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Built on Hyperliquid’s core engine

HIP3 perps inherit the HyperCore stack, including high-performance margining and order books. Our liquidation and ADL mechanics are handled by this same underlying system, which has been battle-tested at scale.

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When liquidations happen

A liquidation occurs when account equity falls below the maintenance margin. On Hyperliquid, maintenance margin is defined as half of the initial margin at max leverage, and liquidation checks are based on this requirement.

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Liquidation flow

  1. Order book liquidation first
    When equity drops below maintenance margin, the system first attempts to close positions by sending market orders to the order book. If requirements are restored, any remaining collateral stays with the trader.
  2. Backstop liquidation if needed
    If equity drops below two thirds of maintenance margin without successful liquidation through the book, a backstop liquidation occurs via the liquidator vault mechanism.

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Mark price robustness

Liquidations use the mark price, which combines external CEX prices with Hyperliquid’s own book state, making liquidations more robust than relying on a single instantaneous book price.

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Auto deleveraging (ADL)

ADL is the final safeguard that strictly ensures platform solvency. If an account value or isolated position value becomes negative, profitable traders on the opposite side are ranked by unrealized PnL and leverage used, and positions are closed at the previous mark price to ensure there is no bad debt.