Blockchain research firm L2BEAT published a comparative analysis of perpetual futures exchanges Hyperliquid and Lighter on July 2. In its findings, the research firm discovered that none of the platforms fully protects traders through verifiable math alone.
The report matters to anyone trading leveraged crypto derivatives on venues that market themselves as decentralized alternatives to the likes of Binance or Bybit.
Are perpetual DEXs delivering on all their promises?
Perpetual DEXs claim to offer custody over user collateral, and execution can be verified independently, according to L2BEAT’s research. The firm evaluated Hyperliquid and Lighter across property rights, order fairness, and position fairness.
Lighter operates as an Ethereum layer-2, posting validity proofs to a chain it does not control.
Hyperliquid, on the other hand, runs its own layer-1, where 28 validators handle both trade execution and settlement. The Hyperliquid Foundation directly controls half the staked tokens, with additional stake routed through a delegation program.
Should Lighter stop working, users are not necessarily left in limbo, as they can generate an account proof against the latest state root on Ethereum and withdraw funds independently.
If the same thing happened to Hyperliquid, L2BEAT reports that there is no permissionless exit path because the platform’s Arbitrum bridge relies on permissioned validator subsets (two groups of four validators each).
Do the validity proofs on Lighter and Hyperliquid have limits?
Lighter runs on zero-knowledge proofs, which means that operators cannot steal idle funds, fabricate USDC balances, or match orders at prices worse than the user’s limit. Similar standards on Hyperliquid are up to validator consensus.
However, L2BEAT’s analysis shows Lighter’s proofs are not evidence of full protection. The research firm discovered that oracle signatures used for mark prices are not verified on-chain or within the proof circuit.
On both platforms, order flow protections are absent. Neither venue prevents the operator from seeing, reordering, front-running, or censoring submitted orders, L2BEAT stated.
Lighter’s proofs guarantee that once an order enters the system, it cannot be altered in price or size. But the operator can insert its own orders ahead of users to become the best quote on the book.
What precedent did the JELLY incident set?
In March 2025, Hyperliquid had to carry out an operator intervention during the JELLY incident. It all started after three coordinated accounts opened opposing positions in the low-liquidity JELLY token. One of the accounts took a $4.1 million short while the other two went long for a combined $4.05 million.
As spot purchases pushed JELLY’s price up, the short position was liquidated and passed to Hyperliquid’s automated market-making vault (HLP), which could not absorb it.
Hyperliquid’s validators voted to delist JELLY and force-settled all positions at $0.0095, which is a fraction of the $0.50 price on decentralized spot markets at the time.
While that action saved the HLP vault from an estimated $13 million loss, it overrode the exchange’s own matching engine. The Hyper Foundation pledged to compensate affected users.
Based on L2BEAT’s analysis, Hyperliquid’s validator acts in ways that are similar to a traditional exchange operator, as they have the power to change trade outcomes through governance.
Lighter’s current contract setup also permits such action through upgradeable contracts with no time delay.
The trust ceiling
The core finding is that both platforms currently require trust in their operators for critical functions. Lighter’s advantage is in its L2 architecture, which could eventually reach Stage 2 decentralization by removing upgrade control, at which point Ethereum’s validator set would enforce the rules.
Hyperliquid’s L1 design means it does not have a similar path to Lighter’s.
The L2BEAT report has brought to the fore the depth of how decentralized these platforms are in terms of protection, and users using them should know the full extent of what is covered and areas where the lines blur between their chosen platforms and centralized exchanges.
