Account System Security Enhancement

1. HyperLiquid Account Hierarchy

LeverAcc enhances HyperLiquid's native account structure through a multi-layered security model:

Key Relationships:

• Master Account: Administrative entity with limited permissions:

  • Create sub-accounts

  • Generate API wallets

  • NO asset access or transfer capabilities

• Sub-Accounts: Isolated trading environments:

  • Contract Trading Sub-Account (Perpetuals)

  • Spot Trading Sub-Account

  • Fully controlled by user wallet

• API Wallets: Transaction execution proxies:

  • Limited to signing pre-authorized trades

  • Cannot withdraw funds

  • Automatically expire after 24 hours

2. User Wallet Binding Process

Secure account integration follows a strict verification protocol:

Step 1: Identity Verification

1. The user's wallet initiates the flow by requesting a new sub-account from the LeverAcc smart contract.

2. The contract interacts with HyperLiquid's MPC (Multi-Party Computation) system to generate a dedicated sub-account address.

3. HyperLiquid returns the newly created sub-account address to the contract.

4. To prove ownership, the contract sends a verification challenge back to the user's wallet.

5. The user signs this challenge with their wallet's private key and submits it.

6. The contract verifies the signature matches the original wallet address.

7. Once confirmed, the contract instructs HyperLiquid to permanently bind the user's main wallet to the sub-account.

Step 2: Dual Authorization System All critical operations require:

1. User wallet signature (ownership proof)

2. API wallet signature (execution authorization)

3. MPC-Enhanced Master Account Security

LeverAcc implements enterprise-grade protection for administrative functions:

Sharded Key Architecture

The keys are distributed into multiple network and physical place

• AWS KMS (Tokyo)

• Azure Key Vault (Frankfurt)

• Google Cloud HSM (Iowa)

• Physical HSM (Singapore)

• User Cold Storage

Operational Workflow

1. Signature Request Initiation

   • User triggers account management action

   • System generates signature payload

2. Distributed Shard Activation

1. Signature Reconstruction

   • Combines shards via Lagrange interpolation

   • Validates complete signature

   • Executes authorized action

   • Immediately discards combined key

Security Enhancements Matrix

Feature	Traditional Model	LeverAcc Enhanced	Security Improvement
Key Storage	Single server	5-region sharding	Eliminates single point of failure
Authorization	API keys	Dual-signature binding	Requires active user consent
Access Control	Permanent tokens	24-hour API wallets	Limits exposure window
Recovery	Manual intervention	MPC shard rotation	Automated key regeneration
Auditability	Limited logs	Full on-chain records	Transparent operation history

Protection Mechanisms

1. Time-Limited API Wallets

   • Automatic expiration every 24 hours

   • Requires user reauthorization

   • Historical wallets become cryptographically inert

2. Geographic Dispersion

   • Key shards stored across 3 continents

   • Jurisdictional redundancy prevents regulatory seizure

3. Action-Specific Permissions

   Operation	Required Signatures
   Create Sub-Account	3/5 MPC shards
   Generate API Wallet	User + 2/5 MPC
   Trade Execution	API Wallet only
   Withdraw Funds	User wallet only

4. Compromise Response Protocol

   1. Breach Detected：System identifies unauthorized access attempts or signature anomalies.

   2. Shard Invalidation：Compromised shards (AWS/Azure/Google HSM nodes) are instantly revoked via broadcast.

   3. New Shard Generation：MPC network regenerates fresh shards using distributed key generation (DKG).

   4. User Re-Authentication：Owner must verify identity via MFA + cold storage signature.

   5. Seamless Migration：Assets/contracts transfer to new shards with zero downtime.

   6. Forensics & Patch：Attack vector analyzed using HSM/blockchain logs; security patches deployed.

Real-World Attack Mitigation

Scenario: Exchange Hot Wallet Compromise

• Attacker gains access to exchange systems

• Attempts to drain LeverAcc-connected accounts

Defense Response:

1. API wallets contain no withdrawal permissions

2. User funds secured in MPC-controlled sub-accounts

3. Withdrawal requires user's personal wallet signature

4. Unauthorized transfer attempts automatically blocked

Result: Zero funds lost despite exchange-level breach

This security architecture creates unprecedented protection: Users maintain complete control of their assets through personal wallet binding, while administrative functions benefit from military-grade MPC protection. The system ensures that even if multiple components are compromised, attackers cannot access funds or execute unauthorized actions.