Hyperliquid perps 101

If you're coming from spot trading, perpetual futures — "perps" — can look intimidating. They're not, once you strip away the jargon. This is the short version of everything you need to know to understand what the engine is doing on your behalf.

A perpetual future is a contract that tracks the price of an asset without ever expiring. A normal futures contract settles on a fixed date. A perp just keeps going. That "keeps going forever" property is what makes it convenient for an always-on automated strategy — there's no expiry to roll, no settlement to manage.

Because a perp never settles, something has to keep its price tethered to the real spot price. That something is the funding rate. Periodically, longs pay shorts or shorts pay longs a small amount depending on which side the contract has drifted toward. If the perp trades above spot, longs pay funding, which nudges them to close and pulls the price back. It's an elegant, self-correcting tether — and a real cost or income on any held position, which is why the engine accounts for it rather than ignoring it.

Leverage is the next piece. Perps let you control a position larger than your margin. Used carelessly, leverage is how accounts die. Used deliberately, with hard stops and bounded sizing, it's just capital efficiency — you commit less margin per unit of exposure and keep the rest as buffer. The engine uses leverage within strict, per-plan caps and never sizes past your deployable-capital ceiling.

Now, Hyperliquid specifically. Hyperliquid is a fully on-chain order book — not an AMM, not a centralized exchange with an opaque matching engine. Orders rest on a transparent book, settlement happens on-chain, and your funds stay in your own wallet. That last point is why we built on it: it's what makes genuinely non-custodial automated trading possible. The engine places orders against your wallet through scoped permissions; the venue itself never custodies your coins.

Contracts on Hyperliquid are USDC-margined and unified-account: your USDC acts as collateral across your positions. One important nuance — spot USDC collateralizes perps, so we always talk about it as collateral, not as a separate spot balance you're trading. You're trading perps; the USDC is what backs them.

That's the whole foundation: contracts that don't expire, a funding rate that keeps them honest, bounded leverage for capital efficiency, and an on-chain order book that lets you keep your keys. Everything the engine does sits on top of those four ideas.

Further reading

• Hyperliquid Official Documentation
• Hyperliquid TVL and Protocol Stats — DeFi Llama
• Hyperliquid (HYPE) Token Overview — CoinGecko