HyperLiquid (HYPE), Approximately ₩400 Billion Long Pressure Due to Anonymous Whale... HLP System Vulnerability Exposed

# Whale Exploits Clearing Mechanism to Gain $1.86M in Hyperliquid Exchange On March 12, an anonymous whale manipulated a structural vulnerability in the decentralized derivatives exchange Hyperliquid (ticker: $HYPE) to amass profits amounting to $1.86 million. During this process, Hyperliquid’s HLP (Hyperliquidity Provider) vault faced significant losses, bearing the brunt of long positions worth approximately $286 million. # Whale's Strategy: Forming Large Positions and Inducing Liquidation The whale deposited around $15.23 million into Hyperliquid and aggressively built an ETH long position. Utilizing up to 19.2x leverage, the whale established a position amounting to 141,013 ETH, roughly $271.6 million in value. Subsequently, the whale gradually withdrew collateral to elevate the liquidation price, ultimately triggering an automatic liquidation. Typically seen as an inefficient strategy, the whale managed to unwind the position without incurring losses, securing a net profit of $1.86 million. # Impact on HLP Vault and Hyperliquid's Countermeasures Hyperliquid’s core liquidity provision mechanism, the HLP vault, was significantly impacted. The HLP vault is designed to shoulder positions during automatic liquidations. As the whale induced liquidation, the system absorbed the large long position, resulting in a $286 million burden on the vault. In response to the incident, Hyperliquid promptly enacted several measures. ## Adjusting Leverage Limits for BTC and ETH To mitigate system risks posed by excessive leverage, Hyperliquid reduced the maximum leverage allowed. ## Official Statement from Hyperliquid Hyperliquid clarified that the event was not a hack or exploit but rather a profit realization stemming from asset price appreciation by the whale. They emphasized that the HLP vault, despite the short-term losses, remains a high-yield model over the long term, and the losses are inherent risks of the system. ## Ongoing Evaluation of Additional Safeguards Experts suggest implementing restrictions on collateral withdrawals and using real-time wallet clustering to prevent multi-account manipulation. While Hyperliquid has responded by lowering leverage ratios, some assessments indicate that this measure alone may not address the root cause of the vulnerability. # Accelerated Outflows and Hyperliquid's Future Following the incident, a total of $166 million has been withdrawn from Hyperliquid, with a consistent outflow observed over the past five days. The rising number of withdrawal accounts signals waning trust, which could adversely affect the exchange's operations if persistent liquidity outflows continue. In the competitive market of decentralized derivatives exchanges (PerpDEX), trading volume and liquidity are critical. The financial community is now closely watching to see if Hyperliquid can navigate this crisis and regain its "Hyperliquid Moment."