Hull

Hull is the senior tranche. It is the deck that is meant to stay dry.

A Hull position is a fixed-maturity series: you deposit into a series, the series accrues a fixed rate, and at maturity the series redeems principal plus that yield. Losses in the delta-neutral book reach Hull only after everything junior to it is exhausted. The rate is a contract parameter set at issuance. It is not an expected return and not a historical one.

Testnet, unaudited

Vessel is experimental software in testnet. No Vessel contract has been audited. The public repository contains only a README and a licence as of 2026-08-29, so every contract-level detail on this page (series token name, function signatures, addresses) is design-stage and unverified.

Series

• Fixed maturity. Each Hull series has a maturity date. At launch, series run for 4 weeks.
• Transferable. Series positions are ERC-20-style tokens. They can be moved and sold like any token.
• Redemption at maturity. At maturity a series redeems principal plus the fixed yield accrued over its life.
• No early redemption. There is no withdraw path before maturity. Early exit means selling the series token to someone else. If no buyer exists, the position is held to maturity.
• Issuance is constrained. New Hull cannot be issued if it would push the subordination ratio below the floor (see below).

The exact token standard, series naming scheme, and whether one contract holds all series or each series is its own contract are not published UNVERIFIED — PENDING GATE-0.

The rate

Hull's rate is a contract parameter. It is computed from a smoothed, haircut, capped measure of the funding the book has been collecting, and then fixed for the series. It is not a performance figure.

r_H = clamp(EWMA_30d(net funding APR) × (1 − h), 0, r_cap)
h     = 40%        (haircut)
r_cap = 15% APR    (ceiling)

Three things the formula does:

1. EWMA_30d(net funding APR) smooths the last 30 days of net funding into one number, so a spike in either direction moves the rate slowly.
2. × (1 − h) with h = 40% takes a 40 percent haircut. Hull is promised less than the book has been earning, so that the residual can cover the promise through weaker weeks.
3. clamp(…, 0, r_cap) bounds the result. It can never go below zero and can never exceed r_cap = 15% APR, however high funding runs.

The litepaper does not state when the rate is sampled relative to a series opening, whether it is fixed once per series or reset for each new series, or who can trigger the computation. Those are not published UNVERIFIED — PENDING GATE-0. What is stated: once set for a series, r_H is a contract parameter, and it stays a contract parameter.

Illustrative accrual

Illustrative, not a forecast. Every input below is hypothetical. It exists to show the arithmetic, not to suggest a rate Hull has paid or will pay.

Suppose, hypothetically, the 30-day EWMA of net funding APR reads 12 percent at the moment a series is struck.

r_H = clamp(12% × (1 − 0.40), 0, 15%)
    = clamp(7.2%, 0, 15%)
    = 7.2% APR          ← a contract parameter for this series

Suppose 10,000 USDC is deposited into a 4-week (28-day) series at that parameter. Daily accrual follows the waterfall's Hull term, A_H = r_H × H × Δt:

A_H = 7.2% × 10,000 × (28 / 365)
    ≈ 55.23 USDC over the series

Redemption at maturity would be principal plus accrual, roughly 10,055 USDC, provided the tranche is never impaired. Again: the 12 percent input is invented for this example, and 7.2 percent is the contract parameter that would result from it, not a yield Vessel has produced.

What protects Hull

Three layers sit between the book's losses and Hull principal. They are consumed in order.

LOSS ORDERING

1. Ballast, the first-loss tranche

Ballast is the junior tranche. In the accrual waterfall it receives only the residual after the protocol fee and Hull's fixed accrual are paid. In a shortfall, Ballast NAV absorbs the loss first. Ballast holders are paid a levered residual precisely because they stand in front of Hull.

2. The Reserve

The Reserve targets 2 percent of TVL and is funded from the protocol fee: 10 percent of gross positive yield is taken as fee, and half of that goes to the Reserve until the target is reached. Its job is to smooth transient negative funding. If a shortfall exceeds Ballast NAV, the Reserve absorbs next.

3. The 20 percent subordination floor

The protocol enforces B / (H + B) ≥ θ_min = 20% at all times. Ballast must be at least 20 percent of Hull plus Ballast. This is what keeps layer 1 meaningful: it caps how much Hull can be issued against a given Ballast, and it blocks Ballast withdrawals that would thin the cushion below the floor. New Hull issuance and Ballast withdrawals are both constrained by it.

The delta band (net delta within 1 percent of gross notional, rebalanced on breach or a 4-hour timer) and the short-leg liquidation price sitting at least 40 percent above mark are book-level protections that reduce the chance a shortfall reaches any tranche at all. They are described on the mechanism pages.

Impairment

If a shortfall exhausts Ballast NAV and then the Reserve, Hull principal is impaired. Vessel calls this a credit event. Nothing about the series structure prevents it; the structure only orders who loses first. The full ordering, and the conservation invariant ΔNAV_Hull + ΔNAV_Ballast + ΔReserve + fees = G that ties the tranches together every epoch, is on the waterfall page.

What happens to a series after a credit event, whether redemption pays pro rata or the series is frozen, and whether new series can open while an existing one is impaired, are not published UNVERIFIED — PENDING GATE-0.

Why it looks like Pendle

Hull is deliberately Pendle-shaped. A transferable ERC-20 with a fixed maturity that redeems principal plus a fixed amount is the same shape as a Pendle principal token, and the underlying of a Pendle market must be a fully transferable ERC-20 with no locking or vesting. That is why Hull has no early-redemption path and why series are tokens rather than ledger entries.

This is a design decision, not a listing. Pendle's core contracts are deployed on Monad mainnet; no Vessel or Hull market exists on Pendle, and Pendle requires any custom SY wrapper to be audited, which Vessel has not been. See the Pendle integration page for both facts and the current tier, and docs.pendle.finance for the listing requirements.

What is not on this page

• Series token contract name, symbol, and addresses: not published.
• The sampling time and reset cadence of r_H: not published.
• Post-impairment redemption mechanics: not published.
• Any rate Hull has paid on testnet: none is published, and none should be read as a forecast if one appears.

Source: the Vessel litepaper.