Kinetiq is a non-custodial liquid staking protocol built natively on Hyperliquid that allows users to stake HYPE tokens and receive kHYPE—a yield-bearing liquid staking token usable across DeFi while earning validator rewards. Launched on July 15, 2025, Kinetiq experienced explosive growth from $458 million TVL in mid-July to over $2.1 billion by September 2025, driven by its kPoints airdrop campaign and integration with protocols like Pendle. As of Q4 2025, the protocol maintains approximately $582.6 million in TVL, representing a significant portion of staked HYPE on the Hyperliquid network.
The protocol solves the liquidity lock-up problem inherent to native HYPE staking, where users face an 8-9 day withdrawal delay and cannot use their assets in DeFi strategies. By issuing kHYPE tokens that automatically accrue staking rewards through an increasing exchange rate (similar to Lido's stETH model), Kinetiq enables users to maintain liquidity, earn the base staking yield of approximately 2.2-2.4% APY, and deploy capital into additional yield strategies across HyperEVM-based DeFi protocols.
Kinetiq stands out through its autonomous StakeHub validator management system, which continuously scores and delegates stake to the top-performing validators on Hyperliquid based on reliability, security, economics, governance participation, and longevity metrics. The protocol has undergone security audits from four independent firms—Spearbit, Pashov Audit Group, Zenith, and Code4rena—and maintains a public bug bounty program on Cantina. Integration partnerships include Pendle for yield tokenization, HyperLend for borrowing against kHYPE, and various DEXs for instant liquidity swaps.
Key Features and Capabilities
What makes Kinetiq's liquid staking different from native HYPE staking?
- kHYPE liquid staking token: Users receive kHYPE that automatically increases in value relative to HYPE as validator rewards accrue, eliminating the need to claim rewards manually. The token quantity remains constant while redemption value grows over time.
- StakeHub autonomous validator management: Proprietary scoring system (0-100 scale) evaluates validators across five categories and automatically rebalances stake to top performers, removing the need for users to research or select validators manually.
- Immediate earning with no lock-up: Rewards begin accruing instantly upon staking, and kHYPE remains liquid for trading or DeFi use throughout the holding period, unlike native staking which locks tokens for 8-9 days on withdrawal.
- Earn Vault for passive strategies: Managed by Seven Seas Capital (part of Veda Labs with $3.7 billion AUM), the vault automatically deploys kHYPE into optimized HyperEVM yield strategies with 20% performance fees on profits only.
- Institutional solution (iHYPE): Enterprise-grade liquid staking with SOC 2 Type I and Type II certified infrastructure provided by Pier Two, featuring dedicated validator support and compliance frameworks.
- DeFi composability: kHYPE integrates with Pendle for yield trading (PT/YT token splits), HyperLend for collateralized borrowing, and multiple DEXs on HyperCore and HyperEVM for instant swaps.
- kPoints rewards program: Weekly distribution of 800,000 kPoints (snapshots every Tuesday, distributions every Thursday) for kHYPE holders, with enhanced rewards for Earn Vault participants.
How does Kinetiq compare to Lido?
Lido dominates Ethereum liquid staking with $31.3 billion TVL (76% market share) and offers 3.6% APR with a 10% fee split between node operators and the DAO treasury. Kinetiq takes no immediate cut on base staking rewards, passing through the full 2.2-2.4% HYPE staking yield to users. While Lido supports multiple chains (Ethereum, Solana, Polygon) with established DeFi integrations across hundreds of protocols, Kinetiq is Hyperliquid-native with emerging HyperEVM integrations. Lido's stETH has deeper liquidity and broader acceptance as collateral, whereas kHYPE offers growth exposure to Hyperliquid's expanding DeFi ecosystem. Users prioritizing maximum liquidity and integration breadth should choose Lido for Ethereum staking, while those aligned with Hyperliquid's derivatives-focused L1 and seeking exposure to a newer ecosystem benefit from Kinetiq's native integration and competitive fee structure.
How It Works: User Experience
Users connect a compatible wallet (MetaMask, Rabby, or any HyperEVM-compatible wallet) to kinetiq.xyz and deposit a minimum of 5 HYPE tokens to receive kHYPE at the current exchange rate. For amounts under 5 HYPE, users can swap HYPE to kHYPE directly on supported DEXs instead. The exchange rate reflects accumulated validator rewards—for example, if 1 kHYPE equals 1.05 HYPE after one year, holders have earned approximately 5% yield through the appreciation. No action is required to compound rewards as the exchange rate updates automatically based on validator performance data from StakeHub.
Behind the scenes, Kinetiq's smart contracts delegate all staked HYPE to multiple validators selected by StakeHub's algorithmic scoring system, which evaluates performance metrics every 24 hours and triggers rebalancing when validators underperform or new high-scoring validators emerge. The protocol monitors validator uptime, block production consistency, commission rates, governance participation, and slashing history to calculate composite scores. Stake automatically shifts away from validators scoring below threshold levels and reallocates to top performers, ensuring optimal yield capture without manual intervention.
When users want to exit, they can either initiate a direct unstaking request (subject to 8-9 day withdrawal period and 0.10% fee in kHYPE) or swap kHYPE instantly on DEXs for immediate liquidity with market-determined pricing. Note that there is a 24-hour withdrawal delay after initial staking, meaning users cannot unstake immediately after their first deposit. During the unstaking period, kHYPE no longer accrues rewards. Users can cancel queued withdrawals by simply ignoring them, as unconfirmed kHYPE remains in the wallet.
Supported Networks and Integrations
What chains does Kinetiq support?
Primary Chain: Hyperliquid L1 - 100% of protocol TVL and native deployment. Kinetiq is built specifically for Hyperliquid's native HYPE token and operates on the Hyperliquid L1 blockchain, which uses HyperBFT consensus optimized for high-frequency derivatives trading with sub-second finality.
Secondary Chain: HyperEVM - kHYPE operates as an ERC-20 token on HyperEVM (Hyperliquid's EVM-compatible execution layer), enabling compatibility with Ethereum-based DeFi protocols deployed on Hyperliquid. Current integrations include Pendle (launched September 12, 2025 via Boros platform for yield tokenization), HyperLend (lending and borrowing), and various DEXs for spot trading.
Planned Networks: None - Kinetiq is purpose-built for the Hyperliquid ecosystem and does not support external blockchains like Ethereum, Solana, or other L1s. Users seeking multi-chain liquid staking should consider alternatives like Lido (Ethereum, Solana, Polygon) or Jito (Solana-focused with $2.4 billion TVL).
Fees and Costs: What You'll Actually Pay
How much does Kinetiq cost to use?
Platform Fees - Base Staking: 0% fee on base staking rewards. Kinetiq passes through the full HYPE validator yield (approximately 2.2-2.4% APY as of Q4 2025) to kHYPE holders without taking a cut, unlike Lido which charges 10% on staking rewards.
Platform Fees - Withdrawal: 0.10% fee charged in kHYPE when unstaking directly through the protocol. For example, unstaking 100 kHYPE costs 0.1 kHYPE ($3.90-$4.60 based on Q4 2025 pricing of $39-$46 per kHYPE). This fee can be avoided by swapping kHYPE on DEXs instead.
Platform Fees - Earn Vault: 20% performance fee on profits only, charged by Seven Seas Capital (Veda Labs). No management fees, no entry/exit fees. If the vault generates 10% APY, users net 8% after the performance fee. If the vault produces no profit, no fee is charged. As of August 2025, the first month of operation was fee-free as a promotional period.
Network Gas Fees: Hyperliquid L1 gas fees are negligible (typically $0.01-$0.05 per transaction) compared to Ethereum mainnet ($5-$50 during peak congestion). HyperEVM transactions similarly cost under $0.10 in most conditions as of Q4 2025.
Total Cost Example: Staking 1,000 HYPE (worth approximately $20,000-$25,000 at Q4 2025 prices of $20-$25 per HYPE) costs under $0.10 in gas. Unstaking directly costs 1 kHYPE withdrawal fee ($39-$46) plus minimal gas, totaling approximately $40-$50. Alternatively, swapping kHYPE on a DEX incurs 0.25-0.30% trading fees (approximately $50-$75 on a $25,000 position) plus minimal gas, offering instant liquidity at a similar cost.
Security and Audits
Is Kinetiq safe?
Kinetiq has undergone comprehensive security audits from four independent firms: Spearbit, Pashov Audit Group, Zenith, and Code4rena, with the most recent audit completed in Q2 2025 prior to mainnet launch. The protocol maintains an active public bug bounty program hosted on Cantina to incentivize ongoing security research from white-hat hackers. Smart contract architecture includes emergency pause functionality, role-based access controls limiting admin privileges, multi-signature requirements for critical functions, and a secure upgrade framework with timelocks.
The protocol employs Hypernative for real-time event monitoring and threat detection across all contract interactions. Security measures specific to validator management include slashing protection mechanisms, stake diversification across multiple validators to reduce concentration risk, and automated alerts when validators underperform or exhibit anomalous behavior. The institutional iHYPE product uses infrastructure from Pier Two, which holds SOC 2 Type I and Type II certifications for enterprise security standards.
Kinetiq has maintained a clean security record since launch in July 2025 with no exploits, hacks, or loss of user funds as of November 2025. However, the protocol is relatively new (operational for approximately 4 months) compared to established liquid staking protocols like Lido (launched December 2020) or Rocket Pool (launched November 2021), which have multi-year track records. Users should consider this shorter operational history when assessing risk, particularly given that most DeFi exploits occur within the first 6-12 months of protocol launch.
While Hyperliquid currently has no slashing mechanism implemented, the network documentation indicates slashing may be enforced in the future. If implemented, validators that violate network rules could have staked HYPE penalized, creating potential loss risk for Kinetiq users. The StakeHub system is designed to mitigate this risk by monitoring validator behavior and reallocating stake away from high-risk validators before slashing events occur, though this protection depends on the system's ability to predict and react to validator issues faster than the network can impose penalties.
Use Cases: Who Should Use This Platform
DeFi Power Users Seeking Capital Efficiency
Kinetiq excels for users actively deploying capital across multiple HyperEVM protocols who want to earn base staking yield without sacrificing liquidity. Traders holding $10,000+ in HYPE who use lending markets, yield aggregators, or derivatives platforms benefit from using kHYPE as liquid collateral while capturing the 2.2-2.4% base yield. For example, a user can stake $50,000 HYPE to receive kHYPE, earn staking rewards passively, deposit kHYPE into HyperLend to borrow against it at 60% LTV, and deploy borrowed funds into leveraged yield farming strategies on Pendle—effectively creating 2-3 layers of yield on the same capital base.
Hyperliquid Ecosystem Believers
Users bullish on Hyperliquid's long-term growth who want exposure to validator rewards without locking liquidity should use Kinetiq as their default HYPE holding strategy. Native staking requires selecting validators manually, monitoring their performance, and accepting 8-9 day withdrawal delays that prevent participation in time-sensitive opportunities. Kinetiq automates validator selection through StakeHub, maintains instant exit liquidity via DEX swaps, and positions users to receive kPoints for the eventual Kinetiq governance token airdrop. Users holding HYPE for 6+ months gain more value from Kinetiq's compounding rewards and DeFi utility than from native staking or holding unstaked HYPE.
Conservative Yield Seekers Using the Earn Vault
Users wanting passive yield exposure without active DeFi management should deposit kHYPE into Kinetiq's Earn Vault managed by Seven Seas Capital. The vault earned users net APY ranging from 5-12% during Q3 2025 (post-fee) by automatically deploying kHYPE into optimized strategies across HyperEVM protocols. This suits users with $5,000-$100,000 who prefer set-it-and-forget-it exposure over manual strategy management. The 20% performance fee aligns incentives—the vault manager only profits when users profit—and eliminates the need to research individual protocols, manage multiple positions, or rebalance manually.
Institutional Allocators Needing Compliance
Institutions, DAOs, and funds managing $1 million+ in HYPE should use Kinetiq's iHYPE product, which provides institutional-grade liquid staking with SOC 2 certified infrastructure, dedicated validator support, and compliance frameworks suitable for regulated entities. Traditional native staking presents custody challenges and operational overhead for institutions, while iHYPE offers liquid tokenization with enterprise security standards. Contact the Kinetiq team directly for institutional onboarding and custom validator arrangements.
Risks to Consider
What are the risks of using Kinetiq?
Smart Contract Risk remains the primary concern for any DeFi protocol, particularly newer ones with limited operational history. While Kinetiq has undergone four independent audits from reputable firms (Spearbit, Pashov, Zenith, Code4rena), the protocol launched only in July 2025 and has approximately 4 months of production history as of November 2025. Most smart contract exploits occur within the first year of operation when edge cases and complex attack vectors emerge that auditors did not anticipate. Users should only deposit amounts they can afford to lose and consider that the protocol's security assumptions have not been tested through multiple market cycles, major network upgrades, or extended periods of high stress.
Validator and Slashing Risk represents a future concern specific to Hyperliquid's staking model. While the network currently has no slashing mechanism, official documentation indicates slashing may be implemented in future upgrades to penalize validators that produce invalid blocks, maintain poor uptime, or violate consensus rules. If slashing is activated, Kinetiq users could suffer losses if StakeHub allocates stake to validators that subsequently get slashed. The protocol attempts to mitigate this through continuous monitoring and rapid rebalancing, but cannot eliminate risk entirely—particularly if a high-scoring validator suddenly experiences a critical failure or malicious behavior between monitoring intervals.
Liquidity Risk affects users' ability to exit positions instantly at fair prices. While kHYPE can be swapped on DEXs for immediate liquidity, the trading pairs may have limited depth (typically $5-$20 million in liquidity across major pairs as of Q4 2025), creating slippage for larger trades. Users attempting to swap $500,000+ in kHYPE may experience 1-3% slippage or need to split trades across multiple venues and time windows. During periods of market stress or high redemption demand, DEX liquidity could dry up temporarily, forcing users to either accept unfavorable pricing or wait through the 8-9 day direct unstaking process. This risk is higher for kHYPE than for established liquid staking tokens like stETH, which maintains billions in DEX liquidity.
Exchange Rate Depeg Risk occurs if kHYPE trades below its fair redemption value relative to HYPE. In efficient markets, 1 kHYPE should trade at or slightly above its redeemable HYPE value (accounting for accumulated rewards). However, during sell pressure, fear-driven exits, or if users perceive smart contract risk, kHYPE could trade at a discount of 2-5% below fair value on DEXs. This means users exiting via swap rather than direct unstaking might receive less value than their pro-rata share of staked HYPE. The discount typically corrects as arbitrageurs buy discounted kHYPE to redeem at full value, but corrections can take hours to days during severe volatility.
Centralization Risk stems from the protocol's admin controls and upgrade mechanisms. While Kinetiq uses multi-signature wallets and role-based access controls, the protocol maintains emergency pause functionality and upgrade capabilities that could theoretically be misused by compromised admin keys or malicious insiders. Users depend on the Kinetiq team's operational security and governance decisions, particularly regarding StakeHub parameter adjustments, fee changes, and validator whitelisting criteria. The protocol has not yet transitioned to full decentralized governance with token-holder voting as of Q4 2025.
Regulatory Risk may emerge as liquid staking attracts increased scrutiny from financial regulators concerned about staking-as-a-service models potentially qualifying as securities or investment contracts under existing frameworks. While Kinetiq operates non-custodially and users retain control of their private keys, regulatory actions against liquid staking protocols in major jurisdictions could impact kHYPE's utility, DeFi integrations, or the protocol's ability to operate. Users in the United States, European Union, or other jurisdictions with active crypto enforcement should monitor regulatory developments affecting liquid staking protocols.