To achieve “deterministic solvency,” Hyperdrive introduced three architectural pillars. First, collateral is valued at its contractual net asset value (NAV). For example, a tokenized treasury redeemable for $1.05 is valued at $1.05, even if a flash crash drops its market price to 80 cents.
Second, if a position must close, the protocol initiates the asset’s native redemption process—such as T+30 or T+90 settlements—rather than selling it on the open market. Finally, borrowers can deleverage atomically for a fixed fee, bypassing the need for expensive external liquidators.
FAQ How does Hyperdrive differ from Aave and Compound? It replaces volatile oracle‑based liquidations with deterministic contractual settlements. What assets can be used as collateral? Hyperdrive values tokenized treasuries and LSTs at their contractual redemption price, not market swings. Why is this safer for borrowers? Positions close through native redemption processes instead of forced dumping into thin markets. When and where will Hyperdrive launch? Testnet is live now, with Ethereum mainnet rollout in Q2 2026 and expansion to Avalanche and Hyperliquid.
