BeaconMark Price Definition
Mark price is a calculated fair value price used by perpetual futures exchanges to determine unrealized profit and loss (PnL), margin requirements, and most importantly, liquidation triggers. It is not the same as the last traded price on the exchange - it is a more stable and manipulation-resistant reference price.
The core purpose of mark price is to prevent unfair liquidations. Without it, a single large market order could temporarily crash the price on one exchange, triggering cascading liquidations of otherwise healthy positions. Mark price anchors to external reference data, making such manipulation impractical.
How Mark Price Is Calculated
Mark price is typically derived from two components: the index price and a basis (premium or discount). The index price is a weighted average of spot prices from multiple major exchanges, providing a reliable reference for the asset's true market value. The basis accounts for the difference between the perpetual contract price and the spot price.
On most exchanges including Hyperliquid, the formula looks something like: Mark Price = Index Price + Decaying Moving Average of (Contract Price - Index Price). The decaying average ensures that temporary spikes in the contract price do not immediately shift the mark price, providing a buffer against manipulation and flash crashes.
The specific parameters - decay rate, index sources, and weighting methodology - vary by exchange and by asset. Exchanges publish these parameters so traders can understand exactly how their positions are being valued and when liquidation would occur.
Why Mark Price Matters for Liquidation
Liquidation is the process by which an exchange force-closes a position when the trader's margin is no longer sufficient to cover potential losses. The critical question is: what price is used to determine when that threshold is crossed? The answer is mark price.
Consider this scenario: you have a long BTC position, and someone places a massive sell order that temporarily pushes the last traded price down 5%. If liquidation were based on last traded price, your position might be closed at the bottom of that temporary dip. But because liquidation is based on mark price - which remains stable because the broader market (index) has not moved - your position survives the artificial price spike.
This protection is especially valuable in crypto markets, which can experience violent short-term price movements due to lower liquidity compared to traditional markets. Mark price is your shield against being liquidated by noise rather than genuine market moves. You can check your liquidation price against mark price using our liquidation calculator.
Mark Price vs Last Price vs Index Price
Last price is the price at which the most recent trade was executed on the exchange. It changes with every trade and can be volatile, especially in thin markets. It is used for calculating realized PnL when you actually close a position.
Index price is the weighted average spot price from multiple exchanges. It represents the consensus market price across the broader ecosystem. It is the foundation upon which mark price is built.
Mark price combines the index price with the perpetual contract's premium or discount. It is the most important price for managing risk because it determines your unrealized PnL, maintenance margin requirements, and liquidation thresholds. In normal market conditions, all three prices are very close to each other. They diverge during periods of high volatility or low liquidity.
Mark Price on Hyperliquid
Hyperliquid calculates mark price using oracle feeds from providers like Pyth Network. For crypto assets, these oracles aggregate price data from multiple major centralized and decentralized exchanges. For stock perpetual futures, the oracle provides real-time stock prices during market hours and fixes to the closing price outside market hours.
The mark price is displayed prominently in the Beacon trading interface alongside the last traded price. When you hover over a position, you can see both your PnL based on mark price (used for margin calculations) and the estimated PnL you would realize if you closed at the current market price. Understanding this distinction is essential for managing leveraged positions effectively.