●Hyperliquid activates Cross-Margin Auto-Deleveraging to handle insolvent positions
●Mechanism engages when HLP vault liquidity is insufficient to absorb liquidations
●Ensures platform solvency by deleveraging opposing profitable positions
Hyperliquid has activated Cross-Margin Auto-Deleveraging (ADL) for the first time. This mechanism is designed to protect the solvency of the exchange when the Hyperliquidity Provider (HLP) vault cannot absorb liquidated positions due to insufficient liquidity.
The system functions as a safeguard where opposing profitable positions are automatically deleveraged to cover bankrupt positions. This ensures the platform's stability during periods of extreme volatility where market liquidity is scarce.