> ## Documentation Index
> Fetch the complete documentation index at: https://docs.hyro.network/llms.txt
> Use this file to discover all available pages before exploring further.

# What is Hyro Protocol?

> Why on-chain prop trading exists, and what Hyro Protocol does differently.

Crypto prop trading lets traders manage firm capital in exchange for a share of profits. It's a real market — an estimated **\$1–2 billion per year** in evaluation fees globally. But it's broken at the seams.

## The problem

<AccordionGroup>
  <Accordion title="Refused payouts">
    Prop firms have a documented record of denying payout requests for technical rule violations after the fact. There's no on-chain proof of solvency or payout history. Disputes are private and one-sided.
  </Accordion>

  <Accordion title="Rule changes mid-evaluation">
    Challenge rules can change after a trader has paid the entry fee. Drawdown limits quietly tighten; profit targets quietly raise. The trader paid for one product and is now competing against another.
  </Accordion>

  <Accordion title="Opaque accounting">
    Traders and counterparties can't verify what positions the firm holds, who else is funded, or whether the firm is solvent. The MyForexFunds collapse of August 2023 was the canonical demonstration.
  </Accordion>

  <Accordion title="The hidden B-book conflict">
    Most prop firms pay trader profits from challenge-fee revenue, not real trading. When a trader scales, that profit becomes the firm's expense — so the firm is structurally incentivized to remove successful traders.
  </Accordion>

  <Accordion title="Capped scale">
    Funded account size is limited by the firm's balance sheet — a ceiling the firm doesn't disclose. Top traders hit a wall not because of skill, but because the firm can't underwrite further size.
  </Accordion>
</AccordionGroup>

## The answer

Hyro Protocol settles every challenge, every payout, and every LP allocation on Solana.

* **Rules are smart contracts** and cannot change mid-evaluation.
* **Performance is verifiable** in real time.
* **Payouts are automated** in USDC, each with a TXID anyone can check.
* **Funded size scales with LP demand**, not the firm's balance sheet.

Because real-capital vaults trade on real exchange order books, HyroTrader's revenue scales **with** trader success (volume rebates, protocol fees) — not against it. This is the structural difference versus traditional prop firms.

## Two products

<CardGroup cols={2}>
  <Card title="Challenge Vault" icon="trophy" href="/traders/getting-started">
    For traders without an existing track record. Pay an entry fee in USDC, trade under smart-contract rules, pass evaluation, get funded.
  </Card>

  <Card title="Direct Vault" icon="user-check" href="/managers/direct-vault-overview">
    For verified senior traders, funds, algo desks, and market makers. Track record substitutes for the challenge. Opens Phase 2 (Q1 2027).
  </Card>
</CardGroup>

## Two sides of the marketplace

| Side         | Action                                         | Result                                                                |
| ------------ | ---------------------------------------------- | --------------------------------------------------------------------- |
| **Trader**   | Manages an on-chain vault funded by LP capital | Keeps 80–90% of profits, paid on-chain in USDC                        |
| **LP**       | Deposits USDC into a vault or pool             | Earns carry on every payout the trader generates                      |
| **Protocol** | Settles state, enforces rules, drives volume   | Earns a share of performance fees, challenge fees, and volume rebates |

## Beyond prop trading

Crypto prop trading is the launch product — chosen because HyroTrader has five years of operational data to prove the model fastest. But Hyro Protocol is built as a **generalized on-chain vault primitive**. The same architecture that funds prop traders today is designed to support funds, asset managers, algorithmic trading desks, and market makers in later phases — without rebuilding the core.

<Card title="Read the full thesis in the Whitepaper" icon="file-text" href="https://hyro.network/whitepaper.pdf" horizontal>
  Market opportunity, technical architecture, token design, and the 2030 vision.
</Card>

<Info>
  This documentation is a practical guide for traders, LPs, and builders. It is **not** an offer to sell securities, a solicitation, or financial advice.
</Info>