What an instant exit from a seven-day queue should cost

A staked token can be redeemed for the asset beneath it, but not at once. On Hyperliquid, moving HYPE out of staking takes seven days. A holder who wants out today has one alternative: sell the staked token to someone prepared to do the waiting. That buyer redeems the token, receives the full amount a week later, and keeps the difference.

This note sets out how we priced that service when designing a marketplace for liquid staking tokens. The trade carries no view on the price of HYPE. The buyer is paid for time.

The fee has a floor: the cost of waiting

Capital in a redemption queue could have been earning elsewhere. The fee has to beat what the same capital would earn over the same period at similar risk. In mid-2025 the two obvious comparisons for HYPE were these.

Rates on HyperEVM lending markets and Hyperliquid staking in mid-2025. One basis point (bp) is 0.01%.

Lending is the fairer benchmark, because lent HYPE can usually be withdrawn at any time. A provider who buys staked HYPE for a fee of 1.4 bps and redeems it has already done better than a week of lending. Staking marks a rough ceiling. To earn its 4.2 bps a holder must stake for seven days and then queue for seven more, so the capital is tied up for fourteen. A fee anywhere between about 1.4 and 4.3 bps pays the provider more than either alternative.

A pool gets its capital back sooner

That arithmetic assumes the provider waits the full seven days. A market maker working alone on an order book does. A pool usually does not, and the reason is who else trades with it.

People who want to stake HYPE can buy the staked token from the pool at the same rate the staking contract would give them. Each purchase hands the pool HYPE and takes staked tokens off its books, which is the result redemption would have produced a week later. In normal conditions the pool we studied received more HYPE this way than it received staked tokens from sellers, and a position was typically replaced within hours.

That changes the price of the service. If a provider’s capital comes back in one day, lending over the same day would have paid about 0.2 bps. A fee of 1 bp is then five times the alternative. One firm running the same strategy on an order book needs a higher fee to break even, because it has no stream of new stakers to sell to.

The pool never sells below redemption value

An ordinary stable-pair pool rebalances by selling the staked token cheaply when it holds too much. The provider takes that loss, and it rarely shows in a quoted yield, which counts fees and leaves out the discount.

The marketplace reads the redemption rate from the staking protocol and prices the staked token at that rate. Sellers pay a fee on top. Buyers pay no fee, since their trade is the one that rebalances the pool. When buyers are scarce, the pool redeems through the protocol’s own withdrawal process and receives full value after the wait.

The fee is a schedule of steps that rises as the pool’s liquid HYPE falls, because each further sale makes a trip through the queue more likely. The note on pricing signals covers how the steps are set.

Leaving while part of the position is still queued

Suppose a fifth of the pool’s assets are in the redemption queue and a provider wants to withdraw. Their share of the liquid four-fifths is paid at once, with no fee. For the rest they choose. They can wait for the queue and receive full value, or sell that part to the pool at the fee any seller of the staked token pays, provided the pool holds enough liquid HYPE to buy it.

A solo market maker has no such choice. Withdrawal requests cannot be cancelled, and there is no liquid market for a half-finished one. Because the pool’s providers arrive and leave at different times, the pool is that market for its own members. Capital that could not accept a hard seven-day lock can take part.

Idle reserves are lent

HYPE waiting in the pool for the next seller is supplied to a lending market. The benchmark a provider gives up by joining is the lending rate, and the pool earns roughly that rate on idle reserves anyway. The opportunity cost falls towards zero, which is a second reason the fee can be low.

Where the design is exposed

• One-sided selling. In volatile weeks far more staked tokens arrive than HYPE. The pool then has to queue, and fees rise to pay for the wait. In the volatile weeks we observed, fees went above 5 bps.
• Lending liquidity. If the lending market is fully borrowed, lent HYPE cannot be recalled until borrowers repay.
• The queue itself. Seven days is Hyperliquid’s figure for unstaking. A staking token’s own withdrawal process can take longer under stress.
• Instant exit is conditional. A provider can sell a queued position to the pool only while the pool has the liquid HYPE to pay for it.

The next step: first call on new stake

The pool rebalances fastest when new stake reaches it before anything else. A staking protocol could route incoming stake to the pool first, then to its own withdrawal queue, then to validators. In our models, ordinary withdrawals still completed within seven days, and the pool was repaid in about an hour under normal conditions. This is a design direction. It has not been deployed.