Avail has opened access to ShieldTX, a privacy layer for Hyperliquid traders that assigns a new wallet to each perpetual futures position, aiming to make it harder for copy-trading bots to identify and mirror a trader’s activity in real time.
The product addresses a trade-off built into transparent onchain derivatives venues: public positions and order activity can help users verify markets, but they can also expose profitable wallets to rapid-following strategies. ShieldTX says its analysis of Hyperliquid activity found that traders whose positions appeared to be copied experienced a median execution loss of 63 basis points per trade over a 30-day sample.
ShieldTX is built by Avail, the blockchain project led by Polygon co-founder Anurag Arjun after it became an independent company in 2023. Hyperliquid’s core team was not directly involved in the tool’s development, according to Arjun.
Wallet-per-position model seeks to break visible trading patterns
ShieldTX deposits user funds into a vault contract on Arbitrum, then creates a separate Hyperliquid wallet whenever the user opens a new position. The position remains visible on Hyperliquid, where trading and liquidation mechanics continue to operate normally, but it is not directly connected onchain to the user’s primary wallet.
When a position closes, proceeds return to the trader’s ShieldTX balance. Users can then withdraw funds, deploy the balance into another trade, or review their full trading record through the service’s interface.
The structure is designed to make wallet-based tracking less effective. A bot that monitors a known trader’s public address can often detect new positions, changes in exposure, or recurring entries. If each trade originates from a newly created wallet, the observer would need to establish a fresh link between that wallet and the trader before acting on the information.
That does not make a position invisible. Hyperliquid users can still see the individual wallet’s activity, including the market being traded and the position direction. ShieldTX’s approach instead removes the easily identifiable relationship between a trader’s established address and the wallet executing a particular order.
The service runs on Nightshade, Avail’s zero-knowledge privacy system. Zero-knowledge technology allows a system to prove that a transaction or action is valid without exposing all underlying information to outside observers.
ShieldTX estimates copy traders impose execution costs
ShieldTX based its estimate of copy-trading costs on an analysis of 332,317 wallets that traded on Hyperliquid during a 30-day period. The project randomly selected seven traders from the platform’s top 100 accounts and examined 25 wallets that appeared to follow each selected trader.
A wallet was classified as a potential copier if it traded the same asset in the same long or short direction as the target wallet within 60 seconds on at least 10 occasions during the period.
Using that definition, ShieldTX estimated a median execution loss of 63 basis points for the copied traders. One basis point equals one-hundredth of a percentage point, making 63 basis points equal to 0.63%.
Arjun said the calculation compared the fill prices received by suspected copiers with those received by the traders they followed. ShieldTX also compared price movements in trades that appeared to attract copying activity against trades that did not, controlling for the coin traded, order size and volatility.
The estimate should be read as a measurement of the sample and methodology used by ShieldTX rather than a universal cost for every active Hyperliquid wallet. Fast-following activity can vary significantly by market liquidity, trade size, the public prominence of a wallet and the time required for a copier to react.
Yet the findings illustrate why transparent derivatives activity can become costly for traders whose wallets have developed a public following. In fast-moving perpetual futures markets, a copier entering seconds later can shift available liquidity and worsen the execution price of the original order, particularly in smaller or more volatile markets.
Subaccounts provide separation but retain public links
ShieldTX said 29% of the top 150 accounts on Hyperliquid’s leaderboard use subaccounts. Those arrangements allow traders to place orders from multiple wallets, but the wallets remain transparently associated onchain.
That distinction limits their usefulness for traders seeking to avoid attribution. A trader can separate strategies, teams or accounts through subaccounts while still leaving a publicly observable map of the relationship between them.
ShieldTX’s wallet-per-position model is intended to offer more granular separation. Rather than assigning one additional wallet to a strategy, it produces a distinct wallet for each individual position. The trade can therefore be visible without immediately revealing which recognized account initiated it.
The design could be particularly relevant for traders who routinely trade large positions or whose wallets are watched by automated services. It also targets applications using Hyperliquid builder codes, which can direct trading activity through affiliated interfaces.
Scanner offers public view of suspected copying
Alongside the trading tool, ShieldTX has released a public scanner at scanner.shieldtx.xyz. The scanner allows users to enter a wallet address and review wallets that may be following its trades under ShieldTX’s detection framework.
The scanner cannot establish intent on its own. Two wallets can make similar trades within a short period because they use the same market signals, respond to the same news, or follow a public trading thesis. ShieldTX’s threshold of repeated same-direction trades within 60 seconds is intended to identify patterns that appear more systematic than isolated overlap.
Testing began in July with a limited user group. According to Arjun, ShieldTX’s private beta involved 75 traders, generated about $50 million in trading volume and created more than 3,800 wallets.
Access is now expanding through an invite-code system at shieldtx.xyz/request-access. Avail stakers are eligible for discounts, according to ShieldTX. The rollout gives high-volume Hyperliquid users a tool for limiting address-level exposure while preserving a record of their trading activity for audits and compliance.
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