Avail launches ShieldTX privacy tool targeting copy-trading bots on Hyperliquid

Avail has launched ShieldTX for traders on Hyperliquid, with each perpetual futures position opened through a separate wallet. 

Copy-trading bots can follow trades from publicly visible Hyperliquid wallets and open similar positions within seconds, potentially giving the original traders worse execution prices. ShieldTX makes it harder for bots to link one position to the next.

In a review shared exclusively with The Block ahead of the launch, ShieldTX examined 332,317 wallets that traded on Hyperliquid over 30 days. ShieldTX randomly selected seven traders from the platform's top 100, then looked at 25 wallets that appeared to follow each of them. It flagged potential copiers that matched a trader's coin and long or short position within 60 seconds at least 10 times over the 30-day period.

ShieldTX measured the difference between the copiers' fill prices and those of the traders they followed, Anurag Arjun, the Polygon co-founder who led Avail after it spun out of Polygon in 2023, told The Block. ShieldTX compared price movements during trades that attracted copy-traders with those that didn't, accounting for coin, size, and volatility, and put the added execution cost for the traders being copied at a median of 63 basis points per trade.

Of the top 150 accounts on Hyperliquid's leaderboard, 29% use subaccounts, according to ShieldTX's analysis. Traders can place orders from different wallets using these accounts, but the wallets are still transparently linked onchain, it said.

"We thought we had sufficient privacy by rotating wallets," the founder of an unnamed digital-asset fund using ShieldTX said in a statement. "We had no idea the wallets had already been linked to us and were being actively copied."

Using the same analysis, ShieldTX also offers a scanner that lets traders see which wallets may be copying them. Avail said publicly identifiable wallets can also expose a fund's hedging activity or reveal new trading strategies to competitors.

Separate wallets for each position

ShieldTX holds deposited funds in a vault contract on Arbitrum. When a trader opens a position, the service creates a new Hyperliquid wallet and places the trade through it. Avail said other third-party shielding services typically use a single wallet for each trader, making their trades and profit and loss public. Instead, ShieldTX gives traders a new wallet for every position while keeping everything under one account. The positions themselves are still visible on Hyperliquid, but aren't directly linked onchain to the trader's original wallet.

Once a position closes, the proceeds go back into the user's shielded balance. Traders can withdraw the funds or use them again, and still have access to their full trading history for audits and compliance. Arjun said Avail has conducted multiple internal audits for ShieldTX alongside external security consultants, with a full audit underway.

Avail has been testing ShieldTX with a small group of Hyperliquid whales, trading desks and funds since July, and is now opening broader access via an invite-code model, with discounts extended to AVAIL (AVAIL) stakers. That private beta involved 75 traders, generated approximately $50 million in trading volume, and created more than 3,800 wallets, according to Arjun. 

Beta traders successfully avoided copy-trading bots using the service, Arjun said, though he did not provide a comparison of their execution costs before and after.

ShieldTX is targeting wallets trading $500,000 or more, along with apps using Hyperliquid builder codes, and runs on Nightshade, Avail's zero-knowledge privacy infrastructure.

"We built Nightshade because privacy is essential infrastructure for onchain markets," Arjun said in the statement. "We built ShieldTX for Hyperliquid because traders there have limited privacy and that gap is being exploited by onchain surveillance tools, which costs traders directly."

Avail has spoken with traders and developers across the Hyperliquid ecosystem and shared information about ShieldTX through ecosystem contacts, although Hyperliquid's core team was not directly involved in its development, Arjun confirmed.

Other perpetuals trading platforms have recently introduced privacy features, including Hyperliquid rival Aster, which launched a privacy-enabled blockchain for its derivatives platform in March. StarkWare also launched OffMarket earlier this month, allowing Polymarket users to trade without publicly linking their positions to existing accounts.