Hyperliquid had a short-term net outflow of 140 million Mg, and the token fell by more than 25%. Review of the JELLYJELLY incident

On the on-chain exchange, Hyperliquid dropped from $16.4 to $12.3 in a single day on March 26, a short-term drop of 25%. It has returned to $14.4 before press time. The reason turned out to be that a whale opened a $JELLYJELLY short position on Hyperliquid and simultaneously raised the spot price to cause the short position to explode. The mechanism of Hyperliquid is to let the official treasury take over the short position. Eventually, when the whale pulled the price, OKX and Binance were launched$JELLYJELLY, Hyperliquid announced the removal of the trading pair.

Traders seize on Hyperliquid design flaw

According to on-chain records , at 9 p.m. Taiwan time, a trader automatically liquidated approximately $4.5 million in $JELLYJELLY short positions. This means that the Hyperliquid Vault will take over the short position. Then JELLY spot was strongly pushed up by the whale, rising 457% within an hour.

OKX and Binance took over the listing $JELLY forcing Hyperliquid to urgently remove JELLY

During this period, the KOL jokingly suggested that He Yi put $JELLYJELLY on the shelves, because the higher the price of JELLY is raised, the greater the loss of Hyperliquid. He Yi also appeared in the comment section to express that he had received it. Starting from 11:12 pm, OKX and Binance successively listed the $JELLYJELLY contract.

At 11:47 pm, Hyperliquid announced the delisting of $JELLYJELLY. The official said that after discovering evidence of suspicious market activities, the validator group held a meeting and voted to remove the JELLY violators. However, for users, this officially announced that Hyperliquid is not decentralized as it claims, and is destined to become a stand-alone chain.

BitMex founder Arthur Hayes also declared war on Hyperliquid on Twitter , saying that Hyperliquid should stop pretending to be decentralized and stop pretending that traders really care about decentralization. And think that Hyperliquid will continue to degrade.

Concerned about the treasury being liquidated, $140 million flowed out of Hyperliquid within a few hours

Hyperliquid's action of rolling back the transaction was equivalent to unplugging the network cable. As a result , Hyperliquid liquidated 392 million $JELLY (3.72 million USD) at a price of 0.0095 USD, making a profit of 703,000 USD without any loss.

Due to concerns about the liquidation of Hyperliquid Vault, users withdrew their funds, further causing the liquidation price to fall. According to Parsec data , Hyperliquid's stablecoin net outflow reached $140 million in just a few hours after the incident.