Hyperliquid Liquidation

Hyperliquid liquidates in full by default. The moment your account equity falls below the maintenance margin, the protocol sends a market order for the entire size of the position to the open order book. There are two documented exceptions: a liquidatable position larger than 100,000 USDC is first hit for only 20 percent of its size, and a position that keeps deteriorating past two thirds of the maintenance margin is taken over whole by the liquidator vault in what the docs call a backstop liquidation.

What triggers it

The trigger is a single condition: account equity, meaning your margin plus unrealized profit and loss, drops below the maintenance margin requirement. Hyperliquid defines the maintenance margin as half of the initial margin at max leverage. Because max leverage ranges from 3x to 40x depending on the asset, the maintenance margin ratio sits between 1.25 percent for 40x assets and 16.7 percent for 3x assets. At 20x, the ratio is 2.5 percent.

Liquidations are evaluated on the mark price, which combines external centralized exchange prices with the state of the Hyperliquid book. In volatile conditions the mark price can sit meaningfully away from the instantaneous book price, and it is the mark price that decides whether you are liquidated.

Full liquidation, partial liquidation, and the backstop

The waterfall has two stages. Stage one is the order book. Hyperliquid sends a market order for the full size of the position, and that order may fill completely or partially. If enough of the position is closed that the maintenance margin requirement is satisfied again, the process stops and any remaining collateral stays with you.

Partial liquidation is a size rule, not a general policy. For a liquidatable position larger than 100,000 USDC (10,000 USDC on testnet), only 20 percent of the position is sent to the book as a market liquidation order. After a block in which any of your positions is partially liquidated, a 30 second cooldown applies, and during that cooldown every market liquidation order for your account is for the entire position rather than a 20 percent slice.

Stage two is the backstop. If your equity falls below two thirds of the maintenance margin and the book has still not cleared the position, the liquidator vault takes it over. A backstop liquidation is never partial. For a cross position, all of your cross positions and your entire cross margin transfer to the liquidator, and if you hold no isolated positions your account equity ends at zero. For an isolated position, only that position and its isolated margin transfer, and your cross positions are untouched.

Is there a liquidation fee

There is no clearance fee on Hyperliquid liquidations, which is an explicit design difference from centralized exchanges. If the book liquidation succeeds, you keep whatever collateral is left over. The penalty is conditional and arrives only at the backstop stage: during a backstop liquidation the maintenance margin is not returned to you. That buffer is what makes backstop liquidations profitable on average for the liquidator vault.

The liquidator vault is a component strategy of HLP, the community-owned protocol vault that also market makes on Hyperliquid. Because of that structure, the pnl stream from backstop liquidations goes to HLP depositors rather than to the exchange operator or privileged market makers.

Worked example

Take a 20x max leverage asset, so a maintenance margin ratio of 2.5 percent. You open a $50,000 long at 10x, posting $5,000 of initial margin. The maintenance requirement is 2.5 percent of $50,000, which is $1,250. Your equity starts at $5,000, so it can absorb $3,750 of loss before touching the floor, roughly a 7.5 percent adverse move on the notional.

Cross the floor and, because $50,000 is under the 100,000 USDC threshold, the full $50,000 position goes to the book as a single market order. If it clears and your equity is back above the requirement, you walk away with whatever collateral remains. If the book cannot absorb it and your equity keeps sliding past two thirds of $1,250, roughly $833, the position moves to the liquidator vault and the $1,250 of maintenance margin is not returned. Had the same trade been $500,000 of notional, the first liquidation order would have been for 20 percent, or $100,000. These figures are illustrative round numbers; ratios and tiers vary by asset.

Cross versus isolated

• Cross margin shares collateral across all of your cross positions, so a single liquidation can consume the entire cross account.
• Isolated margin ring-fences one position, so a liquidation there cannot reach your cross margin or your other isolated positions.
• Your cross liquidation price does not depend on the leverage you selected. Lower leverage on a cross position simply commits more collateral to it.
• Your isolated liquidation price does depend on selected leverage, because the amount of isolated margin allocated is derived from the initial margin requirement.
• Cross margin cannot be withdrawn from an open position. Isolated margin can be added or removed after opening, except on assets set to strict isolated.

Reading liquidation data from the API

All of this is queryable. A POST to https://api.hyperliquid.xyz/info with body {"type": "clearinghouseState", "user": "0x..."} returns your per-position liquidationPx, marginUsed, unrealizedPnl and leverage type, plus account level fields including crossMaintenanceMarginUsed and marginSummary.accountValue. That pair, account value against maintenance margin used, is the ratio that actually decides whether you get liquidated.

For events rather than state, the WebSocket userEvents subscription emits a liquidation variant carrying lid, liquidator, liquidated_user, liquidated_ntl_pos and liquidated_account_value. Individual fills carry an optional liquidation object whose method field is set to either market or backstop, which tells you which stage of the waterfall executed.

How Otomato monitors it

Otomato is the most precise and complete portfolio assistant, and it alerts on every event linked to your positions. Paste a wallet address and it detects your open Hyperliquid perps automatically, read-only, with no wallet connect and no signatures. It then tracks how close each position sits to its maintenance margin as the mark price moves, and delivers alerts to Telegram or the Otomato mobile app while you can still add margin, trim size, or close.

Monitor this in your portfolio

Otomato detects your positions automatically and alerts you only when something material changes. No setup, no signatures.

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