Liquidation on Hyperliquid
What happens, step by step, when a position runs out of margin, and how to keep it from happening to you.
Hyperliquid liquidates a position when your account value falls below the maintenance margin, which is 1.25% of position value on 40x markets and up to 16.7% on 3x markets. It first sends market orders to the order book (only 20% at a time for positions over $100,000); if equity falls below two thirds of maintenance, the HLP liquidator vault takes the position over and the remaining margin is lost.
A liquidation is the exchange closing your position for you because the collateral behind it has run too low. It protects everyone else: without it, a losing trader could owe money nobody can collect. On Hyperliquid the process is public, onchain and runs in a fixed order.
The trigger: maintenance margin
Every position needs a minimum amount of collateral to stay open, the maintenance margin. Hyperliquid sets it at half the initial margin at the market’s maximum leverage:
| Market’s max leverage | Maintenance margin (share of position value) | Example market (4 Nov 2026) |
|---|---|---|
| 40x | 1.25% | BTC (positions up to $150M) |
| 25x | 2% | ETH (up to $100M) |
| 20x | 2.5% | SOL (up to $70M) |
| 10x | 5% | HYPE (up to $20M) |
| 3x | ~16.7% | lowest-leverage markets |
Bigger positions fall into higher margin tiers with lower maximum leverage, and so a higher maintenance rate on the part above the threshold.
You are liquidatable when your account value (collateral plus unrealized profit and loss) is below the maintenance margin on your open positions, measured at the mark price. In cross margin that’s the whole cross account against all cross positions; in isolated margin it’s only that position’s margin against that position.
What happens, in order
- Market liquidation on the book. Hyperliquid sends market orders to close the full position. Anyone can be on the other side, so liquidation flow is competed for in public. If the position closes and some margin remains, you keep what’s left.
- Partial liquidation for big positions. If the position is worth more than $100,000, only 20% is sent at first. After a block with a partial liquidation, there is a 30-second cooldown during which any further market liquidation orders for that user are for the entire position.
- Backstop liquidation. If equity falls below two thirds of the maintenance margin without the book absorbing the position, the liquidator vault, one of the strategies inside HLP, takes it over. In cross mode, all cross positions and cross margin transfer to the liquidator; in isolated mode, only that position and its margin. The maintenance margin is not returned: it is the buffer that makes backstopping profitable on average, and that profit goes to HLP depositors rather than to a company.
- Auto-deleveraging (ADL), the last resort. If an account or isolated position goes negative, traders on the other side are ranked by
(mark price / entry price) x (position notional / account value), meaning the most profitable and most leveraged first. Their positions are closed at the previous mark price against the underwater account. The docs state a strict rule: an account with no open positions never absorbs the platform’s losses.
Builder-deployed (HIP-3) markets each have their own onchain backstop liquidator, which only takes assets where cross margin is enabled, and falls back to ADL. See HIP-3.
Your liquidation price, in plain English
The docs give the exact formula:
liq_price = price − side x margin_available / position_size / (1 − l x side)
where side is 1 for a long and −1 for a short, l is 1 divided by the maintenance leverage (so 0.025 on BTC), and margin_available is your account value (cross) or isolated margin, minus the maintenance margin.
In words: take the cushion you have above maintenance, spread it over the position size, and adjust slightly because maintenance margin itself shrinks as the price falls. That’s how far the price can move against you.
Example. Long 1 BTC at $78,250, isolated with $7,825 margin (10x). Maintenance is 1.25% of $78,250, about $978. Cushion: $7,825 − $978 = $6,847. Divide by (1 − 0.025): about $7,023. Liquidation price: roughly $71,200, about 9% below entry. The same position in cross with a $10,000 balance liquidates near $69,000. The funding and margin page walks through both.
Three things to know:
- In cross, your leverage setting doesn’t change the liquidation price. Lower leverage only reserves more margin. What matters is position size versus account value.
- In isolated, leverage does matter, because it sets how much margin is assigned.
- The displayed price moves. Funding payments, and other cross positions’ profit and loss, shift it after you open.
Why it matters to you
- A stop-loss beats a liquidation. A stop-loss you set closes the position before liquidation and keeps the maintenance margin in your account. The docs recommend exactly this. Stop-loss orders trigger on the mark price; market TP/SL orders have a 10% slippage tolerance.
- Fast markets skip levels. If the price gaps through your stop, a limit stop may not fill; a market stop or a more aggressive limit price is more likely to.
- Liquidations feed HLP. If you deposit in HLP, backstop liquidation profits (and losses) are part of what you earn.
- Watch the mark price, not the last trade. That’s what the engine uses.
What can go wrong
- Cascades. In sharp moves, many liquidations hit the book at once and push the price further, which liquidates more positions.
- ADL can close a winning position. If you are highly profitable and leveraged on the other side of a failed backstop, ADL can close your position at the previous mark price, earlier than you planned.
- Cross takes everything. A backstop liquidation in cross mode with no isolated positions leaves the account at zero.
- Funding erodes your cushion hour by hour on a crowded side, pulling the liquidation price closer.
- Thin markets. Small and builder-deployed markets have less depth to absorb liquidation orders.
Related reading: perpetual futures explained, how the order book works and what HLP is.
Questions people ask
Why was I liquidated on Hyperliquid?
Your account value (deposit plus unrealized profit or loss, after funding) dropped below the maintenance margin for your positions, measured at the mark price. In cross margin, losses on other positions and funding payments count too, so a liquidation can arrive earlier than the price you saw when opening.
What price does Hyperliquid use for liquidations?
The mark price, a median of three inputs: the oracle price adjusted by Hyperliquid's recent book, the median of Hyperliquid's best bid, best ask and last trade, and a weighted median of perp prices on Binance, OKX, Bybit, Gate and MEXC. It updates about every 3 seconds.
Do I keep anything after a liquidation?
If the position is closed on the order book and margin is left over, yes, it stays with you. If it reaches a backstop liquidation, the position and its margin pass to the liquidator vault and the maintenance margin is not returned. In cross mode with no isolated positions, that leaves the account at zero.
Is there a liquidation fee?
Hyperliquid's docs say there is no clearance fee on liquidations, unlike many centralized exchanges. Normal trading fees still apply to the market orders sent to the book.
What is auto-deleveraging (ADL)?
A last-resort safety net. If an account or isolated position goes below zero, profitable traders on the opposite side are ranked by profit and leverage, and the top-ranked positions are closed at the previous mark price against the underwater account, so the exchange carries no bad debt.