Kinetiq Hyperliquid
Kinetiq Hyperliquid is the largest liquid staking protocol built natively on the Hyperliquid blockchain, specifically on HyperEVM, Hyperliquid's Ethereum-compatible execution layer. Kinetiq enables holders of HYPE, the native token of the Hyperliquid network, to stake their tokens and receive Kinetiq Staked HYPE (kHYPE) in return. kHYPE is a liquid staking token that earns staking rewards automatically while remaining freely tradeable, transferable, and composable across decentralized finance protocols.
Since its launch on July 15, 2025, Kinetiq Hyperliquid has grown to become a foundational piece of infrastructure within the Hyperliquid ecosystem, reaching a peak total value locked of approximately $2.6 billion and commanding more than 82 percent of the liquid staking market on Hyperliquid. The protocol's product suite has expanded beyond liquid staking to include Markets by Kinetiq, a perpetual futures trading platform; Kinetiq Earn, an automated DeFi yield vault; and iHYPE, an institutional-grade staking product designed for regulated entities. The KNTQ governance token was launched on November 27, 2025, establishing a formal governance layer for the protocol.
Overview
Kinetiq Hyperliquid is a decentralized, non-custodial liquid staking protocol that addresses the fundamental trade-off between staking and liquidity. In traditional proof-of-stake networks, stakers must lock their tokens to secure the network and earn rewards, rendering those assets illiquid and unusable in decentralized finance applications. Kinetiq eliminates this trade-off by allowing users to stake HYPE and receive kHYPE, a liquid representation of their staked position that can be used as collateral, traded on decentralized exchanges, or deployed into yield strategies while the underlying HYPE continues earning staking rewards.
The protocol operates on HyperEVM, Hyperliquid's EVM-compatible smart contract layer that is directly attached to HyperCore, the high-performance order book and consensus engine of the Hyperliquid Layer 1. This native integration means Kinetiq Hyperliquid benefits from the speed and throughput of the Hyperliquid network while maintaining full compatibility with Ethereum-based development tooling and standards.
Kinetiq Hyperliquid stands apart from other liquid staking protocols through several distinguishing features: its autonomous StakeHub validator management system, which algorithmically selects and rebalances delegations across high-performing validators; a non-rebasing token model that simplifies DeFi integrations; an expanding product suite that includes perpetual futures markets and institutional staking rails; and a multi-layered security architecture backed by eight independent audits and the largest bug bounty program on HyperEVM.
History and founding
Founding
Kinetiq was founded in late 2024 by a team of builders active within the Hyperliquid ecosystem. The founding team, including co-founder and CTO Justin Greenberg, recognized the need for liquid staking infrastructure on Hyperliquid as the network transitioned to a fully decentralized proof-of-stake consensus model. At the time, Hyperliquid's staking mechanism required users to lock their HYPE tokens with no ability to use them in DeFi applications, creating a significant opportunity cost for participants who wished to both secure the network and engage with the growing ecosystem of protocols on HyperEVM.
The project raised $1.75 million from investors deeply embedded in the Hyperliquid ecosystem to fund development and initial launch operations. This strategic investor base ensured that Kinetiq's backers had direct alignment with the long-term success of the Hyperliquid network and its staking infrastructure.
Development timeline
Prior to its mainnet launch, Kinetiq underwent extensive security review and preparation. The earliest security audits of the kHYPE liquid staking contracts were conducted in March 2025 by both Pashov and Zenith, followed by a competitive audit through Code4rena in April 2025 and an additional review by Spearbit in June 2025. This pre-launch audit investment was unusual for a protocol of Kinetiq's size and reflected the team's commitment to launching with institutional-grade security guarantees.
The protocol launched on mainnet on Monday, July 15, 2025. Early traction was remarkable by any measure within decentralized finance. Within the first 24 hours, Kinetiq attracted over $460 million in capital across approximately 2,800 holders, resulting in an average stake of roughly $164,280 per wallet. This opening-day performance signaled strong institutional and whale-level interest in Hyperliquid-native liquid staking from the outset.
Growth continued rapidly throughout the summer and fall of 2025. By mid-July, total value locked had already exceeded $458 million. By September 11, 2025, TVL had surged past $2.1 billion, with more than 1.6 billion HYPE staked through the protocol. In August 2025, iHYPE launched with Hyperion DeFi as the first institutional depositor. In September 2025, the $5 million bug bounty program was established through Cantina. Kinetiq reached a peak TVL of approximately $2.6 billion before settling around the $800 million to $1 billion range by early 2026, reflecting broader cryptocurrency market dynamics.
The KNTQ governance token genesis event took place on November 27, 2025, marking the first major token launch on the Hyperliquid network. In the same month, Markets by Kinetiq was deployed through HIP-3 with Spearbit providing the security audit. The sKNTQ staking module followed with its own Spearbit audit in January 2026, completing the protocol's core product suite.
How Kinetiq Hyperliquid works
Kinetiq Hyperliquid operates through a system of audited smart contracts deployed on HyperEVM. The protocol accepts HYPE deposits, delegates them to a diversified set of high-performing validators through its StakeHub system, and issues kHYPE tokens to depositors at the current exchange rate. The entire process is non-custodial, meaning users retain ultimate control over their staked assets at all times, and all delegation activity occurs transparently on-chain.
Staking flow
The Kinetiq Hyperliquid liquid staking process follows a straightforward sequence. First, a user connects a Hyperliquid-compatible wallet to the Kinetiq application at kinetiq.xyz and selects the amount of HYPE they wish to stake. The protocol's StakingManager smart contract calculates the equivalent amount of kHYPE to issue based on the current exchange rate between kHYPE and HYPE. The kHYPE tokens are minted instantly and deposited into the user's wallet. From this point onward, the user's kHYPE begins accruing staking rewards automatically.
Behind the scenes, the deposited HYPE is routed to StakeHub, which handles all validator delegation decisions. StakeHub evaluates validator performance metrics including uptime, commission rates, block production history, and slashing risk, then distributes the staked HYPE across a diversified set of validators to maximize yield and minimize risk. Users are not required to select validators manually or have any technical knowledge of the validator set. This abstraction of validator complexity is one of the core value propositions of Kinetiq Hyperliquid, as it transforms a multi-step, research-intensive process into a single transaction.
Unstaking and withdrawals
When a user wishes to redeem their kHYPE for the underlying HYPE, they initiate a withdrawal request through the protocol. The unstaking process involves a security cooldown period, consistent with Hyperliquid's native staking design, which includes a seven-day unstaking queue for transfers from the staking account to the spot account. During this delay, the kHYPE is burned and the corresponding HYPE, including all accumulated rewards, is released from the buffer pool and returned to the user.
For users who require immediate liquidity, kHYPE can be swapped instantly on supported decentralized exchanges within the Hyperliquid ecosystem, bypassing the withdrawal queue entirely. This secondary market liquidity is a critical advantage of liquid staking over traditional staking, where locked tokens cannot be accessed until the unbonding period expires. An instant unstake feature, audited by Pashov in November 2025, provides an additional pathway for faster redemptions directly through the protocol.
Smart contract architecture
Kinetiq Hyperliquid's smart contract architecture is built around several core components deployed on HyperEVM. The StakingManager contract serves as the primary entry point for deposits and withdrawals, handling the minting and burning of kHYPE tokens based on the current exchange rate. The StakeHub module manages all validator delegation logic, including scoring, selection, and rebalancing. A separate buffer pool contract maintains a reserve of liquid HYPE to facilitate withdrawal requests without requiring immediate undelegation from validators.
The architecture employs role-based access controls and multi-signature governance to protect against unauthorized modifications. Emergency pause mechanisms allow the protocol to halt operations if a critical vulnerability is detected, providing an additional layer of protection. All contracts are upgradeable through governance, ensuring the protocol can evolve while maintaining security guarantees established through its audit program.
Kinetiq Staked HYPE (kHYPE)
Kinetiq Staked HYPE, commonly referred to as kHYPE, is the primary liquid staking token of the Kinetiq Hyperliquid protocol. It represents a claim on a proportional share of the pooled HYPE staked with validators, plus all accumulated staking rewards. kHYPE is a standard ERC-20-compatible token on HyperEVM, meaning it can be transferred, traded, and used as collateral across any protocol that supports the token standard.
Non-rebasing design
One of the most important design decisions in Kinetiq Hyperliquid is the choice of a non-rebasing model for kHYPE. In a rebasing token model, the number of tokens in a holder's wallet increases over time to reflect earned rewards, which can create complications for DeFi integrations, tax reporting, and user comprehension. Kinetiq instead uses a non-rebasing approach where the number of kHYPE tokens in a holder's wallet remains constant after the initial minting. Rewards are reflected through an appreciating exchange rate between kHYPE and HYPE rather than through changes in token quantity.
This design choice has several practical advantages. It simplifies accounting and tax considerations because the token balance does not fluctuate. It makes DeFi integrations more straightforward since protocols do not need to account for changing balances. And it provides an intuitive user experience where holders can simply track the rising redemption value of their kHYPE position over time.
Exchange rate mechanics
The kHYPE-to-HYPE exchange rate is the mechanism through which staking rewards are distributed to kHYPE holders. When Kinetiq collects staking rewards from the Hyperliquid network's validator set, these rewards are added to the total pool of staked HYPE backing all outstanding kHYPE. Because the total supply of kHYPE only increases when new users deposit HYPE, and the total pool of backing HYPE increases both from new deposits and from accumulated validator rewards, the amount of HYPE redeemable per kHYPE continuously rises.
At launch, the exchange rate begins at 1:1, meaning one kHYPE is redeemable for one HYPE. As staking rewards accrue, the exchange rate gradually increases. At the current staking level on the Hyperliquid network, with approximately 400 million total HYPE staked, the annual reward rate is roughly 2.37 percent per year. This rate follows a formula inspired by Ethereum's staking reward model, where the reward rate is inversely proportional to the square root of total HYPE staked. Rewards are accrued every minute and distributed to stakers daily, compounding automatically.
Wrapped staked HYPE (wstHYPE)
Alongside kHYPE, users may encounter wstHYPE (wrapped staked HYPE) across the Hyperliquid DeFi ecosystem. wstHYPE is a wrapped version of kHYPE that is used in certain protocol integrations where a standardized token interface is required. Both kHYPE and wstHYPE represent the same underlying staked position and accrued rewards. The existence of wstHYPE ensures broad compatibility across the full range of DeFi protocols on HyperEVM, including those with specific oracle requirements. Dedicated price feeds, including KHYPEPriceFeed and WSTHYPEPriceFeed, are sourced through Redstone oracles to provide accurate pricing data for both token variants across lending markets, liquidity pools, and other DeFi applications.
StakeHub: autonomous validator management
StakeHub is Kinetiq Hyperliquid's autonomous validator scoring and delegation management system. It is one of the protocol's most significant technical innovations and a key differentiator from both manual staking and competing liquid staking solutions. StakeHub removes the burden of validator selection from individual users and replaces it with an algorithmic system that continuously monitors, evaluates, and optimizes stake distribution across the Hyperliquid validator set.
Validator scoring
StakeHub assigns each active Hyperliquid validator a performance score based on multiple quantitative metrics. These include validator uptime and availability, block production frequency and consistency, commission rates charged to delegators, historical slashing incidents or governance violations, and the overall contribution of each validator to network security and decentralization. The scoring algorithm is designed to balance yield maximization with risk minimization, ensuring that staked HYPE is distributed across validators that are both high-performing and reliable.
Hyperliquid's validator set operates under a delegated proof-of-stake model using the HyperBFT consensus algorithm. Active validators must maintain a self-delegation of at least 10,000 HYPE locked for one year. Validators produce blocks and receive rewards proportional to their total delegated stake. Validators may charge a commission to delegators, but cannot increase their commission above 1 percent without restriction, protecting delegators from predatory fee increases. StakeHub incorporates all of these factors into its scoring model to ensure optimal delegation decisions.
Automatic rebalancing
In addition to initial delegation, StakeHub continuously monitors validator performance and adjusts delegations accordingly. If a validator's performance degrades, its uptime drops, or its commission changes unfavorably, StakeHub automatically rebalances by shifting stake to better-performing validators. This ongoing optimization happens without any input required from kHYPE holders, effectively providing a managed staking experience with the decentralization benefits of a permissionless protocol.
Network decentralization
StakeHub's rebalancing mechanism also serves a broader purpose beyond yield optimization: it contributes directly to the health and decentralization of the Hyperliquid network. By distributing stake more evenly across qualified validators rather than concentrating it among a small number of dominant operators, Kinetiq Hyperliquid helps prevent centralization of consensus power. This is particularly important in a delegated proof-of-stake system like HyperBFT, where the security of the network depends on a diverse and honestly-acting quorum of validators controlling more than two-thirds of total stake.
Without liquid staking protocols like Kinetiq, individual stakers might default to delegating to the most visible or largest validators, leading to stake concentration. StakeHub's algorithmic approach evaluates the full validator set objectively and distributes delegations based on performance rather than popularity, promoting a more resilient and decentralized validator ecosystem.
Markets by Kinetiq (kmHYPE)
Markets by Kinetiq is a fully on-chain, decentralized perpetual futures trading platform built natively on Hyperliquid. It represents an expansion of the Kinetiq Hyperliquid product suite beyond liquid staking and into decentralized derivatives trading. Markets enables 24/7/365 trading of perpetual futures contracts on a diverse range of asset classes, including equities, indices, currencies, and commodities, all settled on-chain through Hyperliquid's infrastructure.
HIP-3 integration
Markets by Kinetiq is deployed using Hyperliquid's HIP-3 framework, known as Builder-deployed perpetuals. HIP-3, activated on mainnet on October 13, 2025, allows qualified deployers to launch their own perpetual DEX directly on HyperCore, Hyperliquid's core execution layer. This framework requires deployers to stake 500,000 HYPE as a security bond and provides access to HyperCore's high-performance order book and margining systems. In return, deployers earn a 50 percent share of all trading fees generated on their markets.
By deploying through HIP-3, Markets by Kinetiq inherits the full infrastructure of Hyperliquid's exchange layer, including the same order book, matching engine, and margining systems used by Hyperliquid's native markets. This means traders on Markets benefit from centralized-exchange-level execution speed and liquidity depth, all within a fully decentralized and on-chain environment.
Oracle infrastructure
Accurate and continuous pricing is essential for perpetual futures trading, especially for non-crypto assets that trade during specific market hours. Kinetiq has partnered with Kaiko, a global leader in digital asset and traditional market data, to provide institutional-grade oracle infrastructure for Markets. Kaiko's HIP-3 oracle solution delivers real-time pricing at one-second intervals across diverse global asset classes.
The oracle infrastructure includes automated protections for market closures, corporate actions such as stock splits and dividends, periods of low liquidity, and unusual price movements. Layered fallback and validation mechanisms ensure uninterrupted pricing even during abnormal market conditions. USDH serves as the collateral asset for Markets, providing a stablecoin-denominated trading experience.
The kmHYPE token
kmHYPE is a reward-accruing liquid staking token that represents HYPE staked to support Markets through the HIP-3 framework. Similar to kHYPE, kmHYPE follows a non-rebasing model where the number of tokens in a holder's wallet remains constant while the value per token increases as deployer revenue is realized. Specifically, 10 percent of the deployer revenue share from Markets is distributed to kmHYPE holders, creating a direct economic link between trading activity on Markets and the value of the kmHYPE token.
Markets by Kinetiq is described as community-owned through the kmHYPE mechanism, making it the first decentralized exchange liquid staking token, sometimes referred to as an exchange LST or exLST. kmHYPE holders effectively co-own the Markets platform and benefit from its growth in trading volume and fee revenue.
Supported asset classes
Markets by Kinetiq supports perpetual futures trading across a diverse range of global asset classes, distinguishing it from cryptocurrency-only derivatives platforms. Supported asset classes include individual equities from major global exchanges, broad market indices such as the Russell 2000 and energy sector indices, major currency pairs from the foreign exchange market, and physical commodities including crude oil. This multi-asset capability is made possible by Kaiko's institutional-grade oracle infrastructure, which delivers continuous pricing data for each asset class even outside of traditional market hours, enabling truly 24/7/365 trading.
The expansion into traditional asset classes represents Kinetiq's vision of building a universal, permissionless trading layer for every asset class. By bringing equities, indices, currencies, and commodities on-chain through Hyperliquid's high-performance infrastructure, Markets by Kinetiq aims to provide the speed, composability, and openness of cryptocurrency markets to previously siloed financial instruments.
Kinetiq Earn
Kinetiq Earn is a fully automated DeFi strategy vault that allows kHYPE holders to access higher yield opportunities across the Hyperliquid DeFi ecosystem without manually deploying capital to individual protocols. The vault is built in partnership with Veda, a DeFi infrastructure provider, and is managed by Veda's in-house risk curator, Seven Seas, which oversees more than $4 billion in total value locked across all of its managed vaults.
Veda vault and vkHYPE
When users deposit kHYPE or HYPE into the Kinetiq Earn vault, they receive vkHYPE, a vault receipt token that represents their proportional share of the vault's total assets. vkHYPE is non-transferable for 24 hours after depositing for security purposes. Withdrawals can be processed within approximately three to five days, with a maximum window of ten days. The vault charges no entry fees, no exit fees, and no management fees. A 20 percent performance fee is applied to earned yield, and the displayed APY on the dashboard is shown net of all fees.
As of early 2026, the Kinetiq Earn vault holds approximately $321 million in total value locked and delivers an APY of approximately 5.37 percent, which exceeds the base staking yield of roughly 2.37 percent by layering additional DeFi yield on top of the native staking rewards.
Yield strategies
The Veda risk curator allocates vault capital across a diversified set of DeFi protocols within the Hyperliquid ecosystem. These allocations are continuously monitored and rebalanced to optimize for risk-adjusted returns. Major protocol integrations include Hyperlend, a lending market with over $128 million in kHYPE deposits; Pendle, a yield tokenization protocol supporting more than $83 million in TVL with yields exceeding 37 percent APY; Project X, a decentralized exchange with over $40 million in TVL; and additional protocols including Harmonix, Valantis, Hybra, Kittenswap, and Spectra.
Users who prefer a self-directed approach may choose to deploy their kHYPE manually across any of the supported protocols in the Hyperliquid ecosystem, using Kinetiq's earn page as a directory of available integrations.
Risk considerations
While the Kinetiq Earn vault provides convenient access to higher yields, users should understand the additional risk layers involved. Depositing into the vault introduces exposure to the smart contract risk of every underlying protocol to which Veda allocates capital. Although Veda's risk curator, Seven Seas, conducts institutional-grade vetting of each protocol including audit assessment and security practice reviews, no DeFi strategy is entirely risk-free. Potential risks include smart contract vulnerabilities in integrated protocols, temporary liquidity constraints during high withdrawal demand, and market risk associated with the underlying DeFi positions. The vault is explicitly noted as not being open to persons or citizens of the United States and other restricted countries.
Institutional staking (iHYPE)
iHYPE, which stands for Kinetiq-staked HYPE for Institutions, is Kinetiq Hyperliquid's institutional-grade liquid staking product. It is purpose-built for KYB/KYC-compliant entities, including regulated funds, publicly listed companies, and enterprise treasuries that require compliance-ready infrastructure for participating in on-chain staking.
Key features
iHYPE provides several features specifically tailored to institutional requirements. Each institution receives a private, risk-isolated staking pool that operates separately from the public kHYPE pool, ensuring dedicated validator delegation and isolation from retail flows. Institutions can designate their own preferred validators for enhanced governance, compliance alignment, or performance optimization. Each institutional deployment supports custom LST tickers, allowing organizations to issue their staked HYPE under their own branded token name while retaining all core staking benefits. The infrastructure is built on enterprise-grade staking rails with operational standards designed to meet institutional compliance requirements.
Hyperion DeFi partnership
The first institution to stake through iHYPE is Hyperion DeFi, Inc., a United States NASDAQ-listed company (ticker: HYPD) that is building a long-term strategic treasury of HYPE tokens. Hyperion DeFi stakes directly via Kinetiq's compliant liquid staking infrastructure, operating under a dedicated co-branded validator called Kinetiq x Hyperion, with validator infrastructure supported by Pier Two, an institutional staking services provider.
Under the joint validator operators' agreement, staking commissions and other validator-level rewards are allocated among Hyperion DeFi at 50 percent, Kinetiq at 25 percent, and Pier Two at 25 percent. Hyperion DeFi's branded LST is called HiHYPE, standing for Hyperion iHYPE. In July 2025, Hyperion DeFi purchased an additional $5 million in HYPE tokens at an average price of $36.14 per token specifically for deployment into the iHYPE pool. As of September 30, 2025, Hyperion DeFi had approximately 834,050 HYPE staked directly to the Kinetiq x Hyperion validator.
The adoption of iHYPE by a publicly listed, SEC-reporting company represents a significant milestone for Kinetiq Hyperliquid and for the broader Hyperliquid ecosystem, demonstrating that regulated capital can engage directly with on-chain staking through compliant infrastructure.
Regulatory outlook
As CTO Justin Greenberg noted at the time of iHYPE's launch, the product was developed in response to the SEC's evolving guidance on liquid staking tokens, which has created a clearer regulatory pathway for institutional participation. The iHYPE infrastructure is designed to be compatible with qualified custodian requirements and fund audit systems, enabling institutional participants to integrate on-chain staking yield into their existing compliance and reporting frameworks.
Hyperion DeFi's public SEC filings provide transparency into how a regulated entity structures its engagement with Kinetiq's staking infrastructure. The company reports its staked HYPE positions, validator commission arrangements, and LST holdings in its regulatory disclosures, establishing a precedent for how institutional participation in liquid staking may be documented and reported. iHYPE is already integrated with key partners including trading firms, custodians, and validators to ensure seamless onboarding and operational continuity for institutional participants.
KNTQ governance token
KNTQ is the governance token of the Kinetiq protocol, sitting at the center of its governance structure and serving as the sole instrument through which all of Kinetiq's protocol value accrues. The KNTQ genesis event took place on November 27, 2025 on the Hyperliquid network, representing the first major token launch in the Hyperliquid ecosystem.
Tokenomics and distribution
KNTQ has a maximum supply of 1,000,000,000 (one billion) tokens. The distribution of the total supply is structured as follows:
| Allocation | Percentage | Description |
|---|---|---|
| Protocol growth and rewards | 30% | Reserved for ongoing protocol incentives and ecosystem growth |
| Initial airdrop | 25% | 24% to kPoints holders, 1% to Hypurr holders |
| Core contributors | 23.5% | Allocated to the founding and development team |
| Kinetiq Foundation | 10% | Reserved for the Kinetiq Foundation's operations |
| Investors | 7.5% | Allocated to early investors in the $1.75M raise |
| Liquidity | 4% | Reserved for initial liquidity seeding |
The initial airdrop was the principal vehicle for broadening community ownership, targeting active users of the Hyperliquid ecosystem and early stakeholders. Eligible recipients were required to agree to the Kinetiq Foundation Terms of Use by November 21, 2025, at 20:00 UTC.
Value accrual mechanisms
Kinetiq employs several mechanisms to ensure protocol value flows directly to KNTQ holders. Under the KIP-2 governance proposal, 100 percent of the validator commission share earned by the protocol is used for KNTQ buybacks. Kinetiq active-set validators share 50 percent of the commission charged on stake from the protocol to participate in this arrangement. Additionally, 70 percent of protocol revenue is directed to KNTQ buybacks, with the remaining 30 percent allocated to the Kinetiq treasury for ongoing operations.
All KNTQ acquired through these buyback mechanisms is sent to the sKNTQ staking contract and distributed proportionally to sKNTQ holders, creating a direct link between protocol revenue generation and token holder returns.
sKNTQ staking tiers
Staking KNTQ creates sKNTQ and grants holders access to tiered protocol benefits, including increased referral shares, trading fee discounts on Markets, and kmHYPE minting allocations. The tier structure is as follows:
| Tier | sKNTQ required | Referral share | Taker discount |
|---|---|---|---|
| 1 | 50,000 | 6% | 10% |
| 2 | 100,000 | 7% | 15% |
| 3 | 500,000 | 8% | 20% |
| 4 | 1,250,000 | 10% | 25% |
| 5 | 2,500,000 | 15% | 30% |
Higher tiers also unlock larger kmHYPE minting allocations, granting greater access to the Markets by Kinetiq ecosystem and its associated revenue share.
Security and audits
Security is a foundational priority for Kinetiq Hyperliquid, given that the protocol manages hundreds of millions of dollars in staked assets. Kinetiq has adopted a multi-layered approach to protocol safety that combines independent security audits, a substantial bug bounty program, role-based access controls, multi-signature governance, and emergency response systems.
Audit history
As of early 2026, Kinetiq has completed eight independent security audits conducted by some of the most respected security firms in the blockchain industry. These audits cover the core kHYPE liquid staking contracts, the kmHYPE Markets contracts, the sKNTQ staking module, and the iHYPE institutional infrastructure. The publicly available audit reports include:
| Audit | Firm | Date |
|---|---|---|
| kHYPE LST | Pashov | March 2025 |
| kHYPE LST | Zenith | March 2025 |
| kHYPE LST | Code4rena | April 2025 |
| kHYPE LST | Spearbit | June 2025 |
| kHYPE LST (Instant Unstake) | Pashov | November 2025 |
| kmHYPE Markets | Spearbit | November 2025 |
| kmHYPE Markets | Zenith | November 2025 |
| sKNTQ | Spearbit | January 2026 |
The breadth and depth of Kinetiq's audit coverage reflects the protocol's commitment to ensuring the safety of user funds across every component of its smart contract infrastructure.
Bug bounty program
On September 15, 2025, Kinetiq launched a bug bounty program through Cantina, a leading security platform in the web3 space. The program offers up to $5 million in rewards for the discovery of critical vulnerabilities, making it the largest bug bounty program on HyperEVM and one of the largest in the Hyperliquid ecosystem. The bounty covers all in-scope Kinetiq smart contracts and has received over 369 findings submissions from security researchers worldwide.
The reward structure is tiered by severity, with critical vulnerabilities eligible for payouts up to $5,000,000 and high-severity findings up to $50,000. All researchers must complete KYC verification prior to receiving payment. The program reinforces the principle that security is a collaborative effort, tapping into the global community of white-hat researchers to identify potential attack vectors that may not be caught through traditional audit engagements alone.
Security architecture
Beyond audits and bug bounties, Kinetiq Hyperliquid employs a multi-layered security architecture designed to protect user funds at every level of the protocol stack. Role-based access controls restrict which addresses can execute sensitive operations such as contract upgrades, parameter changes, and emergency actions. Multi-signature governance requires multiple authorized signers to approve any critical transaction, eliminating single points of failure in protocol administration.
An emergency response system provides the ability to pause protocol operations if a vulnerability or anomalous behavior is detected. This circuit-breaker mechanism allows the team to halt deposits, withdrawals, or delegation activity while an issue is investigated and resolved, minimizing potential damage from any exploit. The protocol's approach to security reflects a defense-in-depth philosophy where no single safeguard is relied upon exclusively; instead, multiple overlapping layers of protection work together to create a resilient system capable of withstanding sophisticated attack vectors.
DeFi integrations and ecosystem
One of the most important measures of a liquid staking token's utility is the breadth and depth of its DeFi integrations. Kinetiq Hyperliquid has established kHYPE as the standard liquid staking token across the Hyperliquid DeFi ecosystem, with integrations spanning lending markets, decentralized exchanges, yield protocols, and structured products.
Lending markets
kHYPE is accepted as collateral across major lending protocols on HyperEVM. Hyperlend, the largest lending market with over $128 million in kHYPE deposits, allows users to borrow stablecoins and other assets against their kHYPE positions. Felix, a collateralized debt position protocol, enables users to mint feUSD, a dollar-pegged stablecoin, at approximately 40 percent loan-to-value ratio using kHYPE as collateral. Additional lending integrations include HypurrFi and Sentiment, expanding the range of borrowing options available to kHYPE holders.
DEX and liquidity protocols
kHYPE is integrated with multiple decentralized exchanges across the Hyperliquid ecosystem, providing deep liquidity for trading and enabling users to provide liquidity in kHYPE-paired pools for additional yield. Supported exchanges include Project X, Hyperswap, Hybra, Ramses, Kittenswap, Ultrasolid, Curve, and Balancer. These integrations ensure that kHYPE holders can access liquid markets for instant swaps without relying on the protocol's unstaking queue.
Yield protocols
Yield tokenization and optimization protocols have become significant venues for kHYPE deployment. Pendle, a leading yield tokenization protocol, reported over $83 million in TVL for Kinetiq-related integrations, with APY exceeding 37 percent through yield-splitting strategies. Harmonix provides additional yield optimization opportunities at approximately 7.82 percent APY. These yield protocol integrations allow sophisticated users to separate and trade the yield component of their kHYPE positions, enabling advanced strategies such as fixed-rate yield locking and yield speculation.
Kinetiq Hyperliquid vs traditional staking
The comparison between Kinetiq Hyperliquid liquid staking and traditional HYPE staking illustrates the fundamental value proposition of the protocol. The table below summarizes the key differences:
| Feature | Traditional HYPE staking | Kinetiq Hyperliquid (kHYPE) |
|---|---|---|
| Liquidity | Locked during staking period | Fully liquid via kHYPE token |
| DeFi utility | None while staked | Collateral, trading, LP, yield strategies |
| Validator selection | Manual, requires research | Automated via StakeHub |
| Reward compounding | Auto-compounded daily | Auto-compounded via exchange rate |
| Unbonding period | 7-day unstaking queue | Instant swap or 7-day queue |
| Validator rebalancing | Manual, user-managed | Automatic and continuous |
| Institutional features | None | iHYPE with KYB/KYC, custom validators |
| Additional yield layers | Staking rewards only | Staking + DeFi yield via Earn vault |
For most users who are active in the Hyperliquid DeFi ecosystem, liquid staking through Kinetiq Hyperliquid offers a meaningfully superior experience compared to native staking. The ability to earn staking rewards while simultaneously deploying capital into lending, liquidity provision, and yield strategies represents a significant improvement in capital efficiency. The primary trade-off is the introduction of smart contract risk, which Kinetiq mitigates through its extensive audit program and bug bounty.
Growth and adoption
Key milestones
The growth trajectory of Kinetiq Hyperliquid has been exceptional by the standards of liquid staking protocols. The following milestones illustrate the protocol's rapid ascent within the Hyperliquid ecosystem and the broader DeFi landscape:
- July 15, 2025 (launch day): Kinetiq attracted over $460 million in capital across approximately 2,800 holders within the first 24 hours of operation.
- First week: TVL exceeded $600 million, establishing Kinetiq as the fastest-growing liquid staking token in DeFi history at that point.
- First month: TVL surpassed $1.3 billion, securing Kinetiq's position as the dominant liquid staking protocol on Hyperliquid.
- August 2025: iHYPE launched with Hyperion DeFi as first institutional depositor.
- September 2025: TVL reached over $2.1 billion with more than 1.6 billion HYPE staked, representing approximately 3.3 percent of circulating HYPE supply. The $5 million bug bounty was launched through Cantina.
- Peak TVL: Approximately $2.6 billion, ranking Kinetiq among the top ten liquid staking protocols globally.
- November 2025: KNTQ governance token genesis event. Markets by Kinetiq deployed through HIP-3 with Kaiko oracle integration.
- January 2026: sKNTQ staking module launched following Spearbit audit.
Revenue and fees
The protocol's cumulative fee generation demonstrates a sustainable economic model built on real staking activity rather than speculative incentives. Through Q1 2026, Kinetiq had generated approximately $17.92 million in cumulative fees. The quarterly breakdown shows $6.36 million in Q3 2025, $8.02 million in Q4 2025, and $3.53 million in Q1 2026. Cumulative protocol revenue reached $1.57 million, with annualized revenue running at approximately $959,286 and annualized fees at approximately $16.71 million.
Revenue streams are derived primarily from staking rewards and deposit/withdrawal fees. Under the KIP-2 framework, a significant portion of this revenue is directed toward KNTQ buybacks for distribution to sKNTQ holders, creating a direct economic feedback loop between protocol usage and governance token value.
Competitive landscape
Kinetiq holds approximately 82.5 percent of the liquid staking market on Hyperliquid, an exceptionally dominant position that reflects both the protocol's first-mover advantage and its superior product execution. The nearest competitors by TVL include StakedHYPE (stHYPE) at approximately $153 million, Hyperbeat LST at approximately $17 million, Kintsu at approximately $5 million, and SpinUp Liquid Staking at approximately $326,000. The combined TVL of all competitors represents less than 20 percent of Kinetiq's market share, underscoring the protocol's overwhelming dominance in Hyperliquid's liquid staking landscape.
This market concentration is driven by several factors. Kinetiq's early launch timing, extensive DeFi integrations, institutional products, and comprehensive security program have created significant network effects that are difficult for newcomers to replicate. As more protocols integrate kHYPE as their primary liquid staking token, switching costs for the ecosystem increase, reinforcing Kinetiq's position as the standard infrastructure layer for staked HYPE on Hyperliquid.
The Hyperliquid network
Understanding Kinetiq Hyperliquid requires context on the Hyperliquid blockchain itself. Hyperliquid is a high-performance Layer 1 blockchain designed to deliver centralized-exchange-level speed and user experience within a fully decentralized architecture. The network consists of two primary execution environments: HyperCore, the high-performance order book and consensus engine that handles trading, margining, and settlement; and HyperEVM, an Ethereum-compatible smart contract layer where DeFi protocols such as Kinetiq are deployed.
Hyperliquid uses a delegated proof-of-stake consensus model called HyperBFT. The network's security depends on validators staking HYPE tokens and participating honestly in the consensus process. Stakers delegate their HYPE to validators, who produce blocks and earn rewards proportional to their total delegated stake. The staking reward rate follows a formula inspired by Ethereum, yielding approximately 2.37 percent annually at current staking levels. Rewards are accrued every minute, distributed daily, and auto-compounded.
The validator set evolves in epochs of approximately 100,000 rounds, equating to roughly 90 minutes on mainnet. Validators can be jailed by peer vote if they fail to respond with adequate latency or frequency to consensus messages. This enforcement mechanism, combined with the economic incentives of staking, ensures that the validator set remains performant and reliable.
Kinetiq Hyperliquid's position as the largest liquid staking protocol on this network makes it a critical piece of Hyperliquid's overall security and decentralization infrastructure. By encouraging more HYPE to be staked through an accessible liquid staking mechanism, Kinetiq contributes directly to the economic security of the Hyperliquid consensus layer.
Risk factors
While Kinetiq Hyperliquid has established itself as the leading liquid staking protocol on the Hyperliquid network, users and investors should be aware of several categories of risk inherent to the protocol and the broader liquid staking model.
Smart contract risk: Despite eight independent security audits and a $5 million bug bounty program, no smart contract system can be guaranteed to be free of vulnerabilities. A critical exploit in Kinetiq's contracts could result in a loss of user funds. This risk extends to the integrated DeFi protocols where kHYPE is deployed as collateral or liquidity.
Exchange rate risk (de-peg): kHYPE's value relative to HYPE depends on the protocol functioning correctly and maintaining adequate liquidity. In periods of extreme market stress or if confidence in the protocol diminishes, kHYPE could trade at a discount to its theoretical redemption value on secondary markets. While the underlying HYPE backing kHYPE is always redeemable through the protocol's withdrawal mechanism, the seven-day cooldown period means that market prices may temporarily diverge from fundamental value.
Validator risk: The security and yield of kHYPE depend on the performance and honesty of the validators to which StakeHub delegates stake. Although StakeHub diversifies across multiple validators and continuously monitors performance, slashing events, extended downtime, or coordinated validator misbehavior could negatively impact staking returns or, in extreme cases, result in partial loss of staked HYPE.
Composability risk: When kHYPE is used as collateral in lending protocols, deployed in liquidity pools, or leveraged through yield strategies, users introduce additional layers of risk that compound upon each other. Liquidation cascades, oracle failures, or exploits in downstream protocols could result in losses that exceed simple staking risk.
Regulatory risk: The regulatory treatment of liquid staking tokens and governance tokens remains evolving across jurisdictions. Changes in regulatory frameworks could affect the operation of the protocol, the classification of kHYPE or KNTQ tokens, or the ability of institutional participants to engage with the platform.
Frequently asked questions
What is Kinetiq Hyperliquid?
Kinetiq Hyperliquid is the largest liquid staking protocol built natively on the Hyperliquid blockchain. It enables users to stake HYPE tokens and receive kHYPE, a liquid staking token that earns staking rewards automatically while remaining fully usable across DeFi protocols on HyperEVM.
What is kHYPE?
kHYPE (Kinetiq Staked HYPE) is a non-rebasing liquid staking token issued by Kinetiq. When users stake HYPE through Kinetiq, they receive kHYPE, which represents their staked position plus accumulated rewards. The kHYPE-to-HYPE exchange rate appreciates over time as validator rewards compound, meaning holders earn rewards simply by holding the token.
How does Kinetiq liquid staking work?
Users deposit HYPE into Kinetiq's audited smart contracts and receive kHYPE tokens instantly. The deposited HYPE is delegated to high-performing validators via StakeHub, Kinetiq's autonomous validator management system. Staking rewards are continuously added to the pool, increasing the kHYPE redemption value over time. Users can deploy kHYPE across DeFi while earning staking yield simultaneously.
What is the current APY for staking HYPE through Kinetiq?
The base staking APY for kHYPE is approximately 2.37 percent, reflecting the Hyperliquid network's native staking reward rate. Users who deposit into the Kinetiq Earn vault can access higher yields of approximately 5.37 percent APY through automated DeFi strategies managed by Veda.
What is the KNTQ token?
KNTQ is the governance token of the Kinetiq protocol with a maximum supply of 1 billion tokens. It was launched on November 27, 2025 on the Hyperliquid network. KNTQ holders can vote on protocol parameters, and staking KNTQ (creating sKNTQ) entitles holders to receive buybacks funded by protocol revenue from validator commissions and other sources.
What is iHYPE?
iHYPE is Kinetiq's institutional-only liquid staking product designed for KYB/KYC-compliant entities. It provides private risk-isolated staking pools, custom validator control, branded LST tickers, and regulated infrastructure. Hyperion DeFi, Inc. (NASDAQ: HYPD) is the first publicly listed company to use iHYPE.
Is Kinetiq safe and audited?
Kinetiq has completed eight independent security audits from leading firms including Spearbit, Code4rena, Pashov, and Zenith. The protocol also operates a $5 million bug bounty program through Cantina, the largest bug bounty on HyperEVM, with over 369 findings submissions from security researchers.
How do I unstake kHYPE?
kHYPE can be unstaked through the protocol with a security cooldown period of approximately seven days, consistent with Hyperliquid's native unstaking design. Alternatively, kHYPE can be swapped instantly on supported decentralized exchanges for immediate liquidity without any waiting period.
See also
- Hyperliquid — the Layer 1 blockchain on which Kinetiq operates
- Liquid staking — the DeFi category of protocols that issue liquid representations of staked assets
- HyperEVM — Hyperliquid's Ethereum-compatible smart contract execution layer
- HyperBFT — Hyperliquid's proof-of-stake consensus algorithm
- HIP-3 — Hyperliquid's framework for builder-deployed perpetual futures markets
- Delegated proof of stake — the consensus mechanism used by the Hyperliquid network