Qwatio, a user trading with leverage on the Hyperliquid platform, made millions of dollars due to high-risk positions. However, in order to maintain his profits, he exploited a gap in the system and ended up experiencing a loss of over $10 million within a few days. This incident highlighted the significant risks associated with trading with high leverage.

Million-Dollar Gains and Controversial Strategy

Qwatio made significant profits in a short time by using 50x leverage, particularly on BTC and ETH. One of its standout moves was taking a long position just one day before Trump's announcement of the 'Crypto Strategic Reserve.' It earned $6.8 million from that trade in just one day.

However, behind these high profits was the strategic liquidation of their $305 million position by exploiting risk control gaps on the platform. This maneuver allowed them to shift risks onto Hyperliquidity Providers (HLP), effectively capitalizing on the system's flaws.

Following this situation, Hyperliquid had to lower leverage limits, and the HLP model was severely shaken. Other users on the platform and liquidity providers were negatively affected by this situation.

Turning Point: Became the Target of Whale Hunters

Qwatio's rapid rise was short-lived. Its success attracted the attention of other major players. Groups known as 'whale hunters' attempted to liquidate its positions by manipulating prices. Initially, these attempts failed, but over time, Qwatio had to invest large amounts of capital to maintain its positions.

As a result, it was liquidated six times in the last three days and lost $10 million in the process. Qwatio, who changed the username to 'falllling,' continues to stay in the market by opening a new position of $4.5 million on BTC and ETH.

Lessons to Be Learned from Qwatio

The story of Qwatio shows that leveraged trading can provide high profits in the short term, but it also carries serious risks in the long run. While it is possible to temporarily exploit gaps in the system, market reactions, regulations, and interventions from other players can disrupt all strategies.

In summary:

While excessive leverage may offer short-term gains, it can also lead to significant losses.

Exploiting platform gaps creates systemic risk and can lead to regulatory interventions.

Market actors may target successful traders; this is especially likely on non-transparent platforms.

There is no 'infinite money machine' in the real market. The system eventually finds balance and punishes mistakes.

The rise and fall of Qwatio serves as an important warning to traders operating on platforms like Hyperliquid: Leverage can promise significant profits, but when control is lost, the consequences can be equally devastating.

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