Hyperliquid
A structured knowledge hub for understanding Hyperliquid's system design and risk model.
For system understanding → start with Overview. For practical use → jump to Lifecycle.
This page is an index. It guides you to dedicated articles for depth, so you can build a correct mental model without reading a long one-page essay.
New to Hyperliquid
Build a correct system mental model before touching leverage.
Already trading
Use this hub as a checklist for where risk enters your workflow.
What Hyperliquid Is
Hyperliquid is a perpetual futures venue designed as infrastructure. Think of it less as a website and more as a protocol with a trading interface.
Definition
A perpetual futures exchange built as a dedicated Layer 1 blockchain.
Distinct from CEX
Funds are not held by an operator. No account recovery. No discretionary support.
Distinct from AMM
Price discovery happens through a central limit order book (CLOB), not an AMM curve.
The exchange and the blockchain are the same system.
Implications
- you are operating inside protocol rules, not platform discretion
- execution is final and mistakes are not reversible by support
- risk is enforced automatically through margin and liquidation
- performance and behavior follow from specialization, not general-purpose design
Hyperliquid is
- a purpose-built Layer 1 blockchain
- a fully on-chain order book exchange
- non-custodial by design
- optimized for perpetual futures trading
Hyperliquid is not
- a centralized exchange with account recovery
- a typical AMM-based DEX
- a general-purpose DeFi protocol
Core Properties
The system-level constraints that define how Hyperliquid behaves.
Use these properties as a filter for everything you see in the UI. If a screen suggests a CEX workflow (support, reversals, discretion), these five constraints tell you what will actually happen.
Protocol-Level Matching
Matching is enforced at the consensus layer. There is no separate exchange engine.
Deterministic Liquidation
Margin rules execute automatically. There are no discretionary overrides.
Performance Optimization
The chain is optimized for trading logic. Not for general smart contracts.
Hybrid Decentralization
Non-custodial by structure, validator-governed. It occupies a hybrid position.
Where users lose money
- leverage amplifies small errors into forced liquidation
- fast markets produce slippage, partial fills, and unexpected execution
- self-custody mistakes are irreversible once signed and confirmed
- timing assumptions break during volatility and network congestion
Who It's For
A derivatives venue is only as safe as your mental model of it.
Good fit if
- you understand leverage mechanics
- you accept irreversible execution
- you are comfortable with self-custody
Poor fit if
- you expect account recovery
- you rely on customer support
- you require regulated brokerage safeguards
Core Reading Path
This hub stays scalable by separating concepts into dedicated pages.
Recommended order for a first-time reader:
- Hyperliquid: Overview & Positioning
What this system is (and is not), and what expectations to discard.
- Hyperliquid Architecture Explained
How the L1 and the exchange fit together at the protocol level.
- Custody Model & Irreversibility
What you control, what you delegate, and why actions cannot be reversed.
- Margin & Liquidation Mechanics
The invariant that ends trades: thresholds, triggers, and forced closure.
- Decentralization & Governance
Validator set reality, governance surface, and where trust assumptions live.
Shortcuts
- If you only want the system diagram: Architecture Explained
- If you only care about safety and recovery: Custody & Irreversibility
- If you want to understand liquidation risk: Margin & Liquidation
- If you want the practical funding flow: Depositing Funds
- If you want the decentralization reality check: Decentralization & Governance
System Lifecycle
The five stages most users touch in practice.
Treat this as a checklist: each stage has its own failure modes, and leverage punishes the weakest link.
Connect a wallet identity. There is no traditional account creation.
Move assets into the trading environment. Settlement rules define availability.
Triggered automatically when thresholds are breached. No margin calls. No overrides.
Reduce exposure, then withdraw. Exit funds back to self-custody.
Common mistakes
- treating wallet connection like account creation (it is not)
- assuming deposits are instantly available (settlement defines availability)
- using market orders without considering slippage and partial fills
- raising leverage and relying on manual closes during volatility
- confusing closing a position with withdrawing funds
- assuming support can reverse actions or recover access (it cannot)
Knowledge Map
A clean structure for learning and lookup.
This map separates system logic from user interface behavior. Understanding this separation prevents incorrect mental models.
If you get stuck, ask: is this a system question (architecture, custody, liquidation), a usage question (wallet, deposit, trading, withdrawal), or a risk question (slippage, delays, failure modes)?
Core System
Risk & System Behavior
Quick FAQs
Fast answers. Deeper links when needed.
These answers are intentionally short. If a decision depends on it, open the linked article and treat the system constraints as primary in practice - not UI hints, not marketing, and not assumptions from custodial exchanges.
Is Hyperliquid centralized?
It is non-custodial and on-chain but operates with a defined validator set. It occupies a hybrid position. → Read detailed analysis
Does Hyperliquid require KYC?
The protocol does not enforce KYC. Regulatory obligations depend on user jurisdiction.
Can transactions be reversed?
No. Once confirmed on-chain, actions are irreversible.
What happens during liquidation?
Positions are automatically closed when margin requirements are breached.