How liquidation works on Hyperliquid and Lighter

A perp position is liquidated when the margin behind it, plus its running profit or loss, falls to the maintenance margin: the slice of the position’s value the exchange insists stays funded. Hyperliquid and Lighter both work that way, and both measure it on the mark price, not the last trade. Where they differ is in how the maintenance margin is set and in what happens once it is breached. You can work out the price for any position with the liquidation price calculator, or with the versions for Hyperliquid and Lighter that read each market’s own limits.

When does Hyperliquid liquidate a position?

When the account’s equity drops below its maintenance margin. Hyperliquid sets the maintenance margin at half the initial margin at a coin’s maximum leverage: 1.25% for a 40x coin such as BTC, 2% for ETH at 25x, 16.7% for a 3x coin. The positions are then sent to the order book to be closed, and the price that decides it is the mark price, which combines prices from major centralized exchanges with Hyperliquid’s own book.

Large positions follow margin tiers. Above a set position value a coin allows less leverage and asks a higher maintenance margin, with a deduction that keeps the total requirement continuous as the position grows. The tier that counts for liquidation is the one matching the position’s value at the liquidation price. Hyperliquid documents the price as price − side × margin available ÷ position size ÷ (1 − l × side), where side is 1 for a long and −1 for a short and l is one over the maintenance leverage.

When does Lighter liquidate a position?

In stages. Every Lighter market sets three fractions of position value, from largest to smallest: initial, maintenance and close-out. At the time of writing BTC uses 2%, 1.2% and 0.8%, so up to 50x. The account’s value against those requirements decides what happens.

• Between initial and maintenance the account is in pre-liquidation: it can only make trades that neither grow a position nor weaken its margin.
• Below maintenance, partial liquidation starts: open orders are cancelled, and positions are closed through the order book one by one until the account is healthy again.
• Below close-out, full liquidation: the LLP, Lighter’s liquidity pool and insurance fund, takes over the positions still open.
• If the account goes negative and the LLP cannot absorb a position, auto-deleveraging closes it against traders on the other side.

So a Lighter position has two prices worth knowing: where partial liquidation starts, and where the rest is taken over. The liquidation price Lighter shows for an open position is the first of them.

Isolated or cross: what changes?

Only what counts as margin. An isolated position is backed by the margin allocated to it and nothing else; Lighter even treats it as a separate account, so other positions cannot pull it under. A cross position shares the whole account’s value with every other open position: the liquidation price sits further away, but one bad position can take the rest with it. On Hyperliquid the margin available for a cross position is the account value less the maintenance margin of everything open.

What moves the liquidation price after you open?

• Funding. Both venues settle it every hour, from or into your margin, so a position that pays funding drifts towards liquidation. The funding rate calculator shows how fast.
• Fees, which come out of the same margin when the position is opened.
• Other cross positions, which share the margin and add their own maintenance requirement.
• Adding or removing margin on an isolated position, which moves the price directly.
• On Hyperliquid, accounts that also count spot balances as margin are liquidated further from the price than the perp balance alone would suggest.

How do you keep a position away from liquidation?

• Size the position from the stop first, then pick the leverage, and check that the liquidation price sits beyond the stop. The position size calculator does all three.
• Use less leverage than the venue allows. The maximum is a limit, not a recommendation.
• Keep an eye on funding when you hold for days, and on the other positions in a cross account.
• Watch every venue in one place. TrueHold reads Hyperliquid by address and Lighter through a read-only token, so the position nearest liquidation sits next to the assets that could cover it.

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