> For the complete documentation index, see [llms.txt](https://docs.hyperlend.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.hyperlend.finance/architecture/liquid-perpetual-positions.md).

# Liquid Perpetual Positions

Liquid Perpetual Positions will be a financial service enabled by HyperLend.

It will allow you to open a leveraged position on the EVM while being able to use it as collateral in our isolated pools section.

At the begining you will be able to open a position with USDC (eventually other assets as well) which then transfers it to Hyperliquid L1 exchange, where it's used as a margin to open a futures position. Profits (or losses) + funding fees are accrued to the user.

To redeem the underlying USDC, shares are burned, a proportional portion of the position is closed and USDC is transferred back to the vault where it can be claimed.

`sharePrice = (perpPositionMargin + PnL + fundingFees) / totalShares`

If the futures position is losing money, the share price declines (and if the position is profitable, the share price increases).

**Behind the scene;** They are a type of ERC-4626 vaults that allows users to use their Hyperliquid perpetual futures positions as collateral on HyperLend.

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### Yield-Bearing Perpetuals

**In short;** it means you will be earning yield by using your perpatual position as collateral (+funding fees).

? **How** - you open a position, get token shares in return representing that position and use it in our Isolated pools as collateral and then use that collateral in the ecosystem.

#### **Concrete Example with theoretical numbers:**

* Open a **2x leveraged BTC-perp** (for a total notional size of **2,000,000 USDC** using **1,000,000 USDC of margin**) for **1 month**.
* Over one month, your position generates a **profit of 150,000 USDC** and **40,000 USDC in funding fees** — raising your vault balance to **1,190,000 USDC**.
* **You put the token shares into our Isolated pools and borrow 200,000 USDC** (10% LTV) and **deposit that into a HLP (Hyperliquid Provider Vault)** earning \~20% APR, which yields **\~3,333 USDC** over the same period.
* **Total profit: 193,333 USDC** = 190,000 USDC (trade + funding gains) + 3,333 USDC (vault yield from borrowed capital)

> While holding a leveraged perp position, you used your token shares as collateral to earn an additional **3,333 USDC** without risking extra capital.

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### **Use Cases:**

1. **Yield-on-Margin:** Profitable positions that users don’t want to touch (to avoid liquidation risk) can be borrowed against. Funds borrowed can earn yield elsewhere without adjusting the margin, capturing *additional yield*.
2. **Basis Trade Leverage:** Basis trades often hit a cap due to rebalancing and risk management, by looping capital from one leg (e.g. taking a loan against the long), you can amplify returns without disturbing hedged structure.
3. **Delta-Neutral Risk Transfer:** Liquidators or hedgers can **atomically buy a short position** to offset directional risk, perp positions as transferable tokens make them tradable in secondary venues—less reliance on on-book execution.
4. **MM Strategy Vaults:** Market makers could tokenise their perp inventory, retail-facing platforms or originators route trades to these tokenised perps instead of public book, vaults can be created to take part in order flow PnL from MMs.