hlp

The liquidity service provider Quote Markets team member filo published a review of the XPL flash crash event on Hyperliquid. During the flash crash of XPL on Hyperliquid, 16 wallets associated with funds and trading activities withdrew approximately $2,038,600 in margin before the price plummeted, leading to HLP taking over a large number of XPL long positions.HLP ultimately took over about 160 million XPL and completed the sale within approximately 75 minutes, incurring a loss of about $555,787, equivalent to 55.6% of the clearing vault's own funds. Investigations showed that 14 of the 16 wallets had connections in terms of funding sources or trading activities, with 12 wallets withdrawing funds in advance, contributing to 90.7% of the positions taken over by HLP. However, the investigation did not find direct evidence that these wallets caused the XPL crash, nor could it confirm whether they hedged on other trading platforms.It is worth noting that these 16 wallets did not profit from this event on Hyperliquid, collectively incurring a loss of about $711,000. Additionally, XPL had already dropped about 6% before the first liquidation occurred on Hyperliquid, so the liquidation was not the starting point of this crash, and the initial active selling volume of Binance perpetual contracts was also significantly larger.

According to on-chain data monitoring, the flash crash of XPL price caused Hyperliquid's HLP treasury to incur a loss of approximately $556,000.Previously, 16 wallets funded through centralized exchanges had been continuously building long positions in XPL since October 29, holding a total of about 269 million XPL, with a nominal exposure of approximately $23 million. Among them, the funds of 14 wallets were transferred from Binance about two months ago, with 12 wallets withdrawing approximately 2.02 million USDC before the price drop to reduce margin exposure.As XPL rapidly fell from $0.086431 to $0.069429, it triggered a chain liquidation of long positions. After the liquidation, the HLP treasury passively took over approximately 160.39 million XPL long positions, with an average holding cost of $0.07592, and a nominal value of about $12.18 million. The HLP treasury ultimately closed at $0.0725, recording a loss of approximately $556,000.

On-chain analyst 0xMacroGuy posted on X that due to taking over a large long position in the suspected malicious actor's Fartcoin (which has now been closed), Hyperliquid HLP lost about $1.2 million within 24 hours, equivalent to about a 0.35% drawdown.According to 0xMacroGuy's explanation, the attacker's behavior pattern is as follows: first, establish a large leveraged position in a low liquidity coin; intentionally push the position into a loss state, deliberately burning their own funds; once the position is liquidated, ADL is triggered, and HLP is forced to bear this loss, thereby inheriting this toxic position and the bad debt it brings; the end result is that the attacker loses funds, but HLP incurs a larger loss.The real-time page of Hyperliquid HLP shows that the TVL of this Vault is currently reported at $420 million, with an APR of 0% over the past month.

Hyperliquid co-founder Jeff posted on platform X to refute recent accusations regarding ADL (Automatic Deleveraging), stating that some commentators have drawn incorrect conclusions without understanding the core concepts. He emphasized that the ADL mechanism "does not transfer profits and losses to HLP" and pointed out that its treatment of users and HLP is completely symmetrical, stating that "ADL has nothing to do with HLP or back-to-back liquidation."Jeff also denied the claim that "ADL destroyed $653 million in profits," stating that such remarks are based on misunderstandings, and criticized certain authors who claim to have an academic background for "using complex machine learning terminology to wrap erroneous conclusions," emphasizing that one should understand the subject of study before publishing research or comments.

According to Arkham monitoring, an attacker is suspected of deliberately attacking HLP (Hyperliquidity Provider) on Hyperliquid. The attacker used 19 wallets and a principal of 3 million dollars to establish a POPCAT long position worth 20-30 million dollars with 5x leverage, and set up a massive buy wall.Subsequently, the attacker suddenly removed the buy wall, causing the POPCAT price to flash crash, and their 3 million dollars in collateral was instantly liquidated to zero. Due to a lack of liquidity, HLP was forced to take over the position, ultimately resulting in a bad debt loss of 4.9 million dollars. Analyst @mlmabc pointed out that this behavior of losing 3 million dollars in a matter of seconds is neither foolish nor negligent, but rather a "deliberate attack" on HLP and Hyperliquid.

ChainCatcher message, according to Lookonchain monitoring, a whale (address 0xAbCdE123...) withdrew 10.19 million USDC from HLP Vaults and deposited 5 million USDC into Hyperliquid to purchase HYPE. As of now, the whale has acquired 114,872 HYPE, worth 5.58 million dollars. The whale still holds 9.85 million USDC and may continue to purchase HYPE.

ChainCatcher news, according to on-chain data, HLP earned about $47,000 during the XPL volatility this morning, with an annualized return of 14% over the past month. A certain whale made millions of XPL between 5:00 and 6:00 this morning, directly sweeping the entire order book and squeezing all short positions. Subsequently, he began to close some long positions, earning $16 million in just one minute. XPL skyrocketed to $1.8 within 2 minutes, an increase of over 200%.Earlier reports indicated that on March 26, a whale holding 126 million JELLY (jellyjelly) was manipulating the coin price. The address first sold JELLY to cause a price crash, allowing HLP to have a passive short position of 398 million JELLY (approximately $15.3 million). Then, the address bought back JELLY, driving up the price, resulting in HLP losing nearly $12 million.Subsequently, users holding long positions in JELLY during the settlement will be refunded by the foundation at the settlement price of 0.037555, and the trading pair will be delisted. The leverage system and HLP liquidation mechanism have also been updated.

ChainCatcher news, according to Ember monitoring, the Hyperliquidity Provider (HLP) made a profit of $530,000 by liquidating James Wynn's position worth $100 million.

ChainCatcher message, Hyperliquid co-founder @chameleon_jeff responded on X to concerns that "the Hyperliquid protocol may suffer significant losses due to market manipulation":Hyperliquid's margin design strictly ensures the platform's solvency through mathematical mechanisms, with HLP's losses always limited to its own treasury, and the protocol's operation never relying on HLP------this feature existed prior to the JELLYJELLY incident. The newly added protective mechanisms after the incident only optimize HLP's loss resistance in backup liquidation, and the underlying architecture of the protocol has not changed. In the recent JELLYJELLY incident, an attacker attempted to manipulate HLP (liquidity provider pool) by establishing a massive long and short position on themselves. Although the unliquidated contract limit at that time allowed for the establishment of a position worth 4 million USDC, the logical flaw was that HLP used its entire fund balance as collateral for this liquidation. It should be clarified that the platform itself does not face solvency risks, but HLP did face excessive risk exposure due to market manipulation.Currently, HLP's liquidation component treasury has set a collateral limit, restricting potential losses through the backup liquidation mechanism. Hyperliquid still maintains its original operating mechanism, processing under-collateralized positions in the following order: 1) market liquidation 2) backup liquidation 3) automatic deleveraging (ADL). The current backup liquidation of HLP has added protective mechanisms by setting loss limits, making the cost of manipulating the mark price far exceed the limited gains that can be obtained from HLP.

ChainCatcher news, according to information from the Hyperliquid official website, HLP TVL has temporarily dropped to $197 million.It is reported that HLP TVL was previously as high as $240 million.

ChainCatcher news, according to Lookonchain monitoring, a whale holding 126 million JELLY (jellyjelly) is manipulating the coin price.The address first sold JELLY, causing a price crash, which allowed HLP to have a passive short position of 398 million JELLY (approximately 15.3 million USD).Then the address bought back JELLY, driving up the price, resulting in HLP losing nearly 12 million USD.