# rHYPE-DN

The **Raga** **HYPE Delta-Neutral Vault(rHYPE-DN)** combines on-chain short positions and long holdings to generate consistent, market-neutral returns for users while maintaining full transparency through HyperCore and HyperEVM integration.

### Strategy Overview

The vault maintains a **delta-neutral exposure** to HYPE by simultaneously:

* **Shorting HYPE perpetuals on HyperCore**, earning positive funding rates from traders taking leveraged long positions, where average **funding rates for shorts** have historically hovered around **20–25% APR** annually.\
  These positions are managed programmatically through **CoreWriter**, ensuring on-chain execution and verifiable exposure.
* **Holding an equal amount of HYPE tokens on HyperEVM** vault contract, neutralizing price exposure and preserving asset balance.

This setup allows users to earn sustainable returns derived from **funding rate differentials** rather than speculative price movements.

### Upcoming Upgrade (v2) — Yield-Enhanced HYPE Vault

In the next iteration of the HYPE Delta-Neutral Vault, Raga will introduce **yield enhancement** by integrating the long HYPE leg with DeFi protocols on HyperEVM and partner ecosystems.

**Planned improvements include:**

* **Supplying HYPE to on-chain lending markets** or staking pools to generate additional base yield (expected 2-4% APR).
* **Maintaining the existing short exposure on HyperCore**, which continues to accrue funding.
* **Automated rebalancing logic** to optimize capital allocation between short and yield-bearing long positions, ensuring neutrality is maintained.

With this upgrade, users will earn **two simultaneous yield streams**:

1. **Funding Rate Yield** — from the short on HyperCore.
2. **DeFi Yield** — from supplying HYPE to on-chain protocols.

This design enhances total yield while maintaining a **fully hedged, non-directional position**.

#### APY Calculation

Unlike traditional staking or lending yields, returns in a **delta-neutral vault** depend primarily on **funding rates**, which fluctuate dynamically based on perpetual market conditions. To make this data more understandable and consistent for users, Raga Finance uses a **rolling average model** for APY estimation.

To present a clearer, more stable estimate of expected returns, Raga Finance calculates APY as the **average of funding rates over the last 8 hours**.

```
Vault APY=(Sum of Funding Rate (last 8 hours))×3×365/2
```

This rolling average ensures that displayed returns represent **a realistic expectation of the vault’s earning potential** while still reflecting real-time funding dynamics.

#### Withdrawals of Funds

Users can go to their portfolio and schedule a withdrawal. The oracle processes withdrawals every epoch and it takes 1-2 days for closing the positions and transfer the funds to users account. \
Once the withdrawal is scheduled, users can sit back and relax, the funds are automatically transferred to user wallets once positions are closed.