Implementation

HMX and CDT for Diverse Investors

The HYPERMAX HYPE treasury strategy is implemented through a dual product approach, utilizing the HMX governance token and Convertible Debt Tokens (CDT). This strategy allows HYPERMAX to cater to a broad spectrum of investors, from conservative yield-seekers to those looking for leveraged exposure to the protocol's growth.

Our approach directly adapts MicroStrategy's playbook, where they use the high returns and volatility of Bitcoin as an input to offer a range of securities (like stock, convertible bonds, and preferred stocks) that present different risk and return profiles to the capital markets. Similarly, HYPERMAX leverages the unique economics of HYPE to create tailored investment vehicles.

1. Convertible Debt Tokens (CDT)

Target Investor

• CDTs are designed to appeal to conservative investors who seek structured upside potential with built-in downside protection. They offer a more stable exposure compared to direct token speculation.

Structure and Features

• CDTs are bearer's assets, meaning ownership is verifiable on-chain.

• They typically offer a 0-5% coupon with an 18-month maturity and a 25-35% conversion premium.

• Minted and redeemed exclusively by Authorized Participants (APs), drawing inspiration from the Ethena model.

• Transparent collateralization is ensured through onchain monitoring.

Liquidity and Accessibility

• CDTs are designed for global accessibility, avoiding the traditional $100,000+ minimums often found in similar financial products.

• They provide real-time liquidity through trading on Concentrated Liquidity AMM (CLMM) pools, enabling continuous price discovery.

• The atomic conversion mechanisms eliminate settlement complexity.

Exit Strategies

CDT holders can exit in three ways:

• Secondary market trading on AMM from day one

• Redemption for principal + interest on maturity

• Conversion to HMX token

2. HMX Governance Token

Target Investor

• HMX targets speculators who desire leveraged exposure to the improvement of the HYPE/HMX ratio. This directly mirrors MicroStrategy's objective of increasing its BTC holdings per share over time.

Supply and Distribution

• The initial supply is 1 billion HMX tokens. The distribution includes 10% for the initial raise, 80% allocated to the treasury for future protocol expansion, 5% for the team (with a 3-year vest), 2.5% for strategic investors, and 2.5% for a DELTA airdrop.

Governance Utility

• HMX tokens empower holders to participate in crucial protocol decisions through voting, including:

  • Setting debt ratios for the treasury.

  • Approving new vault listings and integrations.

  • Determining fee tiers.

  • Participating in HIP-3 market bids.

  • Holders can lock their HMX as veHMX (max 2 year lock) to boost their voting power and share in protocol fees.

Value Accrual Mechanism

The core value accrual for HMX holders is tied to the HYPE/HMX ratio growth, driven by:

• Convertible Debt Token issuance powered by outstanding HMX protocol equity

• Fees generated across the HYPERMAX ecosystem (e.g., from SmartFund management/performance fees, CLMM trading fees, lending market spreads).

• Actively utilzing HMX in protocol treasury based on market conditions to "issue at the market"

Product Strategy Benefits

This dual product approach allows HYPERMAX to effectively capture multiple investor segments, creating a flywheel effect where both products contribute to and drive overall protocol growth and value accrual. The vertically integrated nature of HYPERMAX, including SmartFunds, a Concentrated Liquidity AMM (CLMM), a Lending Market, and xUSD, further enhances the capital efficiency and utility within the ecosystem.