Key Points
- Earlier today, HYPE price dropped by over 5% ahead of a rebound.
- A whale liquidation event left Hyperliquid’s vault HLP with a loss of over $4 million.
Today, Hyperliquid (HYPE) recorded a shape price loss after the project’s HLP Vault lost more than $4 million in the past 24 hours.
Hyperliquid is a blockchain platform designed to boost the efficiency and performance of DeFi apps.
HYPE Price Dropped by Over 5%
Earlier today, HYPE’s price dropped by more than 5%. The coin recorded a price decline from around $14.5 to $12.75, seeing a drop in market cap from $4.69 billion to $4.26 billion before a rebound.
After the sharp price drop, HYPE managed to recover to current levels of $13.87 with a market cap of over $4.63 billion.
Reports revealed that a whole liquidation event triggered the price loss for the coin.
Hyperliquid’s HLP Vault Lost Over $4 Million
Reports from EmberCN revealed that a whole liquidation event left the project’s Hyperliquidity Provider (HLP) with a loss of over $4 million.
Reports revealed that crypto whale 0xf3f4 opened a long position of 175,000 ETH worth around $340 million with high leverage, achieving a profit of $8 million. After closing 15,000 ETH, the whale reportedly transferred over 17 million USDC in margin back to its address.
After the margin was withdrawn, the remaining 160,000 ETH long position triggered liquidations. Due to the large liquidations, HLP faced a loss of over $4 million.
The team at Hyperliquid commented on the whale’s ETH long position.
Hyperliquid Offered Clarifications
In a post on X, the team behind the project said that there was no protocol exploit or hack involved.
They noted that the whale had unrealized PNL, withdrew, lowered its margin, and was liquidated. The whale ended up with -$1.8 million in PNL, according to Hyperliquid’s notes.
The team confirmed the loss of about $4 million over the past 24 hours and highlighted that HLP’s ATH PNL remains at around $60 million.
They also said that the maximum leverage will be updated for BTC and ETH to 40x and 25x respectively to boost maintenance margin requirements for larger positions. This will result in a better buffer to backstop liquidations of large positions.
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
Before the team at Hyperliquid explained that the event was due to HLP’s liquidation engine’s inability tp handle such a large position, community members and analysts suggested that a user/entity might have manipulated the HLP to extract value, potentially triggering losses to the vault and impacting the coin’s price.
What is Hyperliquid (HYPE)?
Hyperliquid is a blockchain that houses all finance, according to the team’s official notes. Users can trade, build apps, and launch tokens on the “hyper-performant” chain.
The HLP is an important component of the protocol, a decentralized perpetual futures exchange that’s built on its own L1.
HLP is a community-owned vault that:
- Runs market-making and liquidation strategies
- Allows users to deposit USDC and share in the profits or losses proportional to their stake
- Democratizes access to strategies typically reserved for institutional market makers
- Earns revenue from trading fees, funding payments, and liquidations
On HLP, deposits are locked for four days, and the vault’s performance is transparently tracked on-chain.
