Jack Paul 
Hyperwave, a yield vault protocol built by Swell Labs on Hyperliquid, will end operations on December 16, 2026. The team announced the wind-down on November 11 and immediately put every vault into withdrawal-only mode. The reasons it gave were simple: running costs were too high, and regulatory uncertainty kept growing. Depositors can start pulling funds now.
What happens to the vaults
Hyperwave says the vaults will keep generating yield during the wind-down. Positions will be unwound over time and converted back into the underlying assets. Users who do not withdraw before the deadline are not supposed to be stranded. Once the protocol closes, any remaining net asset value will be sent directly to the wallets that hold vault tokens. That is the plan, at least. The transition still carries execution risk, so waiting for a final payout is a choice, not a guarantee.
Token holders get a final buyback
The team is routing all protocol revenue generated before shutdown, 100 percent of it, into buybacks and burns of HWAVE. For people with staked positions, GWAVE staking can be unwound at any time. Hyperwave also warned about phishing risk during the transition. Users should contact the team only through official channels and should ignore any link, DM, or site that promises faster refunds.
TVL fell almost 98 percent
Hyperwave’s total value locked peaked at $45.75 million in August 2025. By the November announcement, TVL had dropped to roughly $917,000 to $923,000. That is a fall of about 98 percent. Fixed costs do not shrink just because deposits do. As revenue fell with TVL, the gap between expenses and income likely became too wide to close. The buyback plan for HWAVE still sends revenue to holders until the end, but with TVL near $923,000, the revenue base feeding those buybacks is small.
What users should do now
Current depositors can exit early if they want certainty. Those who stay keep earning yield while positions unwind and may receive leftover value after December 16. It is a straightforward trade-off: earlier withdrawal versus a final distribution. For the wider yield vault market, Hyperwave’s shutdown is a reminder that high peak TVL does not protect a protocol from thin revenue and heavy fixed costs. It also shows how fast regulatory pressure and falling deposits can force a small team to close a product.