What Happened in the Last 12 Hours๐
Hyperliquid (HL): A decentralized perpetual exchange.
HLP: Hyperliquid's internal liquidity vault.
Jelly Token: Token with a market cap of about $10-20 million.
๐๐๐๐๐ง๐ญ ๐๐ฏ๐๐ง๐ญ๐ฌ:
- A trader used a wallet (0xde95) to place a massive $8 million short on Jelly.
- They reduced their margin intentionally, making HLP take over and auto-liquidate the position.
- At the same time, they drove up the price of Jelly on-chain, causing a significant squeeze on short positions.
- Jelly's market cap soared from around $10 million to over $50 million in less than an hour, causing a huge initial loss for HLP.
๐๐๐๐จ๐ง๐ ๐๐๐ฏ๐ ๐จ๐ ๐๐ก๐๐จ๐ฌ:
- Amidst the turmoil, another new wallet (0x20e8) made a large long position, gaining about $8.2 million quickly on Hyperliquid.
- Exchanges like Binance and OKX added Jelly perps due to the sudden activity.
๐๐ฒ๐ฉ๐๐ซ๐ฅ๐ข๐ช๐ฎ๐ข๐โ๐ฌ ๐๐๐ฌ๐ฉ๐จ๐ง๐ฌ๐:
- They quickly decided to delist Jelly perps and drastically adjusted the oracle price to $0.0095 per Jelly, closing all open positions.
- They communicated their actions openly and promptly.
- Regular users, apart from those involved in suspicious activities, were compensated without needing to do anything.
๐ ๐ข๐ง๐๐ง๐๐ข๐๐ฅ ๐๐ฎ๐ญ๐๐จ๐ฆ๐๐ฌ:
- Hyperliquid managed to turn a potential multimillion-dollar loss into a $703K profit after these adjustments.
- HLP depositors were not only protected but also ended up with a profit of about $687K for the day.
๐๐๐ซ๐ค๐๐ญ ๐๐๐๐๐ญ๐ข๐จ๐ง:
- Positive: They were commended for their quick and decisive actions that safeguarded depositors.
- Negative: There was some controversy over the sudden oracle price changes and questions about the transparency of their decentralized governance.
๐๐ก๐ฒ ๐๐ก๐ข๐ฌ ๐๐ฌ ๐๐ฆ๐ฉ๐จ๐ซ๐ญ๐๐ง๐ญ:
- This incident sheds light on significant risks in decentralized perpetual exchanges like oracle manipulation and liquidity issues.
- It underscores the importance of having fast and transparent governance and intervention systems in place.
- It also highlights the tough decisions protocols may have to make to ensure depositor safety during market manipulations.