Glossary
Backstop liquidation
What happens when the order book cannot absorb a liquidating position and equity falls far enough: the position transfers to the liquidator vault, and the maintenance margin is not returned.
Checked against the Hyperliquid documentation 8 Sept 2026 · how we check
Related terms
- Liquidation price The price at which your account equity falls to the maintenance margin and the position is closed by the exchange. It is a level where liquidation begins, not a guaranteed exit price.
- HLP Hyperliquid's protocol-owned liquidity vault. It runs market-making strategies, absorbs backstop liquidations, and passes its profits and losses to depositors with no profit share taken.
- Maintenance margin The minimum equity a position must retain. On Hyperliquid it is half the initial margin at the market's maximum leverage, so a 40x market requires 1.25% of notional.