Yield Sources
Compost generates yield from three sources.
1. Validator Staking
A portion of the vault is staked with Hyperliquid validators.
| Metric | Value |
|---|---|
| Base yield | ~2.5% APY |
| Unstake queue | 7 days |
| Purpose | Liquidity buffer for redemptions |
This provides consistent base yield while maintaining liquidity for withdrawals.
2. HIP-3 Builder Fees
The majority of the vault is allocated to HIP-3 markets.
Fee Share by Method
| Method | Fee Share | Notes |
|---|---|---|
| Direct deployment | 50% | Protocol-enforced, requires 500K HYPE stake |
| Partner allocation | 20-40% | Negotiated with deployers (Felix, Ventuals, etc.) |
| Pooled staking | Variable | Via Kinetiq Launch or similar, pro-rata share |
Allocation Strategy
Compost targets the highest risk-adjusted yield across methods:
- Direct deployment — Higher yield, higher capital requirement
- Partner allocations — Lower yield, better diversification
The mix optimises for yield while managing concentration risk.
3. Token Incentives
Some deployers distribute token incentives to stakers:
- FELIX
- KNTQ
- Others TBC
Handling
These tokens are:
- Held in treasury
- Sold periodically
- Used to fund operations
INFO
Token incentives do not affect cHYPE yield directly — they're a separate revenue stream for the protocol.
Yield Comparison
| Source | Yield | Consistency | Risk |
|---|---|---|---|
| Validator staking | ~2.5% | High | Low |
| HIP-3 fees | Variable (10-50%+) | Medium | Medium |
| Token incentives | Variable | Low | Low |
INFO
Next: Yield Flow