Security & Trust
How Hyperliquid Protects Your Assets
In DeFi, security is not a feature—it is the foundation. Hyperliquid is designed with a "security-first" architecture that eliminates the single points of failure common in centralized exchanges while mitigating the smart contract risks of typical DEXs.
Six Pillars of Security
Self-Custody
L1 Architecture
Code Audits
Risk Engine
API Security
Bridge Security
1. Self-Custody: The Ultimate Protection
The biggest risk in crypto is counterparty risk—the risk that the exchange holding your money goes bankrupt (e.g., FTX, Mt. Gox).
Your Keys, Your Crypto
Hyperliquid is non-custodial. You do not deposit funds into a centralized wallet controlled by a CEO.
Bridge Contract
Funds are locked in a smart contract on Arbitrum One. This contract is governed by code, not humans.
Uncensorable
No one can freeze your account or prevent you from withdrawing your funds (subject to standard L1 dispute periods).
2. L1 Architecture & Consensus
Hyperliquid runs on a custom Layer 1 blockchain built with Tendermint consensus.
Global Validators
The network is secured by a distributed set of validators spanning the globe. To compromise the chain, an attacker would need to control 2/3rds of the voting power (stake).
Tendermint Consensus
The custom Layer 1 blockchain uses Tendermint consensus for fast finality and security.
Optimistic Security
The bridge to Arbitrum operates on an optimistic model. Withdrawals have a challenge period to allow validators to verify the L1 state before releasing funds on Arbitrum.
3. Code Audits & Bug Bounties
The Hyperliquid team engages top-tier security firms to audit critical infrastructure.
Core L1 Logic
The matching engine and state management undergo rigorous auditing
Bridge Contracts
Smart contracts on Arbitrum that lock/unlock collateral are audited by top security firms
HIP-1 Token Standards
Token listing and issuance mechanisms are thoroughly tested
Bug Bounty Program
Active incentive to white-hat hackers to find and report vulnerabilities responsibly
4. Risk Engine & Liquidations
A common way DEXs fail is through "bad debt"—when a trader loses more money than they have, and the exchange cannot liquidate them fast enough.
Real-Time Risk Monitoring
Runs on-chain and updates with every block (<0.2s). Checks margin health of every account continuously.
Instant Liquidations
Because the engine is so fast, it liquidates under-collateralized positions immediately, preventing bad debt accumulation.
Insurance Fund
Portion of trading fees goes into an Insurance Fund. If liquidation results in a loss, the fund covers the difference.
This ensures winning traders can always be paid out, and the HLP vault remains solvent even during extreme market volatility.
5. API Security (Agents)
For users running bots or automated strategies, Hyperliquid introduces API Agents.
Principle of Least Privilege
You do not need to put your main private key on a server
Restricted Access
An API Agent key can only place/cancel orders. It CANNOT withdraw funds.
Limited Damage
Even if your trading bot server is hacked, the hacker can only make bad trades, not drain your wallet
Peace of Mind: Even if your trading bot server is hacked and the API key is stolen, the hacker cannot drain your wallet.
6. Bridge Security
The bridge between Arbitrum and Hyperliquid is the most critical component.
One-Way Dependency
Hyperliquid relies on Arbitrum for settlement, but Arbitrum doesn't depend on Hyperliquid
Challenge Period
Withdrawals via official bridge take ~1 day. This delay serves as a security buffer to prevent fake withdrawals.
Emergency Hatch
In case of catastrophic L1 failure, mechanisms exist to allow users to exit positions and reclaim funds on Arbitrum
Validator Slashing
Malicious validators who submit fake withdrawals are caught and slashed during the challenge period
Best Practices for Users
Security is a shared responsibility. Here is how you stay safe:
Use a Hardware Wallet
Connect to Hyperliquid using a Ledger or Trezor via Rabby/MetaMask.
Verify URLs
Always ensure you are on hyperliquid.xyz. Bookmark it to avoid phishing.
Disconnect Agents
Revoke API Agent permissions if you are no longer using a bot.
Ignore Scams
Ignore DMs from fake Support. Hyperliquid support will never ask for your seed phrase.
Security in a Nutshell
- ✓Non-custodial: You control your funds at all times via self-custody
- ✓Decentralized: Global validators run the network, not a single company
- ✓Audited: Core infrastructure has been reviewed by top security firms
- ✓Protected: Real-time risk management and Insurance Fund protect against catastrophic losses
- ✓Resilient: Emergency mechanisms exist to protect users even in worst-case scenarios
Ready to trade on the most secure on-chain exchange?
Start Trading on Hyperliquid