> For the complete documentation index, see [llms.txt](https://docs.valantis.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.valantis.xyz/prime/discounts/strategies/looped-basis.md).

# Run the Looped Basis Trade

Combine a looped wstHYPE spot leg with a 1x HYPE perp short.

<figure><img src="https://986147118-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F1hNJeG4CApeBcE2NlR61%2Fuploads%2Fgit-blob-13189dd435ab4481c942961b3b54fa403be16719%2Fimage.png?alt=media" alt=""><figcaption></figcaption></figure>

The trade earns:

1. Levered stHYPE staking spread.
2. Funding paid to the HYPE perp short when funding is positive.
3. Lower rebalance fees from the Prime staking tier.

## Mechanics

1. Supply wstHYPE to HyperLend e-mode.
2. Borrow HYPE against it.
3. Restake the borrowed HYPE and repeat to the chosen loop multiple.
4. Short HYPE perps equal to the strategy's **net equity**, not gross loop exposure.

Borrowed HYPE offsets the added spot HYPE, so the loop's net HYPE delta stays approximately 1x equity regardless of the loop multiple.

## Illustrative carry

Inputs as of July 15, 2026: 2.4% normal stHYPE yield, 0.97% WHYPE borrow rate, and 11.23% trailing-30-day HYPE funding.

| Structure | Staking spread on loop equity | Funding on 1x hedge | Carry on loop equity | Approx. carry on total capital with 3x perp margin |
| --------- | ----------------------------: | ------------------: | -------------------: | -------------------------------------------------: |
| No loop   |                          2.4% |               11.2% |                13.6% |                                              10.2% |
| 2x loop   |                          3.8% |               11.2% |                15.1% |                                              11.3% |
| 4.5x loop |                          7.4% |               11.2% |                18.6% |                                              14.0% |

Historical funding and current borrow rates are not forecasts. HyperLend's one-click HyperLoop also charges a one-time 0.04% flashloan fee on the looped amount.

## When it fits

* You already run spot/perp basis and actively rebalance it.
* You want a yielding spot leg instead of idle spot HYPE.
* You can monitor HyperLend utilization, funding, and perp margin continuously.

## Risks

* **Borrow rates:** WHYPE rates rise sharply above the utilization kink and can erase the loop spread.
* **Funding:** the short pays funding when rates turn negative.
* **Perp margin:** a HYPE rally can pressure USDC margin even while the spot leg gains.
* **Slashing:** HyperLend's exchange-rate oracle prevents DEX market-depeg liquidations, but validator slashing can reduce wstHYPE collateral value. At maximum e-mode leverage, the slashing buffer is materially smaller.
* **Contract stack:** the strategy depends on stHYPE, HyperLend, WHYPE, HyperCore transfers, and Hyperliquid perps.

DEX liquidity and the stHYPE redemption buffer usually provide an instant exit; users typically paid 1 bp and less than 3 bps over the trailing 90 days. If the buffer is unavailable, fallback unstaking completes in under 7 days.