Burn & Delegate

HyperSwap introduces a powerful utility contract called the DelegatedPositionVault. This vault allows liquidity providers to permanently lock their V2 and V3 positions while delegating the right to collect fees through a transferable NFT. This is ideal for protocols, treasuries, or projects that want to signal commitment by locking liquidity while still enabling active fee management.

Why Use Burn & Delegate?

In standard Hyperswap architecture, LP positions are held as LP ERC-20 tokens for V2 and NFTs (via the Non-Fungible Position Manager) for V3. To collect swap fees, LPs need to interact directly with this NFT, using burn() and collect() functions.

However, some LPs (e.g. DAOs or teams) want to:

• Lock liquidity permanently for transparency/trust
• Delegate fee collection rights to another wallet
• Tokenize fee rights for transferability or secondary markets

This is exactly what DelegatedPositionVault enables.

How It Works

1. Deposit:
   • The LP deposits their position NFT into the DelegatedPositionVault.
   • The original NFT/LP tokens are held permanently by the vault and cannot be withdrawn.
2. Mint Delegate NFT:
   • The vault mints a new ERC-721 NFT, which represents fee collection rights.
   • This delegate NFT is fully transferable and can be sent or sold.
3. Fee Collection:
   • The delegate NFT holder can call collect() on the vault.
   • The vault automatically performs an internal burn(0,0) + collect() for the locked position.
   • The output tokens (token0/token1 fees) are sent to the collector.