Summary
Understand what triggers liquidation on Hype perps, how mark price is used, and what happens to margin when a position is liquidated.
Liquidation is the forced closure of a position when the margin allocated to it can no longer meet the maintenance margin requirement. It is automatic and irreversible.
As the market moves against a position, unrealized loss grows and effective margin falls. If margin falls below the maintenance margin floor, the position is liquidated.
Hype perps use isolated margin. Each position is evaluated separately. If one position is liquidated, only that position and its allocated margin are affected. Other positions and the rest of your perps cash balance are not used to cover that position.
When liquidation triggers, the protocol closes the position at the best available price. Any remaining margin after the loss and protocol handling may stay in the account, but funds lost to liquidation cannot be recovered by Hype or anyone else.
Liquidation triggers from the mark price, not the last traded chart price. Mark price is the protocol reference price, based on oracle pricing and local protocol activity. This helps reduce the impact of brief isolated price spikes, but it also means liquidation can occur when the chart appears to show a different price.
The liquidation price shown in the app is an estimate. It can change as funding payments apply, price moves, or margin is added or removed.
Ways to reduce liquidation risk include using lower leverage, adding margin, reducing position size, or setting a stop loss before the liquidation level.
FAQ
What triggers liquidation?
Liquidation triggers when allocated margin falls below the maintenance margin requirement.
Does liquidation use chart price?
No. Liquidation uses mark price.
Can liquidated funds be recovered?
No. Funds lost to liquidation cannot be recovered by Hype or anyone else.
Related articles: Initial and Maintenance Margin, Take Profit and Stop Loss, Risks of Perps Trading.
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