The Hyperliquid Decentralized Autonomous Organization (DAO) is exploring novel strategies to enhance its treasury revenue, focusing specifically on monetizing its substantial holdings of the native HYPE token. A recent proposal suggests deploying HYPE assets as collateral for writing options, a move designed to generate consistent yield without requiring outright liquidation of the tokens.
The core mechanism involves utilizing the HYPE tokens to back options contracts, primarily selling covered calls or cash-secured puts. By selling volatility premium, the treasury can accrue fees directly into its reserves. This strategy hinges on the assumption of moderate price volatility for HYPE, allowing the treasury to capture premium while minimizing the risk of exercise (in the case of covered calls, risking the HYPE tokens being called away).
This initiative is driven by the desire to diversify treasury income beyond standard trading fees and protocol revenue. Currently, large token reserves often sit idle, serving only as governance weight or potential future grant funding. By actively managing these assets through structured products like options, the Hyperliquid treasury aims to create a reliable, recurring revenue stream, thereby strengthening its financial sustainability.
Successful implementation requires stringent risk management protocols, including limits on the total percentage of HYPE deployed as collateral and dynamic adjustments based on market conditions. The proposal is currently under community review, assessing the trade-offs between generating high yield and maintaining strategic control over the underlying token supply. If approved, this move could set a precedent for other protocols seeking to responsibly monetize their native token holdings.
Source: Hyperliquid treasury seeks revenue boost using HYPE holdings as options collateral
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