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Funding Rate Arbitrage and Creating Vaults on Hyperliquid

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What Are Vaults?

Hyperliquid Vaults serve as an exchange wallet where funds are used by an individual trader or automated market maker (Vault Leader). Anyone can deposit (Vault Depositors) in the vault and earn a share of the profits.

The Hyperliquidity Provider (HLP) vault, operated by Hyperliquid, runs market-making strategies on each trading pair. Anyone can provide liquidity for HLP and share in the P&L of the vault. HLP doesn’t collect any fees directly, and its P&L is shared proportionally based on each depositor’s share of the vault. HLP is community-owned.

Using Polkadex with Hummingbot

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Introduction

Polkadex is a state-of-the-art decentralized exchange on the Polkadot network, offering a seamless blend of the high-speed trading typically found on centralized platforms with the security and autonomy of a DEX. This guide walks through setting up a Polkadex wallet and initiating trading with Hummingbot.

By leveraging Polkadex and Hummingbot, traders can enjoy a high-performance, secure, and automated trading experience without the custodial risks, making it an ideal platform for both novice and seasoned traders in the cryptocurrency ecosystem.

Hummingbot 2024 Technical Roadmap: Innovating for the Future

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After a year of significant milestones in 2023, we're excited to announce the 2024 Hummingbot technical roadmap! Our plans are geared towards enhancing the usability, functionality, and scalability of our platform. Building on the emergence of the V2 framework, we are excited to introduce a range of innovative features that will redefine algorithmic trading for our users.

Here what we expect to deliver from a technical standpoint in 2024:

2023: A Year of Innovation at Hummingbot

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As we are assembling the roadmap for the new year, it's important to reflect on the strides Hummingbot has made from an engineering standpoint in 2023.

In the 2023 Technical Roadmap, we defined 4 key goals:

  1. Expand Top Exchange Connectors: Update connectors to latest standards, support market orders and lending/staking
  2. Optimize Hummingbot codebase: Streamline maintenance and move Gateway DEX connectors into a separate repo
  3. Expand Scripts Framework: Integrate indicators into the Scripts framework, add more examples, and make them configurable
  4. Support External Modules: Support community-built external modules like the Brokers orchestration repo

Let’s review each of these milestones versus the actual progress made in 2023:

State of the Foundation 2024

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As 2023 winds to a close, reported volumes from Hummingbot clients have reached an all-time high of $140M per day. Widespread usage of Hummingbot across 114 exchange venues spanning both official releases and unofficial forks shows that Hummingbot is becoming the industry standard for market maker connectivity.

Since it has been two eventful years have passed since the inception of the Hummingbot Foundation and the issuance of the HBOT token, we wanted to update the original Hummingbot Foundation whitepaper. Specifically, this post has three objectives:

  1. Provide a retrospective on the Foundation’s journey over the past two years,
  2. Propose changes to the Hummingbot governance system, and;
  3. Offer a preliminary HBOT allocation budget for 2024.

Hummingbot Docker Quickstart Guide

Introduction

This brief guide will introduce you to the process of installing and deploying Hummingbot using Docker. You will learn step-by-step how to set up Hummingbot using Docker Compose, a tool for defining and running multi-container Docker applications, and then run your first algo trading strategy!

What You Will Learn

  1. Install Docker: Step-by-step instructions to installing Docker and Docker Compose,

  2. Hummingbot Interface: Uncover the essentials of the Hummingbot interface, including layout and navigation.

  3. Running a Script: Learn how to run an algo trading strategy as a Hummingbot script.

  4. Connecting API Keys: Master the crucial process of integrating API keys with Hummingbot, ensuring secure API-based bot trading across various exchanges.

Introducing V2 Strategies

We are excited to formally introduce the V2 Strategy Framework! After months of testing by us and our community, we are confident that using this new framework to design and deploy strategies will improve your algo trading P&L!

V2 strategies bring unparalleled modularity, real-time adaptability, and backtesting capabilities to your trading arsenal, allowing you to design and deploy powerful, custom strategies with only a few tweaks to the template.

Revolutionizing Strategy Design with Modularity and Flexibility

V2 Strategies marks a departure from the more rigid structure of V1 strategies. It's crafted to enable users to create powerful, custom strategies, even those who may not have extensive Python programming experience.

Key Features:

  • Composable: The core of V2 strategies lies in their modularity, allowing users to create complex and customized trading strategies using simple modifications in the provided templates.
  • Real-Time: Leveraging real-time market data, V2 strategies dynamically adjust spreads and shift prices. This responsiveness to market changes optimizes profitability and minimizes risk, surpassing the capabilities of the static V1 strategies.
  • Backtestable: A crucial component of any trading strategy is the ability to test and refine it. V2 strategies excel in this aspect, offering comprehensive backtesting tools that enable detailed simulations with historical market data, accessible through the Dashboard.

Retrospective on the October 2023 Bot Battle

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October 2023 was a particularly notable month since it marked the official Bot Battle, an exclusive monthly bot trading competition for Botcamp members. With eyes set on the prize and minds focused on performance, we embarked on a journey that tested both our strategic prowess and our bots' capabilities.

Diving into the October Bot Battle

Commencing on October 27th and running through to October 30th, I, alongside my fellow active Botcamp members, took part in a vibrant competition designed to pit our automated trading strategies against one another. As per the rules, our arsenal included any Hummingbot strategy or script, with a starting capital of no more than 200 USDT and the mandate that no additional top-ups were allowed post-competition commencement.

Epoch 6 Polls Recap

Every quarter, Hummingbot Foundation organizes Polls, a quarterly process that lets HBOT holders vote on how the Foundation distributes its maintenance resources and bounty budgets across the 50+ CEX, DEX, and blockchain network connectors in the Hummingbot codebase.

This week, we completed the Epoch 6 polls which decide which connectors will be included in the Hummingbot codebase for the October, November, and December 2023 releases.

Read on to learn about which connectors made the cut!

⚔️ Beta Bot Battle Results and Roundup!

The Beta Bot Battle has concluded, and we're thrilled to present the outcomes to the broader Hummingbot community!

Over a 48-hour period in September, Hummingbot users competed to see whose bots could earn the most profits and trade the highest volume, starting with an 100 USDT initial balance on Binance.

This inaugural experiment was, in our view, a resounding success. Though the participation was limited due to it being the first edition, the energy and camaraderie displayed on the #competitions Discord channel were palpable. We celebrated numerous triumphs, empathized with the setbacks, and eagerly anticipated the insights from participant write-ups about effective strategies.

Let's delve into the results: