Kinetiq is a liquid staking protocol built for the Hyperliquid ecosystem. It allows HYPE holders to participate in network staking while receiving kHYPE, a liquid staking token that can remain usable across supported DeFi applications. Instead of keeping staked HYPE completely locked in a native staking position, users can receive a token representing their staked position and accumulated rewards.
What Is Kinetiq? Kinetiq liquid staking
Kinetiq is designed around a simple idea: HYPE holders should be able to earn staking rewards without necessarily giving up the liquidity of their capital. Users deposit HYPE into the Kinetiq protocol and receive kHYPE according to the current exchange rate. The underlying HYPE is then delegated through Kinetiq's validator-management system.
Kinetiq's StakeHub system is designed to distribute stake among validators based on performance and other criteria. This removes the need for individual users to manually manage validator delegation while allowing their deposited HYPE to participate in network staking.
Kinetiq Staking Explained
Kinetiq staking starts when a user deposits HYPE through the protocol. In return, the user receives kHYPE. The kHYPE balance itself generally does not increase as rewards accumulate. Instead, the value represented by each kHYPE relative to HYPE increases through the protocol's reward-accruing mechanism.
This design is different from a rebasing liquid staking token. With a rebasing model, the token balance can change as rewards are distributed. With kHYPE, rewards are reflected through the exchange rate between kHYPE and HYPE.
What Is Kinetiq HYPE?
Kinetiq HYPE commonly refers to kHYPE, or Kinetiq Staked HYPE. It is the liquid staking token users receive when they stake HYPE through Kinetiq.
The purpose of kHYPE is to represent a user's share of the underlying staked HYPE. Depending on supported integrations, kHYPE can be held, transferred, traded, or used within DeFi applications. This gives HYPE holders additional flexibility compared with simply locking HYPE through native staking.
What Is Kinetiq Liquid Staking?
Kinetiq liquid staking combines two functions: staking and liquidity. Traditional HYPE staking involves delegating HYPE to validators and accepting the associated staking and unbonding conditions. Liquid staking introduces an additional token that represents the staked position.
With Kinetiq, HYPE is deposited and kHYPE is issued. The underlying assets can continue participating in staking while the kHYPE token can potentially be used elsewhere. This creates a more flexible way to participate in the Hyperliquid staking economy.
What Is kHYPE?
kHYPE stands for Kinetiq Staked HYPE. It is the core liquid staking token associated with Kinetiq.
One important feature of kHYPE is its reward-accruing structure. Rather than continually increasing the number of kHYPE tokens in a wallet, staking rewards are reflected in the kHYPE-to-HYPE exchange rate. As rewards accumulate in the underlying staking pool, each kHYPE can represent a greater amount of HYPE.
For example, if someone receives kHYPE after depositing HYPE, their kHYPE quantity may remain unchanged while the amount of HYPE represented by those tokens changes over time.
HYPE Staking on Hyperliquid
HYPE is the native token of the Hyperliquid blockchain ecosystem. Native staking allows HYPE holders to delegate their tokens to validators and participate in securing the network while earning staking rewards.
The main difference between native staking and liquid staking is what happens to the user's position after staking. Native staking keeps the position within the staking system, while liquid staking provides a derivative token that can potentially be used in other applications.
For users who want direct exposure to validator staking, native HYPE staking is one option. For users who want staking exposure while retaining a liquid representation of their position, Kinetiq's kHYPE provides another approach.
HYPE Liquid Staking
HYPE liquid staking allows users to stake HYPE while receiving a liquid representation of their staked assets. Kinetiq is one protocol providing this functionality through kHYPE.
The major attraction of liquid staking is capital flexibility. Instead of waiting for the underlying staking position to become available before using the capital, users can potentially use the liquid staking token in supported markets, lending protocols, liquidity pools, or other DeFi applications.
However, additional DeFi utility also introduces additional risks. Smart-contract vulnerabilities, liquidity conditions, price differences between an LST and its underlying asset, validator performance, and protocol-specific risks should all be considered before depositing funds.