How does Hyperliquid's liquidation mechanism compare to centralized exchanges?

Hyperliquid, a decentralized perpetual futures exchange, uses an on-chain liquidation system where positions are automatically closed when collateral falls below maintenance requirements. Unlike centralized exchanges like Binance or Bybit, Hyperliquid's liquidations are transparent and executed by smart contracts rather than company servers. Both systems trigger at similar thresholds, but Hyperliquid offers lower liquidation fees (around 2.5%) compared to centralized platforms (typically 5%). Decentralized liquidations can't be front-run by the exchange itself, reducing insider trading risks. However, network congestion may cause delayed execution during volatile markets. Centralized exchanges provide faster liquidations but require trusting the platform with your funds.