- A leveraged assault on Jelly Jelly (JELLY) Futures left Hyperliquid in shambles, revealing cracks in its armor and shaking investor faith to the core. Quelle horreur!
- HYPE token plummeted 22% after a validator vote, as the community collectively shrugged, “C’est la vie.”
On the 26th of March, Hyperliquid [HYPE] bid adieu to JELLYJELLY (JELLY) Futures after a colossal short position sent the market into a frenzy. Mon dieu!
Whale wallet feasts as vault gasps for air
A trader, with the audacity of a French aristocrat, opened a $6 million short with 20x leverage, then bought JELLY spot to force liquidations. Prices skyrocketed 400–500%, pushing the liquidator vault into a $12 million unrealized loss. Sans intervention, a sustained rally could have liquidated the vault entirely, if JELLY hit a $150 million market cap. Sacré bleu!
But lo! The validator committee acted swiftly, force-settling JELLY at $0.0095, turning disaster into a $703,000 net gain. Quelle surprise!
Meanwhile, wallet 0x20e8 entered a long position worth $8.2 million as the liquidations unfolded, exiting within minutes with $8 million in profit. Très astucieux!
This wasn’t the first time such a pattern emerged. In fact, it echoed a prior exploit involving BERA in February. Déjà vu, anyone?
Wallet 0xde95 was traced as the short origin, selling JELLY spot to force upward pressure, driving the vault into risk. Five wallets linked to the attacker have acquired 10% of the token’s supply since 22 March. Suspicious, non?
Data confirms manipulation, not organic growth
JELLY’s market cap hovered between $10 and $20 million, making it vulnerable to manipulation by even modest capital. Just $4–8 million in spot buys shifted the market cap by over 400%. Incroyable!
Trading volume surged by 1,852%, climbing to $170 million in a day. Transaction count jumped by 997%, with 272,000 trades recorded. Active trader count rose by 961% while liquidity stayed stable at $2.99 million. Sell volume slightly outweighed buys — $85 million versus $84 million — suggesting manipulation over organic demand. Quelle farce!
On-chain links revealed that five wallets connected to the original whale now hold 10% of JELLY’s total supply. That’s roughly $1.9 million in tokens acquired between 22 March and the day of the incident. Très suspect!
Trader behavior on the JELLY token page exploded. Transaction counts and volume soared. That kind of market activity doesn’t happen by chance — especially not within a single day. C’est évident!
Critics call out centralized behavior
Gracy Chen, CEO of cryptocurrency exchange Bitget, publicly denounced Hyperliquid’s decision-making process. “Despite presenting itself as an innovative decentralized exchange with a bold vision, Hyperliquid operates more like an offshore [centralized exchange].” Ouch!
Drawing comparisons to past collapses, Chen warned, “Hyperliquid may be on track to become FTX 2.0.” Mon dieu, not again!
Chen further criticized the force-settlement decision as “immature, unethical, and unprofessional,” emphasizing the long-term consequences of undermining market trust. “The decision to close the $JELLY market and force settlement of positions at a favorable price sets a dangerous precedent. Trust—not capital—is the foundation of any exchange […] and once lost, it’s almost impossible to recover.” Très sage!
Arthur Hayes commented on the contradiction, noting that the protocol’s branding didn’t match its behavior. Quelle ironie!
Exchange links raise more red flags
ZachXBT connected attacker wallets to exchanges like OKX, Binance, and MEXC — All of which listed JELLY shortly after the delisting. Très suspect!
As validators voted, the HYPE governance token dropped by 22%, hinting at shaken user trust. Wallet 0xde95 withdrew $6.26 million before account freezes. Just $900,000 remained locked. Quelle catastrophe!
The vault’s 4.8x leverage exposure turned a $6 million short into a $12 million liability. Until low-cap leverage is reeled in, more JELLY-style plays may follow. À suivre!
For now, Hyperliquid has avoided collapse. Even so, this episode did expose its governance. C’est la vie!
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2025-03-28 10:23