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Liquidations & auto-deleveraging
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Markets by Kinetiq operates on Hyperliquid infrastructure, which handles all liquidation and risk management processes. This section provides a brief overview—for complete technical details, refer to Hyperliquid's official documentation.
Concept | Description |
|---|---|
Trigger | Account equity falls below maintenance margin |
Method | Positions sent to orderbook as market orders |
Price used | Mark price (not last trade price) |
Partial liquidations | Large positions (>100k USDC) liquidated incrementally |
Key point: Liquidations are based on mark price, which protects you from flash crashes in the last traded price. See oracles & pricing for how mark price is calculated for Markets assets.
Auto-deleveraging (ADL)
If market liquidations cannot fill, Hyperliquid's ADL system activates as a last-resort safeguard:
- Profitable opposing traders are selectively deleveraged to cover losses
- Ranking prioritizes most profitable and most leveraged positions
- No insurance fund—solvency maintained through position rebalancing
- Fully on-chain, transparent, and non-discretionary
Key point: Unlike native Hyperliquid perps, Markets perps proceed directly from market liquidations to ADL without an intermediate liquidator vault step. ADL remains intentionally rare and designed to activate only in extreme market conditions.
Protecting your positions
Action | Benefit |
|---|---|
Use stop-loss orders | Exit before liquidation threshold |
Monitor margin ratio | Stay above maintenance requirements |
Use appropriate leverage | Lower leverage = further liquidation price |
Full Documentation: Hyperliquid liquidations
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