Market making on Hyperliquid

The economics

You quote a bid below and an ask above the mid price. When both fill, you capture the spread; between fills you hold inventory that can move against you. On Hyperliquid perps the maker fee depends on your 14-day weighted volume (perps + 2 × spot):

Makers with a large share of total maker volume over 14 days earn rebates: −0.001% above 0.5%, −0.002% above 1.5% and −0.003% above 3%. HYPE staking discounts and aligned quote assets can improve this further. See Hyperliquid fees.

Worked example

You quote $5,000 on each side of a market with a 0.05% spread, and both sides fill once.

• Spread captured: 0.05% × $5,000 = $2.50
• Maker fees at the base tier: 0.015% × $10,000 = $1.50, net $1.00
• At the >$500M tier (0% maker): net $2.50; with the top −0.003% rebate, $2.80.
• If price moves 1% while you hold $5,000 of inventory: −$50, the profit of 50 base-tier round trips.

That last line is the business. Retail-sized market making at the base tier with a tight spread rarely survives adverse selection: you get filled most when informed traders know price is about to move. Model fee tiers with the fee calculator.

Practical details

• Post-only (ALO) orders never take liquidity, so you never pay taker fees by accident.
• Rate limits: each address gets 1 action per 1 USDC traded since inception, plus an initial buffer of 10,000. When limited, it gets one request every 10 seconds; cancels have a higher limit. IP limits apply to REST and websocket traffic.
• Open orders: 1,000 by default, plus one per $5M of volume, up to 5,000.
• Self-trade prevention: if your own orders would match, the resting order is cancelled with no fee ("expire maker").
• Account mode: the docs recommend the Standard (manual) account mode for market makers and high-volume automated users. Unified and portfolio margin modes are limited to 50,000 user actions per day.
• Use an API (agent) wallet for bots so the main key never sits on a server.

Risks

• Inventory risk: hedge or skew quotes when inventory builds; keep leverage low and know your liquidation price.
• Adverse selection and latency: professional firms with faster infrastructure will pick off stale quotes.
• Thin or new markets: wider spreads look attractive but come with manipulation risk, as the JELLY episode in March 2025 showed.
• Bugs: a runaway bot can lose money faster than you can react. Add hard position and loss limits in code.

Spot and HIP-3 markets

Spot fees are higher than perp fees (maker 0.040% and taker 0.070% at the base tier), so spreads need to be wider for spot market making to break even. Markets deployed under HIP-3 can carry different fees set partly by their deployers, and some run in a reduced-fee growth mode. Check the fee on each market before quoting.

The passive alternative

HLP is Hyperliquid's community-owned vault that runs market-making strategies and liquidations. Depositing there gives exposure to market-making returns without running a bot, with a 4-day lockup and real drawdown risk.

Frequently asked questions