Hyperliquid liquidations explained

A liquidation is Hyperliquid closing your position because your losses have left too little margin behind it. Famous wallets get liquidated in public, which is why "Hyperliquid liquidation" is one of the most searched terms about it.

When it happens

Your account is liquidated when its equity falls below the maintenance margin: half of the initial margin at the market's maximum leverage. That is between 1.25% of the position (on 40× markets) and 16.7% (on 3× markets).

At 40× leverage a move of about 1.25% against you can trigger it; at 10×, roughly 10% minus the maintenance margin.

How Hyperliquid liquidates

1. The order book first. Hyperliquid sends market orders to close the position. If enough is closed to meet maintenance margin again, whatever collateral is left stays yours.
2. Large positions in steps. For positions over $100,000, 20% goes to the book first, with a 30-second pause before the rest.
3. The backstop. If equity falls below two thirds of maintenance margin before the book can absorb it, the liquidator vault (part of HLP) takes over the position, and the maintenance margin is lost.

There is no separate clearance fee on Hyperliquid liquidations.

How to avoid it

• Use less leverage than the maximum. The liquidation price moves closer with every step up.
• Use isolated margin for risky trades, so only that position's margin can be lost.
• Set a stop-loss well before the liquidation price.
• Watch funding on long holds: it slowly eats margin.

Famous liquidations

Some of the best-known Hyperliquid wallets have been liquidated many times: see James Wynn and Machi Big Brother, whose all-time perp P&L is on their pages. Our rankings leave out traders whose record rests on a few huge leveraged bets.