Hyperliquid (HYPE)-JELLY drama could have sparked a CEX vs. DEX war in crypto
The post Hyperliquid (HYPE)-JELLY drama could have sparked a CEX vs. DEX war in crypto appeared on BitcoinEthereumNews.com.
Hyperliquid, a (supposedly) decentralized trading platform, delisted its JELLYJELLY perpetual futures after a trader’s manipulation caused $13 million in losses. The incident, developed on March 26, sparked debates about decentralization and market integrity in crypto. The drama unfolded when a trader exploited Hyperliquid’s system, forcing the platform to reimburse most users via the Hyper Foundation. This swift action followed suspicious activity that rattled the decentralized exchange’s native token, HYPE, and its Hyperliquidity Provider Vault (HLP). Essentially, the trader opened a $6 million short position on JELLYJELLY, as detailed by several media outlets. They then pumped the Solana-based memecoin’s price on-chain, surging it over 400%, according to Arkham Intelligence. This triggered a liquidation, but the position’s size overwhelmed Hyperliquid’s system. The HLP absorbed the short, facing an unrealized loss of $13.5 million, reported CoinDesk, before validators intervened. Hyperliquid’s validators voted to delist JELLYJELLY and forcibly closed all positions, as announced on X by the Hyperliquid oficial account. After evidence of suspicious market activity, the validator set convened and voted to delist JELLY perps. All users apart from flagged addresses will be made whole from the Hyper Foundation. This will be done automatically in the coming days based on onchain data. There is no… — Hyperliquid (@HyperliquidX) March 26, 2025 The Hyper Foundation pledged to refund unaffected users automatically, excluding flagged addresses tied to the manipulation. Blockchain data will determine payouts, expected within days, the platform confirmed. Meanwhile, the trader remains nearly $1 million down, per Arkham Intelligence’s March 26 analysis. Analysts and experts weigh in on Hyperliquid’s drama Analysts see this as a test of Hyperliquid’s decentralized ethos. Bitget CEO Gracy Chen criticized the handling, warning of an “FTX 2.0” risk, as quoted by Cointelegraph. Posts on X, like Benjamin Celermajer’s, highlighted validators’ ability to “fudge” prices, raising centralization concerns. #Hyperliquid…
Filed under: News - @ March 27, 2025 2:29 pm