Author: Nomos Labs
On March 26, the decentralized derivatives trading platform Hyperliquid experienced an unexpected trust test.
A price manipulation action led by a whale account triggered abnormal volatility in the $JELLY perpetual contract, exposing the platform's liquidity pool (HLP) to a potential risk exposure of up to $200 million. Several hours after the crisis, Hyperliquid quickly voted through the validator committee to delist the related contract and promised to automatically fully compensate non-violating users through the foundation.
Image source: Network
Although the event has temporarily come to an end, what follows is a more noteworthy question: When a platform that emphasizes "decentralized governance" chooses centralized decision-making and asset compensation in the face of risk, is its underlying governance logic, brand public relations strategy, and risk control system mature enough? Is it sufficient to support its sustainable development during periods of intense volatility?
From response speed to external statements, to mechanism transparency and user communication methods, Hyperliquid's crisis response path provides a vivid "practical sample" for Web3 projects. We attempt to review this event from a public relations and operational perspective, trying to answer a core question: While technical crises can be quickly contained, how can brand trust be repaired?
I. Initial Crisis Response: Quick Loss Mitigation and Emotion Soothing
1. Timely Containment, Controlling Risk Spread
Unlike some previous projects' "sluggish responses" during crises, Hyperliquid demonstrated a relatively mature crisis reaction, quickly grasping the PR "golden time":
Hyperliquid simultaneously announced an official statement on Twitter and Telegram, stating that the governance committee quickly intervened and delisted the involved assets, showing the platform's unified stance on "stabilizing the situation". Referencing the 2022 Solend incident, where the Solana lending protocol intended to take over a whale account's assets, triggering community debates about "decentralization" principles, Hyperliquid completed emergency decisions through on-chain governance processes, achieving a certain balance between operational compliance and efficiency.
Image source: Network
2. Automatic Compensation, Avoiding User Repeated Friction
Hyperliquid promised full compensation for non-violating users through the foundation, adopting an "automatic compensation" processing path to reduce user anxiety and communication costs. This handling method is uncommon in DeFi protocols and, to some extent, reflects Hyperliquid's attempt to prioritize user protection and narrow the trust distance with ordinary traders.
Similar "bottom-line" strategies have appeared before, such as OptiFi's proactive compensation for all user asset losses after unexpectedly closing mainnet contracts in 2022, proving that a "straightforward" acknowledgment of mistakes can effectively help projects regain trust.
3. Public Data, Building Processing Confidence
Although the announcement disclosed that "HLP losses were about 700,000 USDC within 24 hours", this figure, while significant, quickly verifying the event's truth and promptly transmitting a "controllable loss" signal with specific data, is undoubtedly a positive teaching example of "proving with facts".
Compared to the information asymmetry and data concealment during the FTX collapse, such information transparency can become a moat of brand credit, as admitting mistakes and making corrections is also a "loss mitigation" strategy.
Image source: Nomos Labs
II. Risk Warning Failure, Governance Signals Blurred: Systemic Weaknesses During Crisis
1. Delayed Risk Identification, Lack of Warning Mechanism
Essentially, this crisis originated from a whale using position leverage and spot price linkage mechanisms to create market fluctuations, exposing the platform's blind spots in trading behavior monitoring and position risk warnings. Although different from contract vulnerabilities or flash loan attacks, it similarly demonstrates the general weakness of DeFi platforms in building on-chain risk control systems.
Similar to CREAM Finance's flash loan attack in 2021 due to lack of real-time risk control models, this further confirms the industry's insufficient "active risk identification" capabilities, with risk control system construction remaining an "unresolved issue" for most DeFi protocols.
2. Mechanism Ambiguity and Governance Black Box: Why Are User Doubts Difficult to Calm?
Despite Hyperliquid's immediate compensation promise, key details in its announcement were clearly insufficient. How is compensation calculated? What is the screening logic based on? Are the fund sources sustainable? These points, which should have been clarified immediately, were blurred, triggering secondary user anxiety. Affected by $JELLY token liquidation, the platform's daily USDC net outflow reached $184 million.
Meanwhile, while the platform emphasized "contract delisting through validator voting", it did not simultaneously publish voting mechanisms, participating nodes, or governance processes, causing some users to question whether its "decentralized governance" is merely formal. Especially after the processing result was announced without visible process, users remained unable to obtain a clear answer to the core question of "who has the right to make decisions".
Image source: Telegram
3. When Doubts Come from Peers, Decentralization Trust is Challenged Again
Beyond user concerns, Bitget CEO Gracy publicly commented that Hyperliquid might become "FTX 2.0", even comparing it to a "centralized platform mirror", pointing out risks in its product architecture such as insufficient position limits, missing risk control models, and mixed insurance pool usage.
These voices easily reflect the industry's new round of questioning about "governance and power boundaries": When decentralized platforms face systemic risks, is it necessary to set "red line mechanisms"? Do project parties possess sufficient professional capabilities to complete risk control closure without destroying openness?
III. From Compensation to Reflection: What a Crisis Awakens Should Be Web3's Bottom Line Awareness
Hyperliquid's rapid loss mitigation and compensation mechanism certainly avoided uncontrolled situations, but its true "operational value" is far more than a set of emergency plan reviews. Instead, this event is forcing Web3 projects to re-examine: In a market dominated by decentralized narratives, when a crisis truly arrives, can the platform bear the responsibility boundary matching its vision?
This turbulence triggered widespread discussion not because of "whether compensation is enough", but because it touched users' most sensitive questions: Who has the right to decide rules? Is compensation fair? Should risk control have warned earlier? And these cannot be simply explained by "writing a process".
Image source: Network
Compared to formulaic crisis SOPs, Web3 users care more about: Are you willing to speak from the user's perspective in the first instance? Are you brave enough to publish complete processes, accept questioning, and open governance? Can you let the community know that their assets are not handed to a "faceless entity" but to a platform with true expression and choice rights?
This is not a race about "compensation speed", but a long-distance race about "mechanism trust". Hyperliquid has submitted its first response sheet, but true brand repair only begins after this sheet.
Postscript: The Real Test Begins After the Crisis
Hyperliquid's shortcomings in risk identification mechanisms, governance transparency, and information disclosure rhythm have been prominently magnified. Currently, the "first phase" of crisis response is complete, and the depth of handling the "second phase" will truly influence its future direction.
How will compensation be fulfilled? How will risk control be upgraded? How can governance become more transparent? The answers to these questions will determine Hyperliquid's long-term positioning in users' minds.
In the Web3 environment, which is transparent, with numerous nodes and extremely sensitive community voices, "never making mistakes" is a luxury, but "how to respond after a mistake" is the core capability that determines whether a project can survive long-term.
To some extent, this wave of Hyperliquid is a "practical test" for the entire DeFi narrative. What is being tested is not just the technical architecture, but also governance resilience and public relations capabilities.
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