Avail launches ShieldTX privacy tool for Hyperliquid traders

On Hyperliquid, every trade is public. That is the point of a fully on-chain exchange, and also the problem.

Avail has launched ShieldTX, a privacy tool that opens each perpetual futures position on Hyperliquid through its own separate wallet. The goal is to break the trail that copy-trading bots use to shadow successful traders.

How ShieldTX works

The setup starts with a deposit. Traders put USDC into a vault on Arbitrum, which becomes a shielded balance.

From there, ShieldTX spins up new Hyperliquid accounts on demand. Each position draws funding from the shielded balance through one of these fresh, unlinkable wallets.

The result is that the direct on-chain connection between a trader’s funding wallet and their individual positions disappears. An observer can see a position appear on the order book. Tracing it back to the capital behind it becomes much harder.

Importantly, the trades themselves still execute natively on Hyperliquid’s order book. ShieldTX hides who is trading, not the trading itself, so positions still hit the same liquidity as everyone else.

Under the hood, the tool runs on Avail’s Nightshade zkAppchain. That is a zero-knowledge application-specific chain that uses what Avail describes as a commit-first, prove-later architecture, with settlement on Arbitrum.

Put more simply: the system records actions first and produces cryptographic proofs that they were valid afterward. Zero-knowledge proofs let a system confirm something is correct without revealing the underlying details, which is exactly the property a privacy tool wants.

The copy-trading problem

Hyperliquid’s appeal rests on transparency. It runs a fully on-chain central limit order book for perpetual futures, so wallet activity is visible to anyone who looks.

Bots have been looking. Copy-trading bots monitor publicly visible Hyperliquid wallets, spot positions from traders with good track records, and open similar trades within seconds.

For the trader being copied, that is not flattering imitation. When a crowd of bots piles into the same direction right behind you, the market can move before you finish building or unwinding your position, potentially leaving you with worse execution prices.

ShieldTX’s answer is to make positions hard to stitch together. If every trade comes from a new wallet, a bot cannot easily tell that the position it just saw belongs to the same trader who nailed the last five.

Markets, leverage and fees

ShieldTX supports all Hyperliquid perpetual markets, with leverage of up to 40x.

The pricing comes in layers. Traders pay 5 basis points of notional value, plus $1 to open a position and roughly $2 for closes sent to external wallets.

A basis point is one hundredth of a percent, so 5 basis points works out to 0.05% of the position size. On a large trade, that fee is the meaningful number; the fixed charges matter more for smaller positions.

Avail is pitching the cost as a net saving. Early analyses from the Avail team suggest traders may save up to 25 basis points per transaction by reducing the impact of copy-trading bots.

If that estimate holds, the math looks attractive: pay 5 basis points to potentially avoid up to 25. That is still Avail’s own figure, though, and actual results will depend on how much a given trader is being followed in the first place.

Traders who nobody is copying have little front-running to escape. For them, ShieldTX is mostly an added cost with a privacy benefit attached.

Early traction

ShieldTX has processed over $2.5 million in trading volume during its private beta.

That is a modest figure next to Hyperliquid’s broader activity, but it is a starting point for a product aimed at a specific audience. Avail is targeting professional traders and institutions, the groups most likely to have strategies worth copying and positions large enough to suffer from slippage.

Why it matters

Public blockchains created an odd situation for serious traders. In traditional finance, a fund’s live positions are closely guarded. On a transparent on-chain exchange, they are visible to anyone with a block explorer and a script.

ShieldTX tries to split the difference. It keeps execution on Hyperliquid’s public order book while obscuring the link between positions and the person funding them.

There are open questions worth watching. The first is whether bots adapt, since sophisticated operators may look for other signals, such as timing patterns or deposit behavior, to try to reconnect the dots.

The second is adoption. A shielded pool generally works better the more people use it, because a larger crowd makes any single participant harder to pick out. A beta volume of $2.5 million suggests the crowd is still small.

The third is cost discipline. The fixed fees and the 5 basis point charge add up for active traders, so the product’s value proposition rests heavily on whether the savings Avail projects show up in real execution data.