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Kinetiq kHYPE

2.3
kHYPE / HyperEVM (Hyperliquid L1 ecosystem) / February 17, 2026
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Score Breakdown

CategoryWeightScore
Audits & Historical20%2.00
Centralization & Control30%3.30
Funds Management30%1.75
Liquidity Risk15%2.00
Operational Risk5%2.00
Final Score2.3 / 5.0
20%30%30%15%
Low Risk

Overview

Kinetiq is a liquid staking protocol for HYPE on Hyperliquid L1. Users stake HYPE and receive kHYPE, a yield-bearing liquid staking token whose redemption value appreciates from staking rewards. kHYPE uses an exchange-rate model (not rebasing) — 1 kHYPE currently represents ~2.26 HYPE.

Kinetiq routes stake through a StakingPool contract that manages validator delegation, queue-based unstaking, and fee collection. Additional products include vaultHYPE / xkHYPE and Kinetiq Markets.

Links:

Risk Summary

Key Strengths

  1. Significant TVL (~$683M) and DeFi integration (~$493M across 52 pools).
  2. 5 core audits from reputable firms (Pashov, Zenith, Code4rena, Spearbit) across 2025.
  3. Active Cantina bug bounty with $5M maximum and 294 submissions.
  4. Onchain verifiable staking economics with AccessControl role enumeration.
  5. 4-of-7 multisig governance (stronger than many DeFi protocol minimums).

Key Risks

  1. Queue-based unstake path (7 days onchain) introduces redemption delay risk.
  2. Multi-contract upgradeable proxy architecture adds integration and control-plane complexity.
  3. OPERATOR role on StakingPool held by single EOA (automated bot, not multisig-protected).
  4. No timelock on multisig — confirmed exhaustively onchain (no modules, no guard, no timelock contract). Upgrades can be executed immediately.
  5. Hyper Foundation controls 56.4% of network stake — exceeds 1/3 BFT blocking minority. Kinetiq delegates 45% of its stake to HF validators.
  6. Multisig signer independence is questionable — inter-signer funding chains, shared funders (Signers 4+7), one inactive signer (Signer 7 = 0 nonce), all appear team-associated rather than independent external parties.
  7. Contracts not open-sourced on GitHub (but verified onchain on HyperEVMScan).
  8. ~28.5M HYPE gap between EVM totalStaked (50M) and L1 actual delegated (21.5M) — needs monitoring.
  9. Legal entity ambiguity: "Kinetiq Labs" (Terms) vs "Kinetiq Research" (Privacy/GitHub) with no specific governing law jurisdiction named.

Critical Risks

  • executeEmergencyWithdrawal() and rescueToken() functions give admin significant power over funds.
Full Report

Contract Addresses

All contracts are deployed on HyperEVM (Hyperliquid L1). Explorer: HyperEVMScan.

Onchain verified contracts (have deployed bytecode):

Contract Address Type
kHYPE 0xfd739d4e423301ce9385c1fb8850539d657c296d Proxy (ERC-20 LST)
kHYPE Implementation 0xfe3216d46448efd7708435eeb851950742681975 Implementation
kHYPE ProxyAdmin 0x9c1e8db004d8158a52e83ffdc63e37eabea8304c EIP-1967 Admin
StakingPool (Minter/Burner) 0x393D0B87Ed38fc779FD9611144aE649BA6082109 Proxy
StakingPool Implementation 0x69d4c44398fc95bbe86755ea481b467fc6a09c84 Implementation
StakingPool ProxyAdmin 0x8194aa9eca9225f96a690072b22a9ad0dd064f64 EIP-1967 Admin
PauserRegistry 0x752E76ea71960Da08644614E626c9F9Ff5a50547 Proxy
PauserRegistry ProxyAdmin 0xd26c2c4a8bd4f78c64212318424ed794be120ea6 EIP-1967 Admin
Governance Multisig 0x18A82c968b992D28D4D812920eB7b4305306f8F1 Gnosis Safe (4-of-7)
Treasury Multisig 0x64bD77698Ab7C3Fd0a1F54497b228ED7a02098E3 Gnosis Safe (4-of-7)

All three ProxyAdmin contracts are owned by the Governance Multisig. The 4-of-7 multisig can upgrade all contract implementations without timelock.

How Hyperliquid Staking Works (Context)

Hyperliquid staking is validator-based. HYPE is delegated to validators, and rewards depend on validator performance and network-level staking parameters.

Important slashing context (as of February 12, 2026, per official Hyperliquid docs):

  • No automatic slashing is implemented ("There is currently no automatic slashing implemented").
  • Slashing is "reserved for provably malicious behavior such as double-signing blocks at the same round."
  • Validator penalties are jailing-only: jailed validators produce no rewards for delegators, but no principal loss occurs.
  • Validators may be jailed by peer quorum vote for inadequate latency/frequency of consensus messages.
  • Jailed validators can unjail themselves subject to onchain rate limits.
  • Self-delegation requirement: 10,000 HYPE (locked 1 year). Delegation lockup: 1 day.
  • Unstaking queue (staking → spot): 7 days. Max 5 pending withdrawals per address.
  • Governance can still change staking/penalty rules in future.

Implication for kHYPE:

  • Current tail risk is more validator-performance/liveness and queue-liquidity related than immediate automatic slash haircut.
  • Governance-introduced slashing would materially change kHYPE risk profile and should trigger reassessment.

Audits and Due Diligence Disclosures

Kinetiq hosts audit reports in a Google Drive folder (linked from https://audits.kinetiq.xyz/).

kHYPE / staking-core relevant audits (verified from Google Drive)

Date Auditor Scope Link
Mar 2025 Pashov Audit Group kHYPE LST PDF
Mar 2025 Zenith kHYPE LST PDF
Apr 2025 Code4rena kHYPE LST ($35K, 69+ wardens) Report
Jun 2025 Spearbit kHYPE LST PDF
Nov 2025 Pashov Audit Group kHYPE instant unstake PDF

Broader protocol audits (additional context)

Date Auditor Scope Link
Nov 2025 Spearbit kmHYPE PDF
Nov 2025 Zenith kmHYPE PDF
Jan 2026 Spearbit skNTQ PDF

Architecture complexity: high-moderate. kHYPE relies on multiple upgradeable proxy contracts (kHYPE token, StakingPool, PauserRegistry), which increases integration/control-plane risk compared to single-contract wrappers.

Bug Bounty

Historical Track Record

  • Listed on DeFiLlama since July 17, 2025 (~7 months at assessment date).
  • Current TVL: ~$683M (February 2026, per DeFiLlama).
  • Peak TVL: ~$2.65B (October 4, 2025).
  • TVL trend: Significant decline from peak, currently at ~26% of ATH. Likely driven by broader HYPE price movements.
  • CoinGecko market data: kHYPE price $29.73, market cap ~$657M, 24h volume ~$12.8M. ATH $59.44 on September 18, 2025.
  • totalSupply (onchain): 22,104,091.53 kHYPE.
  • No Kinetiq entry found in DeFiLlama Hacks database or Rekt News.
  • Shorter operating history and evolving module set (kHYPE + xkHYPE/skHYPE/kmHYPE) imply higher change risk.

Funds Management

kHYPE manages deposited HYPE through a StakingPool contract and validator delegation, not a passive 1:1 wrapper.

Accessibility

  • Minting via stake flow is permissionless through app/contract path (whitelistEnabled() = false onchain).
  • Unstaking is queue-based, not instant.
  • Onchain verified unstaking parameters:
    • withdrawalDelay(): 604,800 seconds = 7 days exact
    • unstakeFeeRate(): 10 (0.10% in basis points)
    • withdrawalPaused(): false
    • stakingPaused(): false

Collateralization

Onchain state (verified February 12, 2026):

  • kHYPE totalSupply: 22,104,091.53 kHYPE
  • StakingPool totalStaked: 50,013,410.11 HYPE
  • Implied exchange rate: 1 kHYPE = 2.2626 HYPE
  • StakingPool liquid HYPE: 203,958.26 HYPE (0.41% of totalStaked held as liquid buffer)
  • StakingPool kHYPE held: 960,784.91 kHYPE
  • totalQueuedWithdrawals: 971,460.09 HYPE
  • totalClaimed: 27,987,503.62 HYPE

Economic backing is staked HYPE plus liquid reserves. Backing quality is primarily dependent on Hyperliquid validator set quality and staking outcomes. No offchain custodial reserve model is disclosed for core kHYPE backing.

Provability

  • Core staking and token accounting are onchain.
  • All core contracts (kHYPE, StakingPool, PauserRegistry and their implementations) are source-code verified on HyperEVMScan (exact match).
  • Key onchain readable functions verified: totalSupply(), totalStaked(), totalQueuedWithdrawals(), totalClaimed(), withdrawalDelay(), unstakeFeeRate().
  • Exchange rate is derived from totalStaked / totalSupply — updated via staking operations, not admin oracle.
  • Contracts use OpenZeppelin AccessControlEnumerable (verified via supportsInterface). kHYPE supports EIP-2612 Permit.
  • kHYPE is not ERC4626 (convertToAssets, totalAssets, asset all revert).

Liquidity Risk

kHYPE exit routes:

  1. Protocol unstake queue (primary deterministic exit)
  • Onchain withdrawalDelay() = 7 days
  • Fee-bearing exit path (0.10%)
  • Queue delay can expand under stress
  1. Secondary market liquidity (per DeFiLlama, February 2026)

Total DEX liquidity: ~$44M across 39 pools on HyperEVM DEXes.

Top DEX pools:

DEX Pair TVL 24h Volume
Project X WHYPE/KHYPE $8,206,746 $6,933,060
Project X USDT0/KHYPE $2,337,679 $312,037
Ramses HL WHYPE/KHYPE $281,206 $1,512,669
HyperSwap V3 WHYPE/KHYPE $268,244 $599,408

Lending protocol deposits dominate external kHYPE usage: ~$170M HyperLend, ~$215M Morpho, ~$27M Pendle. These are not exit liquidity.

All trading is DEX-based on HyperEVM. No centralized exchange listings found.

Given queue dependence and same-ecosystem DEX liquidity, kHYPE liquidity risk is materially higher than WHYPE but better than stHYPE (which has ~$403K DEX depth vs kHYPE's $44M).

Centralization & Control Risks

Governance

Onchain verified governance data:

  • Multisig address: Governance Multisig (Gnosis Safe on HyperEVM)
  • Threshold: 4-of-7 (verified via getThreshold())
  • Version: 1.3.0
  • Nonce: 32 transactions executed
  • Timelock: None. Exhaustive onchain verification confirmed no timelock exists — Safe has no modules (getModulesPaginated returns empty), no guard (storage slot 0x4a204f... is zero), all three ProxyAdmins are standard OpenZeppelin (881 bytes, owned directly by multisig), and no EnabledModule events have ever been emitted.
  • Signer identities: All 7 signers are pseudonymous.

Role structure (verified via AccessControlEnumerable):

Contract Role Holder
kHYPE DEFAULT_ADMIN Governance Multisig (4/7)
kHYPE MINTER StakingPool
kHYPE BURNER StakingPool
StakingPool DEFAULT_ADMIN Governance Multisig (4/7)
StakingPool MANAGER Governance Multisig (4/7)
StakingPool OPERATOR OPERATOR EOA
PauserRegistry DEFAULT_ADMIN Governance Multisig (4/7)

Key concern: The OPERATOR role on the StakingPool is held by a single EOA (OPERATOR EOA), not the multisig. This address is a Kinetiq automated bot (6,421 nonce) that calls generatePerformance() and updateValidatorMetrics() on a regular basis.

Programmability

  • Hybrid onchain system with multiple upgradeable proxy contracts.
  • Exchange rate is derived from onchain state (totalStaked / totalSupply), not admin-set.
  • StakingPool has significant admin functions: pauseWithdrawal(), pauseStaking(), setWithdrawalDelay(), setUnstakeFeeRate(), executeEmergencyWithdrawal(), rescueToken().
  • Emergency withdrawal and token rescue capabilities exist — powerful admin functions.

External Dependencies

Critical dependencies:

  1. Hyperliquid L1 consensus/liveness.
  2. Hyperliquid validator performance and staking/slashing rules.
  3. HyperEVM execution environment.
  4. DEX liquidity conditions for kHYPE/HYPE exits.

Dependency concentration on Hyperliquid ecosystem is structurally high. HyperEVM is NOT a separate chain — it shares the same HyperBFT consensus as HyperCore. There is no bridge risk between HyperCore and HyperEVM; the risk is pure L1 liveness.

Important: Hyperliquid is a highly centralized chain — Hyper Foundation controls 56.4% of validator stake via 5 validators, exceeding the 1/3 BFT blocking minority. HYPE staking cannot be considered as safe as ETH staking, where validator set decentralization is significantly stronger (~1M validators, no single entity near blocking minority). This centralization risk is inherited by kHYPE and should be weighed accordingly.

Hyperliquid Validator Set Dependency (Quantified)

Source: Hyperliquid L1 API (POST https://api.hyperliquid.xyz/info)

Verify validator data: Hyperliquid Staking Portal | Validator Performance | HypurrScan Staking

Network overview (February 2026):

Metric Value
Total validators 30 (24 active, 5 jailed, 1 inactive)
Total network stake 436.2M HYPE
Active stake 431.9M HYPE
Jailed stake 4.3M HYPE (0.99%)

Concentration risk:

  • Hyper Foundation operates 5 validators controlling 56.4% of active stake (243.4M HYPE). This exceeds the 1/3 blocking minority for BFT consensus.
  • Top 5 validators (4 HF + Anchorage) = 60.1% of active stake.
  • Top 10 validators = 83.4% of active stake.
  • Kinetiq represents 11.5% of total network stake — the single largest protocol-level staker on Hyperliquid.

Kinetiq's delegation strategy:

  • ValidatorManager has 22 pre-approved validators registered; 9 receive active delegations.
  • StakeHub autonomously scores and delegates via algorithmic selection.
  • Total L1 delegated: 21.5M HYPE (vs 50.0M totalStaked on EVM — the ~28.5M gap is likely undelegated buffer or unstaking queue).
Validator Delegation (HYPE) % of Kinetiq Lock Status
Kinetiq x Hyperion (own) 6,003,900 27.9% Locked
Hyper Foundation 1-5 (×4) 1,936,320 each 9.0% each (45.0% total) Unlocked
infinitefield.xyz 1,936,320 9.0% Unlocked
Hypurrscanning 1,936,320 9.0% Unlocked
Nansen x HypurrCollective 1,936,320 9.0% Unlocked
  • Delegation HHI: 1,429 (competitive range, below 1,500 threshold).
  • 45.0% of Kinetiq delegations go to Hyper Foundation validators; 55.0% to non-HF validators.
  • All delegated validators have 99.9-100% uptime and APR in the 2.16-2.25% range.
  • Zero exposure to currently jailed validators.

Slashing/jailing context:

  • No automatic slashing is implemented on Hyperliquid (per official docs). However, slashing may be enforced in the future and must be considered a forward-looking risk if Kinetiq delegates to validators that suffer a slashing event (per Kinetiq risk disclosures).
  • Jailing = reward cessation only, no principal loss. Jailed validators visible on Hyperliquid Staking Portal.
  • Validators can be jailed by peer vote for latency/responsiveness issues (see validator prison docs).
  • Unstaking queue from L1 validators: 7 days.

L1 incident history: No Hyperliquid L1 consensus or liveness incidents found in the DeFiLlama hacks database. Three HyperEVM application-level exploits were recorded (HyperVault $3.6M rugpull, Hyperdrive $773K router exploit, Raga Finance $18.5K exploit) — none affecting L1 itself.

Operational Risk

  • Audit depth is reasonable for protocol age (5 core audits from 4 firms).
  • Bug bounty at $5M max is strong and has 294 submissions.
  • Team/legal entity: Two entity names are used inconsistently — "Kinetiq Labs" (Terms of Use) vs "Kinetiq Research" (Privacy Policy, GitHub org, footer copyright). GitHub org lists Singapore as location; Privacy Policy references Panama for data transfers. Terms of Use do not name a governing law jurisdiction. No registered address or company registration number is publicly disclosed.
  • Known team members (via GitHub commit history on github.com/kinetiq-research):
    • Justin Greenberg (@justingreenberg, Twitter: @greenbergz) — primary developer on f1rewall repo, PGP-signed commits.
    • GregTheDev (@0xgregthedev) — Rust/Solidity developer, primary contributor to hl-rs (Hyperliquid Rust SDK). gregthedev.eth funded governance Safe Signer 2.
    • mektigboy (@mektigboy, Twitter: @mektigboy) — self-identified "driver @kinetiq-research" in GitHub bio. Prior experience with sherlock-audit and security audit orgs.
  • Contact: security@kinetiq.xyz (with PGP key at kinetiq.xyz/.well-known/pubkey.asc), contact@kinetiq.xyz, info@kinetiq.xyz.
  • No public "About" or "Team" page exists on kinetiq.xyz or docs.kinetiq.xyz. Twitter: @Kinetiq_xyz.
  • Contracts are not open-source on GitHub — the Kinetiq GitHub org (github.com/kinetiq-research) has only SDK/utility repos, no smart contract code. However, all core contracts are source-code verified on HyperEVMScan (exact match).
  • No public formal verification disclosure found.

Monitoring

Key contracts to monitor:

1. Governance Monitoring (MANDATORY)

Monitor all privileged role actions and parameter changes for:

  • RoleGranted / RoleRevoked events on kHYPE and StakingPool (AccessControl)
  • Upgraded events on proxy contracts (implementation changes)
  • AddedOwner / RemovedOwner / ChangedThreshold on Governance Safe

Immediate alerts:

  • ownership/multisig signer changes
  • threshold changes
  • implementation upgrades
  • emergency pause activations
  • parameter changes (withdrawalDelay, unstakeFeeRate, stakingLimit)

2. Backing & Supply Monitoring (MANDATORY)

Track:

  • kHYPE.totalSupply() (currently 22.1M)
  • StakingPool.totalStaked() (currently 50.0M HYPE)
  • Implied exchange rate trend
  • StakingPool native HYPE balance (liquid buffer)

Alert thresholds:

  • backing ratio drift >1% in 24h (unless expected market event)
  • liquid buffer drops below 50K HYPE

3. Queue Health Monitoring (MANDATORY)

Track:

  • StakingPool.totalQueuedWithdrawals() (currently 971K HYPE)
  • queue size and average wait time
  • daily enqueue/dequeue flow

Alert thresholds:

  • average unstake latency >10 days sustained
  • queue size growth >30% day-over-day

4. Market Liquidity Monitoring

Track:

  • kHYPE/HYPE and kHYPE/stable liquidity depth on Project X, Ramses, HyperSwap
  • implied NAV discount/premium
  • slippage for standard notional buckets

Alert thresholds:

  • discount >2% sustained for 24h
  • liquidity depth decline >40% day-over-day

5. Hyperliquid Base Risk Monitoring

Track official Hyperliquid updates for:

  • validator jailing waves
  • staking parameter changes
  • any governance introduction of automatic validator slashing
  • chain liveness/finality incidents

Overall Risk Score: 2.3 / 5.0

Risk Tier: MEDIUM RISK

Rationale:

  • kHYPE is a well-audited LST with significant TVL ($683M) and DeFi adoption.
  • Governance is formally 4-of-7 multisig but signer independence is weak — inter-signer funding, shared funders, 1 inactive signer, all team-associated.
  • No timelock (confirmed exhaustively onchain) and powerful admin functions (emergency withdrawal, rescue).
  • Hyper Foundation controls 56.4% of network validator stake; Kinetiq delegates 45% of its stake to HF validators.
  • Liquidity is decent for an LST ($44M DEX depth) but all on HyperEVM.
  • Three identified team members via GitHub but no public team page, ambiguous legal entity (Labs vs Research), no specified governing jurisdiction.

Reassessment Triggers

  • Time-based: Reassess in 3 months
  • TVL-based: Reassess if TVL changes by more than 50%
  1. Any Hyperliquid staking governance change that introduces automatic validator slashing.
  2. Any kHYPE exploit or emergency pause activation.
  3. Unstake queue latency >10 days sustained for >72h.
  4. kHYPE discount >3% sustained for >24h.
  5. Any privileged role threshold reduction or owner structure downgrade.
  6. Major contract migration or implementation upgrade.
  7. OPERATOR EOA change or role reassignment.
  8. Timelock implementation (positive trigger — would warrant score improvement).

Sources

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