How to Compare HLP Vault Returns vs Solo Trading on Hyperliquid

Here’s a comparison most platforms won’t volunteer: one independent analysis of roughly 10,000 Hyperliquid traders found about 86% of retail participants losing money over the period it covered, while HLP, the protocol’s own market-making vault, has posted mostly positive historical returns. That’s not a coincidence, it’s largely the same trade, seen from opposite sides.

This guide is part of TradeOnDEX’s Hyperliquid how-to series within Perpetual Futures, and builds on understanding how HLP works.

Disclosure: TradeOnDEX may earn a commission from links to Hyperliquid on this page, at no extra cost to you. Full details at the end of this article.

Why HLP’s returns and retail trader returns are connected, not coincidental

HLP profits substantially from market-making and from absorbing liquidated positions, mechanically, the retail side of the market losing money and HLP gaining are often the same transaction viewed from two sides. This isn’t a claim that Hyperliquid is “rigged” against retail traders; it’s a structural feature of any market-making/liquidation-provider role, on any exchange.

This means for you, concretely: HLP’s historically positive returns are not evidence that “the house always wins” in a sinister sense, they’re evidence that a systematic, unemotional counterparty role performs differently than the average leveraged retail trader, for identifiable, explainable reasons.

What the retail trader data actually shows

That same analysis of roughly 10,000 accounts found about 86% of retail participants losing money over the period it covered, with profitability scaling sharply by account size: win rates around 15% for accounts under $10,000, rising to roughly 26% for accounts between $100,000 and $1 million, and around 42% for accounts above $1 million. Average daily P&L across all traders analyzed was negative.

Several structural reasons are commonly cited for this pattern: larger, more sophisticated accounts profit from the bid-ask spread that retail traders pay on entry; professional traders more deliberately account for funding rate dynamics; and retail traders more frequently get liquidated from oversized leverage relative to their account.

What HLP’s historical returns actually show

As covered in the HLP deposit guide, HLP has historically averaged roughly 15-30% annualized returns across various windows, with real negative weeks (a reported largest weekly drawdown around 1.4%) and a near-miss solvency threat during the March 2025 JELLY incident. It is not a risk-free return, and it is not guaranteed to continue at historical rates.

Comparing the two honestly: what this data does and doesn’t mean

This is not “HLP good, solo trading bad” as a blanket conclusion. HLP’s structural role (market-making, liquidations, systematic execution) is fundamentally different from what an individual discretionary or leveraged trader is doing, and the risk profiles aren’t equivalent. HLP depositors take on vault-specific risks (tail-risk drawdowns, protocol-level attack exposure) that a solo trader doesn’t have, and vice versa.

Account size correlating with profitability doesn’t mean retail traders are simply unlucky. The cited structural factors, spread costs, funding rate sophistication, position sizing discipline, are learnable and correctable to some degree; account size is a proxy for experience and risk management practice as much as it is a cause on its own.

A depositor in HLP is not “trading better” than a retail trader, they’re taking a structurally different position entirely. Comparing “my HLP return” to “my trading P&L” isn’t really an apples-to-apples comparison of skill; it’s a comparison between two different roles in the same market.

Neither option removes risk, they distribute it differently. HLP depositors face vault-level tail risk (a bad week, a rare protocol-level incident); solo traders face position-level risk (leverage, liquidation, their own decision-making). Choosing between them, or doing both, is a risk-allocation decision, not a search for a risk-free option.

A structural comparison, not a performance guarantee

See it for yourself

If you’re deciding how to allocate between the two, treat it as a genuine risk-allocation question, not a search for the historically “better” option, read both the HLP vault guide and the liquidation-avoidance walkthrough before deciding. You can review current data on both at app.hyperliquid.xyz.

Frequently asked questions

Does HLP’s historically positive return mean Hyperliquid is rigged against traders?

No, it reflects HLP’s structural role as a market-maker and liquidation counterparty, a pattern seen in market-making broadly, not evidence of manipulation.

Is depositing in HLP a safer alternative to trading myself?

It’s a different kind of risk, not a safer version of the same risk, HLP carries vault-level tail risk and depends on continued positive strategy performance, which is not guaranteed.

Why do larger accounts have higher win rates in the retail trader data?

Cited factors include better absorption of spread costs, more sophisticated use of funding rate dynamics, and more disciplined position sizing relative to smaller accounts, though this is a pattern, not a guarantee for any individual trader.

Can I do both, deposit in HLP and trade solo?

Yes, they’re not mutually exclusive, many traders treat them as separate allocations with different risk profiles, rather than choosing one over the other.

Affiliate disclosure

TradeOnDEX may earn a commission if you sign up, trade, or deposit through a link on this page, at no extra cost to you. Hyperliquid’s own affiliate/referral terms are still being confirmed for this site, so links here are direct and untracked for now. This article is educational and is not financial advice or a recommendation to choose either option; both carry real risk of loss. See our disclaimer for the full risk warning.