Whale Causing Chaos Brought Down Altcoin with Massive Ethereum Position! - Coin Bulletin

A large-scale whale liquidation in the Hyperliquid protocol resulted in a $4 million loss in the HLP treasury, causing the HYPE token price to plummet as well.

The native token of the Hyperliquid project, HYPE, experienced a sharp decline due to an unexpected liquidation following a transaction by a major investor. The HYPE token, which fell by 8.5% on Wednesday morning, dropped from $14.04 to $12.84. Despite a slight recovery after the losses, market apprehension continues.

Hyperliquid is known as a decentralized perpetual futures trading platform operating on Layer 1 blockchain. The core of the platform, Hyperliquidity Provider (HLP), conducts market making and liquidation operations with the USDC deposited by users. Those who deposit funds into this pool share the profits or losses. In the recent incident, the HLP vault suffered a loss of approximately 4 million dollars.

The whale came out profitable, the treasury incurred losses

Blockchain analysis platform Lookonchain indicated that a whale making a large transaction on Hyperliquid opened a long position of approximately 160,234 ETH, worth about $306.85 million, by depositing a total of $15.23 million USDC. Subsequently, the whale withdrew approximately $17.09 million USDC, making a profit of about $1.86 million when the position was liquidated. However, this transaction resulted in a $4 million loss for the HLP pool.

The Hyperliquid team, who made an official statement on the matter, stated that the incident was not due to any hack or security vulnerability, but rather triggered by the user withdrawing unrealized profits as margin, leading to liquidation. According to Wu Blockchain's statement, the whale made approximately 1.8 million dollars in profit from this transaction, and the HLP treasury suffered a loss of approximately 4 million dollars in the last 24 hours, but the historical total profit of the treasury still remains at the level of 60 million dollars.

Following the events, the Hyperliquid team announced that they will reduce the maximum leverage ratio to 40x for Bitcoin (BTC) and 25x for Ethereum (ETH) to prevent losses in liquidating similar large positions.