HYPE Token Implodes: Hyperliquid Can’t Shake Off Whale Attacks 😵‍💫

by

Oh, what a tangled web we weave when first we practice to deceive! 🕵️‍♀️ Hyperliquid, once the darling of the crypto world, has fallen from grace faster than a trendy diet. The HYPE token, which used to ride high like a unicorn in a crypto rainbow, is now more like a tween at a middle school dance—clumsy and awkward. But what on earth happened to cause such a crash? Let’s dive into the juicy details! 😏

Hyperliquid: From Crypto Star to Falling Star 💫 Asheville ➡️ Siberia

Hyperliquid was the shiny new toy on the decentralized crypto playground, outshining even the most popular centralized exchanges. But then, the crypto whales started to swipe their cards like they were at a Black Friday sale. Security concerns? Check. Transparency issues? Check and mate. 🦀

All hell broke loose when a Bitcoin whale decided to make a $4 million “investment” that turned into a whopping loss. Instead of eating the loss, the whale pulled out its collateral mid-trade, leaving everyone else to clean up the mess. And just when you thought things couldn’t get any worse, the JELLY incident happened. 💃

A clever trader deposited $7 million in JELLY across three accounts, two long and one short. The result? JELLY prices spiked 400%, the short position got liquidated, and the loss was passed to Hyperliquid’s Provider Vault (HLP). Hyperliquid quickly delisted JELLY, citing suspicious activity, but the damage was done. The HYPE token’s value plummeted faster than a deflating balloon. 🎈

Read more$70 million in 24 hours: Can Ethereum crack $4,000 thanks to whales?

In a desperate attempt to salvage the situation, Hyperliquid promised to compensate affected users. But guess what? Not everyone was on the list! The community cried foul, accusing Hyperliquid of bias and favoritism. 🧐

The Community’s Roast: Hyperliquid, Meet the Fire 🌞🔥

The crypto community, known for its sharp tongues, was quick to jump on the bandwagon. Bitget CEO called Hyperliquid unprofessional and suggested it was following in FTX’s footsteps. Ouch! 🥶 Arthur Hayes, co-founder of BitMEX, also threw his two cents in, questioning Hyperliquid’s decentralization claims. 😒

Users with JELLY long positions at the time of settlement will be refunded by the Foundation as if their position settled at the closing price of 0.037555. This results in all JELLY traders being settled at a price advantageous to them, except flagged addresses, said Hyperliquid

The Bitget CEO also highlighted structural flaws. His concerns were echoed by Arthur Hayes, who also questioned Hyperliquid’s decentralization claims. As if the platform needed more attention, the Hyperliquid price crashed, losing over 20% of its value in a week and 8% in just 24 hours. It currently trades at $12.92, a far cry from its all-time high of $35.02 set three months ago. 🗓️

Read moreBitcoin halving could be a ‘sell-the-news’ event, at least for a few months

Hyperliquid’s Risk Management Overhaul: Will It Work? 🔧💪

In an attempt to prevent future meltdowns, Hyperliquid announced four major updates to its risk management policy. The liquidator vault will now have a tighter cap, holding only a small portion of the total HLP account value. The frequency of rebalancing has been reduced, and liquidation will be handled with a more sophisticated system. 🤖

There are also changes to the automatic deleveraging (ADL) process. Once the liquidator vault hits a certain limit, the ADL process will kick in, preventing the automatic movement of funds. The Open Interest policies have been revamped to better reflect the current market conditions. Most importantly, validators will now be able to remove poorly performing digital assets via on-chain voting. 📊

What’s Next for Hyperliquid? 🤔✨

Read morePEPE flips Optimism: Can OP emerge from the memecoin mania?

The whale incidents have exposed the vulnerabilities in Hyperliquid and similar DeFi trading models. The HYPE token has taken a beating, and the platform is under intense scrutiny. Despite the chaos, some experts believe that the new risk management updates could help restore investor confidence. However, the bearish trend is likely to continue for a while, affecting the price. 🦊

Read More

2025-03-29 11:37