Bybit CEO: The 50x leveraged whale ETH long order liquidation event on Hyperliquid may promote innovation in CEX and DEX liquidation mechanisms

Odaily reported that Bybit CEO Ben Zhou posted on platform X, stating that the massive liquidation of a 50x leveraged whale on Hyperliquid was essentially using the platform's liquidation engine to exit. CEXs also face similar challenges, as when whales are liquidated, the CEX's liquidation engine will take over the positions, and reducing overall leverage may be a method, and possibly the most effective one, but doing so will harm the business, as users always want higher leverage. Additionally, while deploying dynamic risk limit mechanisms such as reducing the total leverage ratio based on the total position size as the position grows larger can be considered, if users use multiple accounts, this problem cannot be fundamentally solved. If DEXs want to provide high leverage services in the long run and avoid situations like the 50x leveraged whale on Hyperliquid using the platform's liquidation engine to exit, they may need to try CEX-level risk management, such as market monitoring to detect abusers and market manipulators. The subsequent development of this issue is interesting and may drive innovation in the liquidation mechanism.