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The kHYPE Reserve

The kHYPE Reserve is the pool of kHYPE that backs every reHYPE in existence. It is the source of stability, the source of value, and the enforcement mechanism behind the ever-increasing exchange rate.

Reserve Composition

The reserve includes:

  • kHYPE directly held by Reliq
  • kHYPE that has been lent out

Loans on Reliq are overcollateralised in reHYPE. For every 1 kHYPE lent out, more than 1 kHYPE worth of reHYPE is locked as collateral.

That means the protocol is always owed at least as much value back as it has lent out, and often more. As a result, kHYPE that is currently lent out is still counted as full economic backing for reHYPE.

Reserve Growth

Every core operation inside Reliq increases the reserve:

  • Minting: fees flow into the reserve
  • Burning: fees flow into the reserve
  • Borrowing: interest is paid upfront and routed to the reserve
  • Leverage: interest and discounted mint fee flow to the reserve
  • Liquidations: seize and burn reHYPE collateral, since the loans are over-collateralised, this increases the backing per reHYPE
More kHYPE in the reserve → higher the backing → higher the reHYPE price.