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StakedHYPE

3.0
stHYPE / HyperEVM (Hyperliquid L1 ecosystem) / February 18, 2026
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Score Breakdown

CategoryWeightScore
Audits & Historical20%2.50
Centralization & Control30%3.67
Funds Management30%2.25
Liquidity Risk15%4.00
Operational Risk5%3.00
Final Score3.0 / 5.0
20%30%30%15%
Medium Risk

Overview

StakedHYPE issues stHYPE, a liquid staking token representing HYPE staked into Hyperliquid validators through Hyperliquid Stake Marketplace (HSM). Conceptually it is similar to stETH: users deposit native HYPE, receive an LST (stHYPE), and accumulate staking rewards in token exchange rate terms.

StakedHYPE was originally built by Thunderhead Labs, a multi-LST provider (stFLIP, stELX, stMOVE, tPOKT, stHYPE) with shared modular infrastructure across products. In August 2025, stHYPE was acquired by Valantis Labs, which now maintains the protocol. The codebase benefits from components battle-tested across multiple Thunderhead LST deployments.

The architecture has two layers:

  1. LST layer (StakedHYPE)
  • User-facing mint/redeem flow for stHYPE.
  • Maintains a withdrawal queue and reserve buffer.
  1. Validator staking layer (HSM)
  • HYPE is delegated into Hyperliquid validators via HSM infra.
  • Uses HSM voting and delegation controls to distribute stake and manage exits.

Links:

Risk Summary

Key Strengths

  1. Clear product-market fit: native HYPE liquid staking primitive.
  2. Public audit trail with multiple firms and multiple rounds.
  3. Detailed technical docs for HSM and unstaking mechanics.
  4. Onchain staking economics rather than offchain custodial backing.

Key Risks

  1. Queue-based exits and stress-path wind-down mechanics introduce liquidity delay risk.
  2. Meaningful governance/parameter control centralization in current phase.
  3. Strong dependency on Hyperliquid validator and chain-level risk.
  4. Slashing regime may change via governance (currently no automatic validator slashing in base staking).
  5. No public bug bounty program identified.

Critical Risks

  • No immediate critical gate failure found from available public docs.
  • Highest tail risk is correlated Hyperliquid chain/validator stress causing both backing and liquidity pressure simultaneously.
Full Report

Contract Addresses

All contracts are deployed on HyperEVM (Hyperliquid L1). Explorer: HyperEVMScan.

Contract Address Type
stHYPE 0xfFaa4a3D97fE9107Cef8a3F48c069F577Ff76cC1 Proxy (ERC-20 LST)
stHYPE Impl 0xa2fdc8eca86e3cf2593ec20f42a777984927553c Implementation
stHYPE ProxyAdmin 0xe7b0f26e8e20e109441f0ad1c885fffbb27125dc EIP-1967 Admin
OverseerV1 0xB96f07367e69e86d6e9C3F29215885104813eeAE Proxy (mint/burn controller)
OverseerV1 Impl 0xc9dcf086ee9f063bcd4c7d2ec4b82085142a8cee Implementation
OverseerV1 ProxyAdmin 0x943a7e81373423f7bb0fb6a3e55553638264fd6b EIP-1967 Admin
wstHYPE 0x94e8396e0869c9F2200760aF0621aFd240E1CF38 Proxy (wrapped shares)
wstHYPE Impl 0x2936b42d1bfa7298faa44644ddea665c7aa51ef8 Implementation
wstHYPE ProxyAdmin 0xa29a2043b2fcbc9189beb9e6efcb2ba48bb3d586 EIP-1967 Admin
Governance Multisig 0x97dee0ea4ca10560f260a0f6f45bdc128a1d51f9 Gnosis Safe (3-of-5)

All contracts are upgradeable via EIP-1967 transparent proxy pattern. Each proxy has a separate ProxyAdmin contract. All three ProxyAdmin contracts are owned by the governance multisig (0x97dee0ea..., verified via owner() on each ProxyAdmin). This means the 3-of-5 multisig can upgrade all contract implementations without timelock.

Source: docs.stakedhype.fi/technical/contract-addresses + onchain verification via eth_getStorageAt (EIP-1967 slots).

How Hyperliquid Staking Works (Context)

Hyperliquid’s staking model is validator-based and epoch-driven.

  • Users stake HYPE and delegate to validators.
  • Rewards accrue through validator performance and protocol emissions/fees.
  • Validator set and stake movement are constrained by protocol rules (epoch timing and activation/deactivation semantics).
  • Hyperliquid docs describe validator/L1 operational risks; this is the core external risk inherited by any HYPE liquid staking protocol.

Slashing in Hyperliquid (Important for stHYPE)

As of February 18, 2026, Hyperliquid docs state that core HYPE staking currently has:

  • No automatic validator slashing mechanism in live staking.
  • Jailing as the immediate validator penalty path for uptime/behavior issues.
  • A note that governance may introduce explicit validator slashing in the future.

Practical interpretation for stHYPE:

  • Today: direct stake haircut from automatic validator slashing is low-probability because that mechanism is not yet active in base staking.
  • Still material risk: validator jailing, poor validator performance, or chain-level instability can still reduce effective yield and delay exits.
  • Future risk step-up: if governance enables validator slashing later, stHYPE loss profile can change meaningfully and requires immediate reassessment.

Historical status:

  • No official Hyperliquid documentation found describing a past validator slashing event in HYPE staking as of February 18, 2026.
  • This is an inference from official docs and release/risk pages; absence of a documented event is not proof of impossibility.

For stHYPE specifically, staking operations route through HSM abstractions and StakedHYPE’s queue/buffer logic, which adds additional smart-contract and operational layers on top of base protocol staking.

Audits and Due Diligence Disclosures

StakedHYPE publicly lists 4 audits on its audits page:

# Date Firm Scope Link
1 Feb 2025 Three Sigma StakedHYPE contracts Report
2 Oct 2025 Pashov Audit Group StakedHYPE contracts Report
3 Nov 2025 Pashov Audit Group StakedHYPE updates Report
4 Nov 2025 Guardian Audits StakedHYPE updates Report

StakedHYPE was originally built by Thunderhead Labs (multi-LST provider: stFLIP, stELX, stMOVE, tPOKT) and acquired by Valantis Labs in August 2025. Cross-LST audits with shared modular components are available in the Thunderhead audits repo. The Three Sigma audit is mirrored in both repos (identical SHA: 4c39b756).

The governance system is based on a modified FraxGovernorOmega (audited by Trail of Bits), but is not yet implemented per the audits page.

Additional disclosures:

  • HSM docs state code and technical docs are expected to be published in GitHub once finalized, indicating parts of stack/process may still be maturing.
  • No public formal verification disclosure was identified.

Bug Bounty

No Immunefi/Sherlock/Cantina bug bounty link was identified in docs.

Disclosed security contacts:

Assessment note:

  • Responsible disclosure channel exists, but absence of a public bounty with payout tiers weakens external adversarial testing incentives relative to peers.

Historical Track Record

  • StakedHYPE documentation indicates active production operation with stHYPE issuance and unstaking mechanisms live.
  • Listed on DeFiLlama since July 2025 (~8 months at assessment date).
  • Current TVL: ~$124M (February 18, 2026, per DeFiLlama).
  • Peak TVL: ~$544M (July 2025).
  • TVL trend: Significant decline from peak, currently at ~23% of ATH. Likely driven by broader market conditions and HYPE price movements rather than protocol-specific issues.
  • No major publicly disclosed exploit was identified in StakedHYPE docs at assessment time. Not listed on Rekt News or DeFiLlama Hacks.
  • Track record is materially shorter and less battle-tested than older LSTs like stETH (~8 months vs 3+ years).

Funds Management

Strategy and delegation model

stHYPE deposits are managed via HSM-integrated staking operations:

  • User deposits -> mint stHYPE.
  • Capital is distributed across validator/delegation pathways using HSM.
  • A reserve buffer is kept to improve withdrawal responsiveness.
  • Redemptions rely on reserve and, when needed, unstake/rebalance processes.

Accessibility

  • stHYPE minting is permissionless at user level through protocol interface.
  • Unstaking uses a queue-based process and does not guarantee instant 1:1 native withdrawal.
  • Queue and buffer mechanics are key liquidity controls and must be actively monitored.

Collateralization

Onchain state (verified February 18, 2026):

  • stHYPE totalSupply: 4,252,373.17 stHYPE
  • Total HYPE backing (totalSupply × exchangeRate): 4,338,882.91 HYPE
  • OverseerV1 liquid reserve: 261,728.59 HYPE (6.0% of total backing held as liquid HYPE)
  • Exchange rate (balancePerShare): 1.0203 (2.03% accumulated yield since launch)
  • maxRedeemable: 0 HYPE — no instant redemption buffer available at time of check, all burns go through 7-day unstaking queue
  • burnCount: 39,113 total burns processed

Economic backing is staked HYPE plus liquid reserves. The remaining ~94.0% of HYPE is staked across validators via HyperCore Staking Modules.

  • Backing quality is primarily dependent on Hyperliquid validator set quality and slashing/operational outcomes.
  • This is not offchain custodial collateral; risk is onchain protocol + validator behavior.

Provability

  • Core staking and token accounting are onchain by design.
  • Key onchain readable functions verified: totalSupply(), balancePerShare(), totalShares(), maxRedeemable(), burnCount(), getBurns(address), redeemable(uint256).
  • Exchange rate (balancePerShare) is programmatically updated onchain — not reliant on admin oracle updates.
  • Contracts use OpenZeppelin AccessControl with MINTER_ROLE, BURNER_ROLE, PAUSER_ROLE, DEFAULT_ADMIN_ROLE. OverseerV1 holds MINTER_ROLE and BURNER_ROLE on stHYPE. The 3-of-5 multisig holds DEFAULT_ADMIN_ROLE.
  • Transparency gaps remain in several areas:
    • Validator delegation breakdown: No public dashboard or onchain mechanism shows per-validator stake distribution. The operators page lists operator names (ASXN, B-harvest, HypurrCO, etc.) but publishes no addresses, delegation amounts, or performance metrics.
    • Queue monitoring: The only user-facing tool is an estimated withdrawal time at app.valantis.xyz/staking (stake accounts docs). No real-time queue depth, position, or reserve utilization data is published.
    • HSM not yet deployed: The HSM specification uses future tense throughout ("HSM will be natively integrated", "stHYPE will use a governance process"), indicating the Hyperliquid Stake Marketplace is still a design document, not a live system.
    • Offchain operational components: Reserve management relies on "active liquidity management from the Protocol Delegator" and "coordination with custodians / HIP-3 operators" (stake accounts docs) — offchain processes with no onchain enforcement or public monitoring.
    • 1:1 backing unverifiable end-to-end: The transparency page claims "stHYPE is always backed 1:1 by native HYPE", but no independent verification tool is provided. Users can verify EVM-side state (totalSupply, balancePerShare) but cannot independently audit the full HyperCore validator delegation breakdown.

Liquidity Risk

stHYPE exit risk is higher than a pure wrapper token:

  • There is an unstaking queue design (not instant native redemption in all conditions).
  • Docs disclose a reserve buffer with a maxRedeemable() function for instant redemptions, a Managed Liquidity Buffer (1M HYPE early-exit threshold, 300k HYPE buffer), and up to a 90-day wind-down horizon for specialized stake accounts in extreme stress conditions.

DEX Liquidity (per DeFiLlama, February 18, 2026)

Total DEX liquidity: ~$380K — extremely thin relative to $124M TVL (0.3% of TVL in DEX pools).

stHYPE pools:

DEX Pair TVL Fee Vol 7D
HyperSwap V3 WHYPE-STHYPE $186,012 0.01% $33,002
HyperSwap V3 WHYPE-LSTHYPE $54,172 0.3% $57,978

wstHYPE pools:

DEX Pair TVL Fee Vol 7D
Project X WSTHYPE-KHYPE $97,690 0.3% $0
Project X WHYPE-WSTHYPE $39,857 0.01% $7,749

No stHYPE or wstHYPE pools found on Curve, Laminar, or KittenSwap despite these DEXes being deployed on HyperEVM. No wstHYPE/USDC or wstHYPE/USDT pairs exist anywhere on HyperEVM — there is no direct stablecoin exit path via DEX for either token.

wstHYPE as Lending Collateral

Lending protocols accept wstHYPE (wrapped stHYPE), not native stHYPE, as collateral for borrowing. This is the primary use case for staked HYPE derivatives and the key risk vector, since liquidation of undercollateralized positions depends on available onchain liquidity.

Morpho V1 — isolated lending markets, $44.0M wstHYPE collateral across 10 active markets:

Loan Token LLTV wstHYPE Collateral Borrowed Utilization
USDC 77.0% $35.2M $8.3M 100%
WHYPE 86.0% $5.95M $4.07M 90.4%
USDH 77.0% $1.47M $493K 91.3%
WHYPE 86.0% $744K $499K 69.9%
USDT0 62.5% $206K $74K 90.4%
USDT0 77.0% $185K $120K 88.0%
USDHL 62.5% $127K $45K 11.4%
Others — $71K $47K —

HyperLend — pooled lending (Aave-fork), $30.1M wstHYPE in pool. In pooled model, wstHYPE depositors can borrow any supported asset (WHYPE, USDC, USDT0, etc.). No native stHYPE market exists.

Felix CDP — $1.9M wstHYPE collateral used to mint feUSD (synthetic dollar).

Protocol Type wstHYPE Collateral Borrowable Assets LLTV Range
Morpho Isolated markets $44.0M USDC, WHYPE, USDH, USDT0, USDe 62.5%–91.5%
HyperLend Pooled lending $30.1M Any pool asset TBD
Felix CDP $1.9M feUSD TBD
Total $76.0M

~60% of stHYPE total supply ($127M) is wrapped and used as lending collateral.

Liquidation Risk

Onchain liquidation of wstHYPE collateral positions is effectively broken. $76M of wstHYPE is used as borrowing collateral, but total wstHYPE DEX liquidity is only ~$138K with zero stablecoin pairs. When a borrower's position becomes undercollateralized, liquidators must acquire and sell wstHYPE — but there is no viable onchain path to do so efficiently:

  1. No stablecoin exit: No wstHYPE/USDC or wstHYPE/USDT pools exist. Liquidators must route through HYPE derivatives (wstHYPE → WHYPE → USDC), adding hops and slippage. The largest Morpho market ($35.2M) is borrowing USDC against wstHYPE — liquidators need a wstHYPE-to-USDC path that doesn't exist onchain.
  2. Negligible DEX depth: $138K total wstHYPE liquidity cannot absorb liquidations from $76M in collateral. Even a small liquidation event would exhaust available pool depth.
  3. Unwrap delay: Converting wstHYPE → stHYPE is instant at the contract level, but stHYPE → HYPE requires the 7-day unstaking queue (up to 90 days under stress). Liquidators cannot quickly realize value.
  4. Correlated stress: In a HYPE price drawdown, both the collateral value (wstHYPE) and exit liquidity (WHYPE pools) decline simultaneously, creating a liquidation spiral risk where falling prices trigger liquidations that cannot be efficiently executed.
  5. High utilization: Most Morpho wstHYPE markets show 88–100% utilization, meaning positions are heavily leveraged relative to available supply.

This creates a structural fragility: $76M of wstHYPE borrowing collateral against ~$138K of DEX exit liquidity — a 550:1 collateral-to-liquidity ratio.

Practical Implications

  • In normal conditions, protocol reserves/queue support predictable withdrawals (7-day unstaking).
  • Secondary market exit is severely constrained: the largest DEX pool is ~$186K with near-zero daily volume. Any meaningful position would need to rely on the protocol's native unstaking queue.
  • In stress conditions, exits can be delayed up to 90 days (specialized stake account wind-down) and/or become market-impact sensitive.
  • Lending market liquidations are the primary systemic risk vector due to the collateral-to-liquidity mismatch described above.

Centralization & Control Risks

Governance

StakedHYPE docs describe a planned dual-governance model based on a modified FraxGovernorOmega:

  • Legislative branch: Multisig composed of Thunderhead team, Valantis team, ecosystem partners, and community members. Proposals are optimistic (succeed by default unless vetoed).
  • Executive branch: stHYPE token holder veto power over governance proposals.

Current status: NOT YET IMPLEMENTED. The security page states: "This system will go live post Hyperliquid pre-compiles." The audits page labels this as "Governance (not implemented)."

The current operational model is a team-controlled multisig without the documented veto mechanism.

Onchain verified governance data:

  • Multisig address: 0x97dee0ea4ca10560f260a0f6f45bdc128a1d51f9 (Gnosis Safe on HyperEVM)
  • Threshold: 3-of-5 (verified via getThreshold())
  • Nonce: 20 transactions executed
  • Timelock: No timelock mechanism documented or found onchain.
  • Signer identities: Not individually disclosed. Described only as "Thunderhead team, Valantis Team, ecosystem partners."

Risk implications:

  • Governance is operationally centralized in current phase with no public timelock or threshold disclosure.
  • The planned dual-governance with stHYPE holder veto would be a meaningful improvement, but is not yet live.
  • Governance and parameter controls need explicit monitor coverage for role changes and critical parameter updates.

Programmability

  • Hybrid system: smart-contract based staking + operational policy layer for delegation, reserves, and queue management.
  • More complex than simple wrappers (WHYPE/WETH).
  • Potential sensitivity to offchain operator execution quality and policy correctness.

External Dependencies

Critical dependencies include:

  1. Hyperliquid L1 consensus/liveness.
  2. Hyperliquid validator performance and staking/slashing rules.
  3. HSM mechanism assumptions and stake-market behavior.
  4. DEX liquidity conditions for stHYPE/HYPE exits.

Dependency concentration on Hyperliquid ecosystem is structurally high.

Operational Risk

  • Docs quality is good and technically detailed.
  • Security page and audit disclosures are positive. One co-founder found a $6M white-hat vulnerability in Curve, demonstrating security expertise.
  • Public bounty program absent. Not listed on Immunefi, Sherlock, Code4rena, or Cantina.
  • Team operates as "known anons" via Valantis Labs. Key GitHub contributors identified: Ankit Parashar (0xparashar), Ed (happenwah). Twitter: @ValantisLabs.
  • Thunderhead Labs (original builder) has operational track record across multiple LST deployments (stFLIP, stELX, stMOVE, tPOKT). The Valantis acquisition adds the AMM/DEX expertise of the Valantis team.
  • Team/governance transparency is improving but appears earlier-stage than mature LST incumbents.

Monitoring

Key contracts to monitor:

1. Governance Monitoring (MANDATORY)

Monitor all privileged role actions and parameter changes for:

  • RoleGranted / RoleRevoked events on stHYPE and OverseerV1 (AccessControl)
  • queue limits and withdrawal controls
  • reserve/buffer parameters
  • delegation strategy controls
  • Upgraded events on proxy contracts (implementation changes)

Alert immediately on:

  • ownership/multisig signer changes (AddedOwner/RemovedOwner on Safe)
  • threshold changes (ChangedThreshold on Safe)
  • implementation upgrades (Upgraded event on proxy)
  • emergency pause activations

2. Backing & Solvency Monitoring (MANDATORY)

Track:

  • total stHYPE supply
  • estimated total managed HYPE (staked + liquid reserve)
  • backing ratio trend
  • validator concentration and large delegation shifts

Alert thresholds:

  • backing ratio deterioration >1% in 24h (without expected event)
  • single validator concentration >25%

3. Queue & Exit Monitoring (MANDATORY)

Track:

  • queue size and age distribution
  • realized withdrawal times
  • reserve utilization rate

Alert thresholds:

  • median queue delay > target SLA for 24h+
  • reserve buffer utilization >80% sustained
  • abrupt increase in queued exits (>20% day-over-day)

4. Market Liquidity Monitoring

Track:

  • stHYPE/HYPE and stHYPE/stable pool depth
  • slippage for representative sizes
  • depeg vs implied fair value

Alert thresholds:

  • 2% sustained discount vs implied NAV proxy

  • pool depth drop >40% day-over-day

5. Hyperliquid Base Risk Monitoring

Track official Hyperliquid staking/validator announcements for:

  • validator jailing incidents
  • any governance activation of validator slashing
  • validator instability
  • staking parameter changes
  • chain liveness incidents

Overall Risk Score: 3.0 / 5.0

Risk Tier: MEDIUM RISK

Rationale:

  • stHYPE is materially more complex/risk-bearing than WHYPE due to delegated staking, queue exits, and governance parameter controls.
  • Audit coverage is decent (4 audits from reputable firms), but no bug bounty.
  • Governance is centralized: 3-of-5 multisig with no timelock, planned dual-governance not yet implemented.
  • DEX liquidity is extremely thin ($380K vs $124M TVL); primary exit is via protocol unstaking queue (7+ days). ~$77M wstHYPE lending collateral with no stablecoin DEX pairs creates structural liquidation risk.
  • Strong single-ecosystem dependency on Hyperliquid L1.
  • Partially offset by: onchain verifiable backing, programmatic exchange rate, Thunderhead's multi-LST track record, no incidents to date.

Reassessment Triggers

  1. Any governance architecture upgrade (SAFE/timelock/token governance rollout).
  2. Material changes to unstake queue logic, reserve policy, or maxRedeemable() buffer parameters.
  3. Any Hyperliquid validator jailing wave or governance rollout of validator slashing.
  4. Any stHYPE discount >3% sustained for >24h.
  5. Any incident disclosure by StakedHYPE or Hyperliquid affecting staking settlement.
  6. Release of new audits or public bug bounty program.

Sources

Appendix: HyperEVM Liquid Staking Market Share

Source: ASXN HyperScreener — February 18, 2026

Token Supply Supply USD Market Share
kHYPE 21.79M $661.46M 77.67%
stHYPE 4.19M $127.20M 14.94%
vHYPE 1.04M $31.72M 3.72%
iHYPE 499.68K $15.17M 1.78%
beHYPE 484.88K $14.72M 1.73%
mHYPE 37.06K $1.13M 0.13%
HYPED 6.52K $197.91K 0.02%
sHYPE 2.03K $61.67K 0.01%

Total LST market: ~$851M. stHYPE is the second-largest LST on HyperEVM at 14.94% market share, behind kHYPE (77.67%). Notably, ~61% of stHYPE supply ($77.9M) is deposited in lending protocols as wstHYPE collateral, indicating high utilization concentration in a single use case.

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