Frequently Asked Questions about Hyperliquid Perpetuals on Gem Wallet
Disclaimer: This article is a work in progress and may contain incomplete or unverified information.
Hyperliquid Perpetuals Integration on Gem Wallet
Gem Wallet provides seamless integration with Hyperliquid, a decentralized perpetual futures exchange built on its own Layer-1 blockchain. This allows users to trade perpetual contracts directly within the wallet, offering high-speed, on-chain execution for speculating on asset prices without expiration dates. Below, we've defined key terms related to this integration to help users understand the features and mechanics. These definitions are tailored to perpetual futures trading on Hyperliquid via Gem Wallet.
What is a Perpetual Open Position?
A Perpetual Open Position refers to an active trade you've initiated in a perpetual futures contract on Hyperliquid. It involves taking a long (betting on price increase) or short (betting on price decrease) stance on an underlying asset or index without an expiration date. In Gem Wallet, opening a position requires selecting leverage, depositing collateral (margin), and executing the order on-chain. For example, you might open a position on BTC-USD with 10x leverage using USDC as collateral.
What is a Perpetual Close Position?
A Perpetual Close Position is the action of ending an open trade to realize profits or cut losses. This can be done manually by placing an offsetting order (e.g., selling if you were long) or automatically via liquidation. In the Gem Wallet integration, closing a position settles on Hyperliquid's blockchain, returning any remaining collateral minus fees or funding payments.
What is a Perpetual Open Interest?
Perpetual Open Interest represents the total value of all outstanding (unsettled) perpetual contracts on Hyperliquid for a specific market. It indicates market participation and liquidity—higher open interest often means better trading conditions with tighter spreads. In Gem Wallet, you can view open interest metrics to gauge market depth before entering trades.
What is Perpetual Funding?
Perpetual Funding is the mechanism that keeps the perpetual contract price aligned with the underlying spot or index price. On Hyperliquid, it involves hourly adjustments based on the difference between the contract's mark price and the oracle price (a median from sources like validators, exchanges, and EMAs). This prevents divergence and mimics traditional futures without physical delivery.
What is Perpetual Funding Payments?
Perpetual Funding Payments are the periodic transfers between long and short position holders to enforce the funding mechanism. If the funding rate is positive (contract price > spot), longs pay shorts; if negative, shorts pay longs. On Hyperliquid via Gem Wallet, these occur every hour and are automatically deducted from or added to your position's margin, affecting your overall profitability.
What is a Perpetual Liquidation Price?
A Perpetual Liquidation Price is the asset price at which your position would be forcibly closed by Hyperliquid to prevent further losses if your margin falls below the maintenance requirement (typically 50% on Hyperliquid). It's calculated based on entry price, leverage, and collateral. In Gem Wallet, this is displayed as an "Estimated Liquidation Price" to help monitor risk—staying above/below it (for long/short) avoids liquidation.
What is Perpetual Leverage?
Perpetual Leverage is the multiplier that amplifies your trading exposure using borrowed funds from the platform. On Hyperliquid, you can select up to 50x leverage, meaning a small collateral amount controls a much larger position (e.g., 1 USDC collateral at 20x controls 20 USDC worth of assets). In Gem Wallet, leverage is chosen per trade, boosting potential returns but also risks like faster liquidations.
For more details on using these features in Gem Wallet, refer to the official integration guides or Hyperliquid's documentation. Always trade responsibly, as perpetuals involve high risk due to leverage and volatility.