How Hypersurface Works: Under the Hood of On-Chain Covered Calls

Covered calls have long been a favorite strategy of treasuries, funds, and whales looking to earn yield on idle assets. But for individual token holders, access to this opportunity has been limited—until now.

Hypersurface changes that by democratizing covered call writing through a novel on-chain mechanism designed to deliver real-time execution, upfront yield, and full control over the timing of the sale. Here’s how it works under the hood.

Real-Time RFQ for Instant Premium

When a user sells a covered call on Hypersurface, the protocol pays out the premium immediately. This is made possible by our Request-for-Quote (RFQ) system, which prices the trade in real time and lets the user execute it at the quoted price.

Behind the scenes, our RFQ engine connects to a quote provider running a sophisticated pricing model that continuously tracks market conditions across spot and perps. The goal is to offer users a fair, competitive premium that reflects current market volatility, implied skew, and other factors—without the delay or batching common in pooled DeFi systems.

Algorithmic Hedging with Hyperliquid Perps

Once a trade is executed, Hypersurface temporarily takes on the long call exposure into its inventory pool. To manage this risk, the protocol automatically delta-hedges the exposure on-chain using Hyperliquid’s deep and fast perp markets. This hedging is done algorithmically, without user intervention, ensuring the protocol remains market-neutral while carrying open risk.

Inventory Auctions to Free Up Liquidity

Over time, Hypersurface accumulates a book of long calls from multiple users. Periodically, the protocol auctions this inventory in bulk to professional market makers—players who operate at scale but typically don’t deal with retail-sized trades. This auction process offloads risk, recycles capital, and frees up liquidity in the pool to enable more sellers to participate.

A New Layer for Structured Yield Origination

Think of Hypersurface as a structured yield origination platform: it aggregates sell-side demand from users, temporarily carries and hedges that exposure, and bridges the gap to institutional market makers. This layered approach allows individuals to access a yield opportunity that was previously locked behind OTC desks and large trading relationships.

Why This Matters

Traditional DeFi covered call protocols often pool sellers together, delay premium payouts, and rely on infrequent auctions to clear inventory. Hypersurface turns this model on its head. Thanks to its RFQ system and on-chain hedging engine, users can:

• Sell covered calls at any time

• Lock in execution and receive premiums upfront

• Avoid waiting for pooled auction outcomes

This flexibility mirrors what TradFi investors expect from options trading—and it’s now available on-chain.

In Summary

Hypersurface combines three key innovations:

1. Real-time RFQ execution with immediate payout

2. Automated delta-hedging via Hyperliquid perps

3. Inventory auctions to bridge retail flows to institutional demand

Together, these components make covered calls accessible, capital-efficient, and frictionless for individual token holders—bringing a cornerstone TradFi strategy into the decentralized era.

FAQ: How Hypersurface Works

What is a covered call?

A covered call is an options strategy where you sell the right for someone else to buy your asset at a set price (strike) in exchange for a premium, while still holding the asset until it’s sold.

How does Hypersurface pay instantly?

Our RFQ system matches your order in real time, so you receive the premium immediately instead of waiting for pooled auctions.

Why use Hyperliquid for hedging?

Hyperliquid’s perp markets offer deep liquidity and fast execution, making them ideal for automated delta-hedging on-chain.

How are risks managed?

All positions are delta-hedged, and inventory is periodically auctioned to institutional market makers to reduce exposure and free up capital.

Can anyone use Hypersurface?

Yes—whether you hold 1 token or 1,000, Hypersurface enables individual token holders to access a strategy once reserved for whales and treasuries.

How is this different from other DeFi covered call platforms?

Most rely on pooled vaults with delayed payouts. Hypersurface offers instant execution, on-chain hedging, and direct access to institutional-grade liquidity.