📅 On February 12th, a trader executed a long ETH position with a total volume of over 300 million dollars on Hyperliquid. He used 15 million dollars as collateral with leverage ranging from 13.5x to 19.2x.

📈 As the price $ETH increased, this position reached a profit of about 8 million dollars. At that moment, the trader decided to take partial profits and withdrew 17 million dollars to his personal account (including 1.86 million dollars in profits, the rest being the principal). This action reduced the collateral level while pushing the liquidation price higher, increasing the risk of liquidation if the ETH price dropped sharply.

🔥 An event occurred! The ETH price quickly plummeted to 1,839 dollars, leading to a complete liquidation of the position. Due to the excessively large trading volume, liquidity on Hyperliquid was insufficient to absorb the entire amount of liquidation. To maintain system stability, the HLP Vault fund had to intervene, purchasing 160,234 ETH at a price of 1,839 USD/ETH (equivalent to about 286 million dollars).

📉 However, the market continued to face sell-off pressure (FUD), causing the ETH price to drop further, resulting in a loss of 4 million dollars for the HLP Vault.

💰 For the trader, although the exchange lost 4 million dollars, he still netted at least 1.86 million dollars in profit (the actual amount could be higher). This has raised many hypotheses that this trader may have exploited a mechanism loophole by going long ETH on Hyperliquid and shorting ETH on other CEX exchanges to profit from the difference.

⚖️ Is this a smart move, or merely a exploitation of the trading mechanism? 🤔

#BotOrNot 🚀