Investing in Hyperliquid vaults has some risk to it which can result in negative returns. In fact, the current APR for HLP is -0.39%. Over a long period of time, this vault has been profitable so it is up to you to consider the risk.
There are some time tested platforms like Compound, Curve, and Aave, which might be a safer choice but your returns will be more modest.
In case anyone sees this and gets confused or scared, let me provide some clarity.
HyperLiquid's HLP have been profitable since it's inception. It has amassed over $60m in profits. All was cool until recently when a whale did this:
1. He deposited to HyperLiquid
2. Opened a huge BTC long on hyperLiquid.
3. Withdrew margin so liquidation price immediately shot up.
4. HLP is responsible for liquidations on HyperLiquid so it took on the trade and couldn't sell it faster and that resulted in over $4m loss. I think total loss is around $4.3m.
Btw, the whale opened another trade on a different exchange and shorted Bitcoin. So they profited at the end of the day while HLP took an L.
HyperLiquid is already protecting against the issue repeating itself and they reduced max leverages allowed to 40x and 20x for both Bitcoin and ETH respectively. Also, they now require at least 20% margin so no one can withdraw all margin to get a position insta-liquidated.
I've used the vault for almost a year now and it's the first time the returns have been negative. I believe the current fixes should work and HLP will return back to profit ways.