Hyperliquid Portfolio Margin: Borrowing, Carry Trades, and Liquidation
Summary
The document explains how Hyperliquid portfolio margin combines spot balances, perpetual positions, and borrowing within one account. Eligible collateral receives a loan-to-value limit; when balances are insufficient for orders, the system can borrow against that collateral. Borrowed assets accrue interest, while idle supplied assets earn interest under the same rate, which varies with stablecoin utilization. The feature also supports supplying eligible quote assets for yield.
A carry-trade example pairs spot BTC with a short BTC perpetual position and explains how their profit and loss offset for account margining as prices move. Funding, borrowing costs, and spot-perpetual price drift remain relevant. Liquidation is based on the portfolio’s maintenance requirement and a portfolio margin ratio threshold; the document describes partial or full backstop takeovers and warns that the liquidation order can vary with oracle updates. Account eligibility, borrow caps, collateral limits, and the stated threshold and rates constrain the feature. These are protocol mechanics, not evidence that a carry trade is profitable or immune to liquidation.
Key ideas
- Portfolio margin combines eligible spot collateral and cross-margined perpetual positions within an account.
- Insufficient balances may be borrowed against eligible collateral up to its loan-to-value limit.
- Borrowed assets accrue interest, while idle supplied assets can earn interest tied to utilization.
- Spot and perpetual profit and loss can offset in a carry trade, but funding, interest, and price drift remain.
- Liquidation depends on portfolio health, and the takeover sequence may vary with oracle updates.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.