If you’ve been in offshore FX long enough, you’ve probably asked yourself this:

“When I lose, who’s on the other side profiting from it?”

Hyperliquid — a next-gen decentralized exchange — answers that question in the most transparent, brutal way possible.
And more importantly, it allows you to be on that other side.

This article will break down how Hyperliquid’s HLP (Hyperliquid Liquidity Providers) work, how they compare to traditional market makers, and what would happen if a typical FX broker adopted the same model.

■ What is HLP? — A Vault That Bets Against Traders

HLP is the beating heart of Hyperliquid’s liquidity system.
Put simply, it’s a decentralized vault that automatically takes the opposite side of every trader’s position.

If a trader goes long, HLP takes the short.
If the trader wins, HLP loses — and vice versa.

By investing in HLP, you are essentially taking the other side of retail traders as a group.
You’re not providing passive liquidity — you’re actively betting against the crowd.

■ HLP vs. Offshore FX Brokers

● Offshore FX Brokers (especially DD model)

• Trader losses = Broker profits
• Trader wins = Broker losses
• Operations are a black box
• You can’t invest in the broker’s internal book

● HLP (Hyperliquid)

• Trader losses = HLP profits (shared with LPs like you)
• Trader wins = HLP Vault balance decreases
• All data is on-chain and fully transparent
• Anyone can participate in HLP by depositing assets

■ How HLP Makes Money

HLP’s profit sources include:

1. Trader losses
   Since HLP always takes the opposite side, it benefits when traders lose.
2. Funding fees
   Traders pay funding to maintain positions, which flows to HLP.
3. Trading & liquidation fees
   HLP earns a share of these small, consistent revenue streams.

But there’s risk.
If all traders go long and the market rallies, HLP’s short exposure results in significant losses — and fees alone won’t cover that.

■ Is HLP Ever Liquidated?

FX traders are conditioned to think in terms of margin calls and liquidation.
But HLP works differently:

• No margin call or maintenance ratio
• Losses reduce the Vault balance, not individual positions
• HLP only stops functioning if its entire balance hits zero (highly unlikely)

So it’s resilient — but not invincible.
You can survive big losses, but your share of the Vault may drop significantly.

■ When Does HLP Become Risky?

Watch out for these signs:

• All traders are positioned the same way (e.g. everyone goes long)
• The Vault’s net exposure is heavily biased (e.g. net short)
• Massive trader wins in a short time frame
• TVL (total value locked) is dropping fast

In contrast, when traders are being liquidated or panic-selling, HLP tends to profit the most.

■ What Should You Check Before Joining HLP?

Here are the most important metrics:

• TVL (Total Value Locked in the Vault)
• Cumulative PnL (profit and loss over time)
• Net exposure (long/short imbalance)
• Trader win rate trends
• Funding & fee revenue breakdown

You can track these at:
→ https://stats.hyperliquid.xyz

■ What If an FX Broker Used HLP’s Model?

● Pros:

• A new type of “bet against the traders” investment product
• Transparency for all position flows
• Investors earn from retail losses — not just fees

● But in reality:

• Illegal in many jurisdictions
• Brokers don’t want to take risk; they want fee-based profits
• Infrastructure and compliance requirements are extremely high

In short: revolutionary, but impractical in TradFi.

■ What Should You Do?

Simple answer: join the other side.

You’ve seen how offshore brokers profit from losing traders.
Now you can take part in that — without running your own broker.

Deposit into the HLP Vault here:
→ https://app.hyperliquid.xyz/join/MATSUBARA

All data is public. Nothing is hidden.

■ Final Thoughts

If you’ve spent time battling in offshore FX, HLP will feel like peering behind the curtain.

All the shady mechanisms —
the slippage, the stop hunts, the price spikes —
here, it’s laid bare. And now, it’s programmable.

Hyperliquid isn’t just another DEX.
It’s a way to trade against the entire market — and finally, get paid for it.