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The onchain Perp DEX depends on the correctness and security of the Arbitrum bridge smart contracts. Bugs or vulnerabilities in the smart contracts could result in the loss of user funds.
Hyperliquid runs on its own L1 which has not undergone as extensive testing and scrutiny as other established L1s like Ethereum. The network maybe experience downtime due to consensus or other issues.
As a relatively new protocol, there could be a potential risk of low liquidity, especially in the early stages. This can lead to significant price slippage for traders, negatively affecting the overall trading experience and possibly leading to substantial losses.
Hyperliquid relies on price oracles maintained by the validators to supply market data. If an oracle is compromised or manipulated for an extended period of time, the mark price could be effected and liquidations could occur before the price reverts to its fair value.