Experts at EmberCN have identified unusual whale behavior on Hyperliquid, which may suggest a test of the perpetual derivatives DEX’s liquidation mechanism.
In the past 24 hours, Hyperliquid’s HLP Vault has lost over $4 million, and the losses are still growing.
According to @EmberCN, a whale opened a long position of 175,000 ETH (valued at approximately $340 million) with high leverage, achieving a floating profit of $8 million.… https://t.co/u1oWrNo3F7
— Wu Blockchain (@WuBlockchain) March 12, 2025
According to analysts, a major participant opened a long position of 175,000 ETH (~$340 million) with high leverage. At one point, their unrealized profit reached $8 million.
After closing 15,000 ETH, the whale transferred 17.09 million USDC as margin back to their address. Such actions led to a breach of the collateral adequacy parameter. Consequently, the platform liquidated the remaining 160,000 ETH in the long position.
Following the liquidation, the HLP (Hyperliquidity Provider) vault absorbs the losses to avoid exerting excessive immediate influence on the asset’s price. It then gradually closes the position. This particular case affected only 1% of assets, yet at one point the floating loss exceeded $4 million.
Platform representatives urged not to view the situation as a protocol vulnerability or hacking incident. They noted that Hyperliquid’s historical profit of $60 million far exceeds the losses.
Regarding commentary and questions on the 0xf3f4 user’s ETH long:
To be clear: There was no protocol exploit or hack.
This user had unrealized PNL, withdrew, which lowered their margin, and was liquidated. They ended with ~$1.8M in PNL. HLP lost ~$4M over the past 24h. HLP’s…
— Hyperliquid (@HyperliquidX) March 12, 2025
Following the incident review, developers decided to adjust the maximum available leverage for Bitcoin and Ethereum contract traders to 40x and 25x, respectively. This will provide a better buffer for liquidating large positions, the team clarified.
In February, Hyper Foundation launched the HyperEVM execution environment to ensure “universal programmability.”
Hyperliquid is a L1 with a native DEX module. The network employs a modified version of the Proof-of-Stake consensus algorithm called HyperBFT, with a throughput of 200,000 TPS.