Investigation of the Jelly Short-Squeeze Incident: Do Centralized Exchanges Really Outperform Hyperliquids?

The article discusses the recent incident involving the Jelly short squeeze with Hyperliquid, which sparked industry debate. The team @godrealmx interviewed Sean, a developer of the LSD project within the Hyperliquid ecosystem. Sean shared his experience and the technical architecture of Hyperliquid, including the blockchain network for DEX, HyperEVM (Layer2), and the staking mechanism. He noted that the Hyperliquid code is currently closed, raising concerns, and that its ecosystem tools have room for optimization. Regarding the Jelly incident, Sean pointed out weaknesses in Hyperliquid's risk management for high-risk projects, such as the permissionless listing process and the passive liquidity pool mechanism for market makers. He suggested that Hyperliquid implement measures such as position limits based on market capitalization and dynamic adjustments to Open Interest Caps.