30% APY? Unpacking Vectis JLP's Deep Dive into Hyperliquid Hedging: The Secret of One Fish, Multiple Eats

2025-08-22 13:50

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Vectis is launching the JLP HyperLoop Vault, offering low-cost borrowing and lending + hedging, with a conservative annualized return of 30%.

Source: Vectis Finance

Foreword

On August 20, HyperliquidFR announced that Hyperliquid achieved an annual revenue per employee of $1.024 billion, making it the company with the highest revenue per capita globally. The high profit behind this is derived from the high-frequency trading of trillions of users. The key to attracting these users lies not only in the platform's ultimate performance but also in its long-term maintenance of excellent funding rates.

As an amplifier of DeFi returns, Vectis Finance has seized this opportunity by launching the JLP HyperLoop Vault: by establishing a hedge position on Hyperliquid, it can not only lock in price risks but also stably capture high funding rates. By combining this with Jupiter's newly launched JLP Loans (with interest rates as low as 5%), it achieves low-cost borrowing and circular leverage to acquire more JLP.

This combination truly achieves a dual-driven approach of "low-cost leverage returns + high funding rate returns," allowing JLP returns to be significantly amplified in layers, making it a typical case of "getting multiple benefits from one action."

The Origin and Development of JLP

What is JLP? JLP is the core liquidity token of Jupiter (the largest liquidity and trading aggregation platform in the Solana ecosystem). As one of the most representative assets in the DeFi space this year, JLP has become the preferred entry point for large-scale on-chain earnings. With a fund capacity of up to $1.85 billion, achieving over 3x value growth within a year of launch, and currently offering an astonishing 29.71% annualized return, it fully demonstrates a unique charm of stability and sustainability.

JLP provides opening and borrowing support for traders through liquidity pools, acting as a market counterparty. Its revenue comes from three main pillars:

· High Proportion Fee Sharing: 75% shared revenue from opening/closing fees, price impact fees, borrowing fees, and transaction fees, forming a stable cash flow.

· Multi-asset Appreciation: An index fund consisting of SOL, ETH, WBTC, USDC, and USDT, with both volatility resistance and growth potential;

· Traders' Profit and Loss Capture: Benefiting from market fluctuations as a counterparty;

Compared to governance tokens dependent on market sentiment or purely speculative assets, the value of JLP is not based on empty promises but is steadily supported by real trading income and asset appreciation. Many arbitrageurs utilize circular borrowing to amplify returns on the JLP token.

However, in March-April 2025, JLP still experienced a maximum drawdown of up to 30%. This inevitably raised market concerns, mainly due to the weakening SOL market trend. If it can mitigate price volatility through an effective hedging mechanism, JLP is expected to truly become a high-quality, low-risk yield strategy.

Vectis's Innovative Strategy: Multiplier Effect, Amplifying JLP Returns

In November 2024, Vectis Finance launched the innovative JLP Navigator treasury strategy and deployed it on the Solana perpetual contract exchange, Drift. This strategy focuses on hedging price volatility risk while efficiently amplifying JLP's performance. Its core consists of two main pillars:

· Precise Volatility Hedging: Effectively hedge operations to avoid asset pool price drawdown risks and further increase returns in a positive funding rate environment;

· Low-Leverage Return Amplification: Utilize 2-3x low-leverage collateralized borrowing to increase JLP's position size, thus amplifying dividends and fee income.

With 2-3x JLP value amplification and 2-3x funding fee enhancement, the Navigator strategy has built a robust income moat. According to Vectis official data, the strategy has shown outstanding performance: a stable 30-day Annualized Percentage Rate (APR) of around 30%, with a Sharpe ratio as high as 5.86.

Vectis Finance is an independent DeFi protocol built on Solana, transforming market volatility into investment opportunities. The team first launched the innovative JLP yield amplification strategy treasury, raising TVL to $30 million at its peak. Building on this foundation, the protocol further expanded to funding rate arbitrage and AI-driven trading strategies, demonstrating a high degree of adaptability in different market environments. Hence, it is also known in the industry as a representative of "on-chain asset management."

HyperLoop Treasury: A Further Upgrade to JLP Return Amplification

In August 2025, Vectis Finance announced the launch of the JLP HyperLoop Treasury Strategy. This strategy iteratively upgrades on the JLP Navigator and switches the original hedging trading platform from Drift to Hyperliquid. It provides users with a more efficient return amplification solution. The specific strategy includes:

1. Low-Cost Leveraged Yield

Users deposit USDC into the Vectis Vault, where the funds are first used to purchase JLP on Jupiter. Subsequently, the Vault utilizes JLP Loans to borrow more USDC, which is then reinvested in JLP, creating a leverage loop. This approach establishes a low leveraged position on an LP token that generates yield, effectively amplifying the earnings from trading fees and Jupiter ecosystem incentives.

JLP Loans, a recent lending product introduced by Jupiter, allows JLP holders to lend out USDC at rates as low as 5%, costing less than half compared to other platforms.

The Jupiter JLP Loans website shows that the current borrowing rate is only about 5.31%, less than half of the rate Drift, the platform underlying the original JLP Navigator strategy, offered during the period from March 12 to July 25, with an average rate of about 10.39%.

2. High Funding Rate Yield

To hedge against price fluctuations, the Vault's strategy maintains Delta neutrality: Vectis synchronously opens short positions for SOL, ETH, and BTC on Hyperliquid to match the underlying asset composition of JLP. These positions are continuously monitored and dynamically adjusted by an automated trading system.

When the funding rate on Hyperliquid is positive, these short positions can generate additional yield, further enhancing the overall performance of the Vault. Compared to the hedging performance on Drift before the migration to Hyperliquid, the funding rate has resulted in an annualized return increase of up to +158.63%.

Furthermore, hedging execution on Hyperliquid prioritizes the use of limit orders when conditions allow. This approach minimizes slippage and reduces rebalancing costs, especially during highly volatile market conditions.

3. Security and Infrastructure

User funds in the JLP HyperLoop Vault are custody by Cobo. Cobo is a leading institutional-grade custody provider that offers a secure operational environment for all asset transfers and wallet interactions. Unlike many DeFi Vaults relying on multisig wallets or internal custody systems, the HyperLoop mitigates key management risks by integrating Cobo and safeguards funds through industry-leading security practices.

At the execution level, all smart contract interactions are carried out through validated and mature platforms such as Jupiter and Hyperliquid. Simultaneously, Vectis' proprietary automated infrastructure is responsible for rebalancing, hedge management, and position monitoring, thereby reducing the potential risks of human error and significantly improving execution speed.

Furthermore, during the launch of the new Strategy Treasury, Vectis also introduced a Boost Station event, incentivizing users to earn JLP rewards through treasury management while also receiving additional USDC rewards.

Conclusion

Vectis has seized the JLP express train, leveraging a dual-engine combination of low-cost leverage and high funding rates to rapidly amplify profits, achieving acceleration beyond the market. These are just the tip of the iceberg in successful cases.

In the world of DeFi, Vectis understands the philosophy of DeFi trading: built on real profit, guided by security, driven by high-frequency iteration, converting complex strategies into a simple and stable growth path.

In the future, as the next-generation leader in on-chain asset management, Vectis will continue to explore the most promising Alpha opportunities, enabling large capital to enjoy a robust, sustainable, and explosively growing DeFi growth trajectory.