Elevated risk — novel vault mechanics with demonstrated exploitation history, partially offset by strong trading volume and aggressive fee-funded buyback program.
Top Risks
1
HLP vault automatically inherits liquidated positions, including illiquid tokens where market manipulation can force the vault to absorb outsized losses — as demonstrated in the March 2025 JELLY incident where the vault faced $12M in unrealized losses.
2
The protocol's validator set is small (~20 validators), enabling rapid consensus actions like delisting tokens and settling positions at arbitrary prices within minutes, raising centralization concerns around emergency interventions.
3
Socialized loss mechanism means HLP depositors bear counterparty risk from all perpetual trading on the platform, with no per-asset exposure caps limiting concentration risk on illiquid listings.
4
Custom L1 chain with proprietary consensus means the entire derivatives stack runs on infrastructure that has not been independently replicated or battle-tested by other protocols.
Risk Breakdown
Frequently Asked Questions
Is Hyperliquid HLP safe to use?
Hyperliquid HLP receives a C risk grade (47/100) from Hindenrank, where lower scores indicate lower risk. Elevated risk — novel vault mechanics with demonstrated exploitation history, partially offset by strong trading volume and aggressive fee-funded buyback program. Hyperliquid HLP is the protocol-owned market-making vault on Hyperliquid, a custom L1 perpetual futures exchange with $374M in vault deposits and ~$30B FDV. Its C+ grade reflects novel vault mechanics that automatically inherit liquidated positions across all markets, the March 2025 JELLY manipulation incident, and centralization concerns around a small validator set that can delist tokens and settle positions within minutes.
What are the main risks of using Hyperliquid HLP?
The key risks identified for Hyperliquid HLP are: (1) The HLP vault automatically takes over positions from liquidated traders, including on illiquid tokens. In March 2025, a trader manipulated the JELLYJELLY token price and forced the vault to absorb $12M in losses before validators intervened by delisting the token. (2) Hyperliquid runs on its own custom blockchain with approximately 20 validators who can make rapid emergency decisions, including delisting assets and settling positions at chosen prices. (3) HLP depositors are exposed to all perpetual markets listed on the platform simultaneously with no per-market isolation.
What is Hyperliquid HLP's risk score breakdown?
Hyperliquid HLP scores 47/100 across eight risk dimensions: Mechanism Novelty: 6/15, Interaction Severity: 10/20, Oracle Surface: 5/10, Documentation Gaps: 2/10, Track Record: 6/15, Scale Exposure: 10/10, Regulatory Risk: 4/10, Vitality Risk: 4/10. The highest risk area is Scale Exposure at 10/10.
How does Hyperliquid HLP compare to other Derivatives protocols?
Among 53 rated Derivatives protocols on Hindenrank, Hyperliquid HLP ranks #47 by safety (lowest risk score = safest). Its 47/100 risk score and C grade place it among the riskier Derivatives protocols.
Has Hyperliquid HLP ever been hacked or exploited?
Hyperliquid HLP scores 6/15 on the Track Record risk dimension, indicating some history of security incidents or exploits. Higher scores reflect more severe or frequent incidents. Review the full risk report for details.