0/ Hyperliquid’s liquidator vault democratizes liquidations by letting the community provide collateral for liquidations and share in the P&L. All liquidations happen on-chain and can be tracked on the explorer.
1/ A liquidation occurs when a trader's position is forcibly closed due to insufficient margin to cover unrealized losses. This happens when a trader's position moves against them such that the margin required to maintain it falls below the maintenance margin level of 1%.
2/ Unlike other platforms where the exchange or privileged MMs profit from liquidation flow, liquidations on Hyperliquid are democratized through the liquidator vault, which shares its profits among its depositors.
3/ The liquidator vault allows the community to fund a strategy that benefits from liquidations of overleveraged traders. This results in smoother operations during times of high volatility, with the liquidation profits shared across all users in the vault.
4/ Like all vaults on Hyperliquid, anyone can deposit into the liquidator vault. You can withdraw from the vault after a brief lock-up period. As a note: the liquidator vault only trades when a position is liquidatable and then exits those positions.
5/ Vaults are built natively into the Hyperliquid L1, so strategies running on vaults benefit from the same advanced features as the DEX. By depositing into a vault, you copy all its trades and earn a share of the profits.
6/ You can check the liquidator vault's historic performance and stats, including APY and TVL. When annualizing returns, the calculation uses the maximum of 3 months and the vault’s current lifetime, so returns are less noisy for new vaults. More here: @hyperliquid/the-liquidator-vault-democratized-liquidations-96c07442828f class="text-blue-500 hover:underline" target="_blank" rel="noopener noreferrer">https://medium.com/@hyperliqui...
7/ As of today, all-time ROI is 21% and APY is 120%. These stats are measured for a hypothetical depositor at the creation of the vault held until now. NFA - please do your own research before depositing in a vault. https://app.hyperliquid.xyz/va...
8/ As a reminder, past performance does not guarantee future returns, and this is not financial advice. Stay tuned for more protocol vaults that enable the community to benefit from real yield, which will make Hyperliquid the go-to for both active and passive traders.
@HyperliquidX its simple really.
