Inspired by Ethereum, the reward rate decreases as more HYPE is staked—it's inversely proportional to the square root of the total staked supply.

Auto-compounding: Rewards are automatically re-staked to your chosen validator, growing your stake over time.

Smart Contract Risk: The Hyperliquid DEX depends on smart contracts, particularly those tied to the Arbitrum bridge. Any bugs or security vulnerabilities in these contracts could lead to loss of user funds.

L1 Risk: Hyperliquid operates on its own custom Layer 1 blockchain, which hasn’t been tested as thoroughly as more established chains like Ethereum. This exposes it to potential downtime or consensus issues.

Market Liquidity Risk: As a newer protocol, Hyperliquid may face low market liquidity, especially early on. This can cause price slippage during trades, which might lead to poor execution and financial losses.

Oracle Manipulation Risk: Hyperliquid uses validator-maintained price oracles. If these oracles are manipulated, it could distort the mark price and trigger unfair liquidations before prices return to normal.

Risk Mitigation: To counteract oracle-related risks, the protocol enforces open interest caps based on liquidity, basis, and leverage. Once caps are reached, no new positions can be opened, and orders must stay within 1% of the oracle price—though HLP is exempt to ensure liquidity quoting continues.

The HYPE token is the native token of the Hyperliquid Layer 1 blockchain. It plays a central role in securing the network, powering its decentralized applications, and aligning incentives across participants.

Staking & Network Security: Users can stake HYPE to validators, helping secure the network through delegated proof of stake (DPoS). In return, stakers earn rewards from the future emissions reserve.

Validator Participation: Validators must self-delegate 10,000 HYPE to become active. They produce blocks and maintain the chain’s performance.

Economic Alignment: As the ecosystem grows, HYPE serves as a core asset to incentivize long-term alignment between users, builders, and validators.

Hyperliquid is a performant L1 optimized from the ground up. The vision is a fully onchain open financial system with user-built applications interfacing with performant native components, all without compromising end-user experience.