Slashing Risk

What is Slashing?

Slashing is HIP-3's primary enforcement mechanism for ensuring builders maintain market integrity. When builders deploy perpetual markets on Hyperliquid, their 1 million HYPE stake serves as collateral that can be partially or fully slashed for protocol violations.

Slashing Conditions

According to Hyperliquid's HIP-3 documentation, slashing may occur for:

• Oracle manipulation or prolonged oracle failure

• Malicious market parameter updates

• Failure to maintain required infrastructure

• Actions that compromise market integrity

Impact on Traders

If ChainSight's stake is slashed:

• Markets may be paused or delisted

• Open positions would follow Hyperliquid's standard settlement procedures

• Traders maintain custody of their collateral in Hyperliquid's smart contracts

Mitigation

ChainSight implements redundant oracle systems and monitoring infrastructure to prevent slashing events. However, traders should understand that builder slashing remains a protocol-level risk.

For complete slashing parameters, refer to Hyperliquid's HIP-3 documentation