HyperLiquid removes JELLY from the list after getting caught in a dispute over $13 million

HyperLiquid ended the dispute by removing JELLY from its list and forcibly closing all positions.

The vault of the automated market maker of HyperLiquid lost $13.5 million at one point before the exchange forcibly closed all positions.

The HYPE token fell 20% as the trading battle emerged on social media.

Binance responded by listing the JELLY token, causing the price to surge by 560%.

Hyperliquidity Provider (HLP), a market-making vault that is part of the HyperLiquid derivatives exchange, faced a devastating loss after a trader allegedly manipulated the price of the JELLY token.

The native token of HyperLiquid (HYPE) fell 20% after the unrealized PNL of HLP temporarily stood at -$13.5 million.

According to Lookonchain, a trader who had $4.85 million of the JELLY token combined a short position on HyperLiquid with on-chain spot purchases, which liquidated the position on HyperLiquid and essentially meant that HLP inherited that short position.

HLP is an automated market-making bot that links with the liquidation engine of exchanges.

The trader aggressively bought JELLY on spot exchanges, which raised the price and temporarily caused HLP's unrealized loss to reach $13.5 million. Liquidity in decentralized exchanges is minimal, making it relatively easy to move the price compared to HyperLiquid.

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