4.6 - Moonmath - LP Rewards
This page is a model, not a promise. It’s here to explain structure — how Nest’s design can turn LP emissions into compounding alignment that can outgrow impermanent loss over time.
Crypto is volatile. Outcomes depend on adoption, trading volume, emissions, HYPE performance, and market conditions.
The problem: early-chain LPing is hard
On a new chain, the upside is massive — but early markets are volatile and liquidity is thin. That makes LPing challenging because:
price trends create impermanent loss (IL)
tight ranges can go inactive
fees alone often don’t scale fast enough to offset IL on typical DEXs
Nest is designed to solve this by giving LPs an “anti-IL toolkit”: emissions → veNEST → fee value → HEV → MEGAHYPE.
Assumptions (example only)
We’ll model a single scenario:
Initial position: $10,000 LP in a HYPE / USD-style pair
Pool type: Concentrated liquidity (±10% range)
Emissions APR: 150% (example)
HYPE appreciation: 20% per year (example)
NEST price: $0.004 (held constant for simplicity)
Annualized DEX rewards: $2.6M (example macro assumption)
IL progression (example estimate)
Based on a ±10% range and a trending asset:
Year 1: 18.5%
Year 2: 34.8%
Year 3: 49.1%
Point: if you only LP and do nothing else, your LP position can shrink over time even if HYPE is up — especially in tight ranges.
This is why what you do with emissions matters.
Behaviour A — Sell rewards (linear)
You take emissions as cashflow.
Example year 1
LP value after IL: ~$9,000
Emissions earned: ~$15,000
Emissions sold: ~$15,000
Total: ~$24,000 → ~140% return
What this path is
strong short-term cashflow
no compounding
no growing governance share
no Engine access
Lowest effort, lowest upside.
Behaviour B — Lock & compound into veNEST (exponential)
Same LP, same emissions — but instead of selling, you lock emissions into veNEST.
What changes
veNEST earns the fee-value side (100% of trading fee value allocation)
voting power grows as you keep locking
your share of future value flows can scale faster
Illustrative year 1
LP after IL: ~$9,000
Emissions locked: ~$15,000
Fee-value earned via veNEST: ~$6,000
Total: ~$30,000 → ~200% return
This is where compounding starts to dominate IL.
Behaviour C — HEV route (amplified compounding + MEGAHYPE)
Now deposit veNEST into HEV instead of managing votes manually.
What HEV does (conceptually)
auto-votes (hands-off)
prevents “lazy decay” behavior
routes a portion of fee value into the HYPE Engine path
distributes MEGAHYPE (treasury-backed amplified HYPE exposure)
Illustrative year 1 If veNEST fee-derived value would normally be ~$6,000, assume HEV improves effective compounding:
Conservative amplification (~2×): fee-derived value ~$12,000 → total ~$36,000+ (~260% return)
Stronger alignment (~3×): fee-derived value ~$18,000 → total ~$42,000+ (~320% return)
These numbers come from structure and compounding, not liquidation leverage.
Why this can outgrow IL over time
By year 2–3 (in this framework):
veNEST controls more vote weight
fee-value share increases
rewards stack on rewards
IL becomes relatively smaller compared to the growing “outside-the-pool” reward streams
This is the core Nest thesis:
on typical AMMs, you fight IL with fees
on Nest, you fight IL with emissions + governance compounding + fee value + Engine effects
Long-term aligned users are structurally favored.
Who this strategy is for (and who it isn’t)
Best suited for users who:
are bullish on Hyperliquid / HyperEVM long-term
can tolerate volatility
can tolerate lockups (with optional secondary market liquidity depending on venue)
want compounding, not quick flips
Not ideal if you need:
short-term liquidity
predictable returns
zero volatility
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