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How Huam Works

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Fund Flow

  1. Deposit: User deposits USDC to mint USDhm 1:1. Collateral held in Minter contract.
  2. Stake: User stakes USDhm into the Staking Vault, receiving sUSDhm. The corresponding USDC transfers from Minter to Collector.
  3. Deploy: Collector allocates funds to hedged LP positions across DEXs (via Adaptors) and opens corresponding hedge positions on exchanges.
  4. Earn: LP trading fees minus hedging costs flow to the Reward Manager, which releases yield to the Staking Vault—increasing the sUSDhm exchange rate.
  5. Withdraw: User unstakes sUSDhm (7-day cooldown), receives USDhm plus accumulated yield, then redeems for USDC.
Unstaked USDhm remains fully backed by USDC in the Minter contract, ensuring 1:1 redemption at any time regardless of strategy performance.

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Hedging Mechanism

Huam’s yield comes from DEX LP fees, but LP positions carry impermanent loss (IL) risk. The protocol hedges this using perpetual futures:
  1. When capital enters an LP position (e.g., ETH-USDC), the protocol gains price exposure to ETH.
  2. A short perpetual position offsets this delta, making the combined position market-neutral.
  3. As prices move, the hedge is dynamically adjusted to maintain neutrality.
The result: trading fee yield flows to stakers while price movements are neutralized. See Hedging Impermanent Loss for full methodology.