Skip to main content

Coin Compounding

Coin Compounding lets you use HYPE you already own as your down payment (instead of stablecoins) to purchase more HYPE on credit. It is functionally equivalent to BNPL with a flash loan — the protocol finances the rest, and you end up with roughly 2x the HYPE you started with, all locked as collateral in a Mortgage NFT. Your collateral is automatically enrolled in the Conversion Queue. If HYPE appreciates past a trigger price, the mortgage auto-converts — your debt is forgiven in exchange for a portion of the collateral, and you keep the rest.

Step by Step​

  1. Navigate to /borrow and select the "Coin Compounding" tab (this is the default tab).

  2. Enter your deposit. Two input fields:

    • Deposit — The amount of HYPE you want to deposit as collateral. Enter this first and the borrow amount auto-calculates, or vice versa.
    • Borrow — The amount of HYPE-equivalent the protocol will lend you (denominated in the collateral token for display, but borrowed as USDX internally).

  3. Review Conversion Details. Two boxes are displayed:

    • Conversion Trigger Price — The HYPE price at which auto-conversion activates:

      triggerPrice = (1 + conversionPremium%) * amountBorrowed * 2 / collateralAmount

      For example, if you deposit 100 HYPE at $25 each and borrow $1,250 with a 50% conversion premium, the trigger price is $37.50.

    • Collateral After Conversion — How much HYPE you keep if conversion triggers:

      remaining = deposit * (1 - APR * years)

      For example, 100 HYPE at 12% APR over 3 years = ~64 HYPE remaining.

    This is the core value proposition: you started with 100 HYPE ($2,500) and ended up with ~200 HYPE locked as collateral. After conversion you keep ~64 HYPE (now worth $37.50+ each = $2,400+). You effectively doubled your exposure and captured the upside.

  4. Optionally create a Payment Plan. Toggle on/off:

    • On (default): You make 36 equal monthly payments in USDX. The UI shows total payments, monthly payment amount, and APR.
    • Off: You owe a single bullet payment at the end of the full term. No monthly obligations, but the full debt (principal + interest) is due at maturity.

  5. Set a Mortgage ID and submit (same Connect → Approve → Request Mortgage flow as BNPL).

  6. Your position is created. All purchased HYPE (your deposit + the financed amount) is locked as collateral in SubConsol, and the mortgage is automatically enrolled in the Conversion Queue.

What Happens Over Time​

Scenario A — HYPE doesn't reach the trigger price​

You make your monthly USDX payments (or the bullet payment at maturity). Once fully paid off, you redeem your Mortgage NFT on the /manage page and get all your HYPE back.

Scenario B — HYPE reaches the trigger price​

The Conversion Queue automatically processes your position. A portion of your collateral covers the remaining debt (goes to the protocol/lenders), and you keep the rest. Any remaining monthly payment obligations adjust accordingly. You end up with fewer HYPE tokens than the ~2x you had locked, but each is worth significantly more.

Key Differences from BNPL​

  • Your down payment is in HYPE rather than stablecoins — equivalent to BNPL with a flash loan
  • Both input fields are denominated in the collateral token (HYPE), not stablecoins
  • You end up with ~2x the HYPE you started with, all locked as collateral
  • Conversion is always enabled (automatic enrollment in the Conversion Queue)
  • Payment plan is optional (you can choose a bullet payment instead)