Risk Management
HYPE Saver involves several types of risks that users should understand before participating. This page outlines the key risks and how to manage them effectively.
Risk Categories
Asset/Protocol Risk
What this means:- Dependency on Hyperliquid's continued operation
- Smart contract risks in the underlying protocols
- Potential technical failures or bugs
Entry Risk
Key considerations:- No slippage on entry due to fixed rates
- Positions are created at predictable rates
- Large positions don't affect entry pricing
Exit Risk
Mitigation strategies:- Monitor market conditions before exiting
- Consider timing your exit during favorable market conditions
- Use smaller position sizes to reduce market impact
Liquidation Risk
Best practices:- Maintain a healthy safety ratio
- Monitor your positions regularly
- Keep extra collateral as a buffer
- Understand liquidation thresholds
Money Market Exposure
This reduces counterparty risk as your collateral isn't lent out to other users.
Market Utilization Risk
Factors to consider:- Current market utilization levels
- Your position size relative to total liquidity
- Potential impact on borrowing rates
- Long-term liquidity sustainability
Oracle Risk
Advantages:- Direct integration with source contracts
- Reduced third-party oracle dependencies
- Lower risk of price manipulation
- Protection against depeg scenarios
Risk Management Best Practices
- Monitor Safety Ratios: Keep your safety ratio well above liquidation thresholds
- Diversify Positions: Don't put all capital into a single leveraged position
- Stay Informed: Monitor market conditions and protocol updates
- Plan Your Exit: Have a clear exit strategy before entering positions