$29M Moved From Hyperliquid Vault Without User Permission

The team behind HLP0, a tokenized wrapper of the Hyperliquid HLP vault, faces backlash after redirecting $29 million of user funds to Avalanche and Arbitrum-based DeFi protocols without consent. The move, which bypassed user expectations, has sparked criticism across social media and developer forums.

HLP0's vault currently holds $40 million in TVL, with $29 million bridged to Avalanche and $11 million deployed on Arbitrum. Funds are now active on platforms like AAVE and Blackhole, according to the vault's public DeBank profile.

Hyperdrive developer Cain O'Sullivan flagged the risks of multi-sig control, noting the liquidity is no longer earning from HLP but farming yield elsewhere. Hyperdrive plans to launch its own tokenized HLP solution once native USDC becomes available on Hyperliquid's HyperEVM.

HLP0 lead developer "GigaSafu" defended the MOVE on Discord, citing Hyperliquid's native USDC integration as making the old model obsolete.