All protocol fees collected from users borrowing and paying back their loans are distributed to HYPE holders in native Ether (ETH) proportional to their holdings. Simply put, the more HYPE you hold, the more rewards you will earn.
Rewards are distributed in the same transaction that fees are collected from borrowers securing a loan and paying back their loans.
Protocol rewards can be claimed manually on the HYPE platform via rewards section:
Alternatively, any unclaimed rewards will be sent automatically to a holder's wallet when the wallet performs any HYPE transaction, such as buying, selling or transferring HYPE.
Sending a single HYPE token to another wallet to have unclaimed rewards automatically claimed may be more gas efficient than initiating a manual rewards claim on the HYPE website.
Even though HYPE collateral is held on the contract during the loan process, the HYPE collateral will still generate protocol rewards for its owner.