What happens when a mirrored leader gets liquidated
Liquidation is the failure mode that cannot be engineered away. Perpetual futures are leveraged instruments, and the only meaningful design question is how far the damage travels when it happens.
In short
If a mirrored leader is liquidated, your corresponding sleeve is exposed to the same adverse move and can be liquidated too. Because each leader runs in one Hyperliquid sub-account per mirrored leader, the loss consumes that sub-account's margin and stops there — other leaders' collateral and positions are untouched. A liquidated or dormant leader is then handled by the replacement policy.
At a glance
Liquidation of a mirrored leader: what is affected and what is not.
Area
Effect
Why
That leader's sleeve
EffectPosition closed, margin consumed
WhyLiquidated on its own margin by the exchange
Other sleeves
EffectUntouched
WhySeparate sub-account, separate margin
Your custody
EffectUnchanged
WhyTrade-only approval; funds never move
Basket membership
EffectEmergency removal likely
WhyHard triggers act immediately
Your remaining capital
EffectStill yours, still in your account
WhyNo pooling, no shared collateral
How liquidation reaches you at all
Your sleeve holds its own position, in your own sub-account, opened after the leader's. It is liquidated by Hyperliquid's liquidation engine on its own margin and mark price — not because the leader was liquidated, but because the same adverse move hit a similarly directed position.
This means the outcomes are related but not identical. Your entry price, your leverage after the cap, and your sleeve's margin all differ from theirs, so your sleeve can survive a move that liquidated the leader, or fail on a move they survived.
What isolation contains, precisely
A liquidation in one sub-account consumes that sub-account's margin. It does not reach across to another leader's collateral, does not force closes elsewhere in the book, and does not net against another sleeve's profitable position.
That containment is the strongest structural protection in the framework, and it is only containment. The capital allocated to that sleeve can be lost in full.
Blast radius: one sub-account, by construction.
Other sleeves keep their own margin and positions.
Custody is unaffected — Non-custodial — funds stay in the user's own Hyperliquid account.
Nothing about liquidation gives anyone withdrawal rights.
Why the loss can exceed the modelled level
Liquidation executes into the book. In fast or thin markets it can fill worse than the theoretical liquidation price, and in stressed conditions auto-deleveraging can close positions to protect the system. Neither the timing nor the price is under your control or ours.
Leverage compresses the distance to that point. A cap increases the adverse move required to reach it; it does not remove the possibility.
What you see, and what happens next
In the dashboard the affected sleeve shows the position closed and its margin consumed. Because results are attributable per leader, the event is traceable to a specific sleeve rather than appearing as an unexplained drop in one netted account.
On the policy side, a leader who has been liquidated typically trips a hard trigger: Account value falls below roughly $1,000. Emergency conditions remove a leader immediately rather than waiting for a strike cycle.
What to do — and what not to
Do read it as one sleeve's realised loss, which is what isolation makes it. Do check portfolio heat if several sleeves were positioned in the same market, because that is the correlated case rather than the idiosyncratic one. Do reduce account capital if the sleeve loss was larger in absolute terms than you are willing to repeat.
Do not close the remaining sleeves in reaction. Isolation exists so one leader's failure is one sleeve's failure, and exiting the whole book converts a bounded loss into a realised loss across positions that were not affected.
Past performance is not indicative of future results. Perpetual futures are leveraged instruments and carry a substantial risk of loss, including the loss of your entire position.
Methodology
Scoring and replacement are documented in full on How it works and in the Docs (Policy v3). In short: the Elite basket is sticky, emergencies remove a leader immediately, and soft issues accrue at most one strike per UTC day with three strike-days triggering replacement. Read how it works or the documentation for the full table.
Questions
Frequently asked
Can one liquidation wipe out my whole account?
Isolation confines it to the affected leader's sub-account, so other sleeves keep their margin and positions. The capital in the affected sleeve can be lost in full.
Will my sleeve always be liquidated if the leader is?
Not necessarily. Your entry price, capped leverage and sleeve margin differ from theirs, so outcomes are related but not identical in either direction.
Is the leader removed from the basket?
A liquidated leader typically trips an emergency condition — such as account value falling below roughly $1,000 — which removes them immediately rather than after a strike cycle.
Does HyperMirror control the liquidation?
No. Liquidation is executed by Hyperliquid's own engine on mark price and maintenance margin. We hold a trade-only approval and cannot intervene in it.
