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By Shaurya Malwa|Edited by Parikshit Mishra
Updated Mar 12, 2025, 5:09 p.m. UTCPublished Mar 12, 2025, 12:40 p.m. UTC
- A ‘whale’ wallet on Hyperliquid opened a $200 million long trade on ether (ETH), resulting in a $4 million loss for one of the protocol’s vaults.
- The user withdrew funds, reducing their margin below maintenance requirements, which led to a $1.8 million profit for the user but a $4 million loss for Hyperliquid’s Hyperliquid Provider (HLP) vault.
- In response, Hyperliquid will update the maximum leverage for bitcoin (BTC) and ETH to 40x and 25x, respectively, to increase maintenance margin requirements for larger positions.
The liquidation of an over $200 million long trade on ether (ETH) lead to a $4 million loss for Hyperliquid, where the “whale” placed the bet.
The liquidation saw wallet ‘0xf3f4’ opening a highly leveraged 50x long ETH position, depositing $4.3 million USDC as margin for a total size of 113,000 ETH.
STORY CONTINUES BELOW
The wallet then started withdrawing funds, reducing the margin below maintenance requirements in a move that resulted in a $1.8 million profit for the user but a $4 million loss for Hyperliquid’s Hyperliquid Provider (HLP) vault.
Vaults are a blockchain-based product on Hyperliquid where users can deposit USDC to potentially earn a share of profits generated by trading strategies of other users or the vault’s owner.
The moves created speculation among Hyperliquid users of a possible exploit of the platform, a rumor it doused in an X post.
“There was no protocol exploit or hack,” Hyperliquid said. “This user had unrealized PNL, withdrew, which lowered their margin, and was liquidated. They ended with ~$1.8M in PNL. HLP lost ~$4M over the past 24h. HLP’s all-time PNL remains at ~$60M. As a reminder, HLP is not a risk-free strategy.”
Hyperliquid added that it will update the maximum leverage for bitcoin (BTC) and ETH to 40x and 25x, respectively, to increase maintenance margin requirements for larger positions as a preventive measure for similar moves in the future.
Hyperliquid’s HLP vault still has an all-time profit of $60 million, data shows. Meanwhile, the platform’s HYPE token dropped from $14 to under $13 in a knee-jerk move after the liquidation, though it has since fully recovered the brief slide as of late Asian hours.
Shaurya is the Co-Leader of the CoinDesk tokens and data team in Asia with a focus on crypto derivatives, DeFi, market microstructure, and protocol analysis.
Shaurya holds over $1,000 in BTC, ETH, SOL, AVAX, SUSHI, CRV, NEAR, YFI, YFII, SHIB, DOGE, USDT, USDC, BNB, MANA, MLN, LINK, XMR, ALGO, VET, CAKE, AAVE, COMP, ROOK, TRX, SNX, RUNE, FTM, ZIL, KSM, ENJ, CKB, JOE, GHST, PERP, BTRFLY, OHM, BANANA, ROME, BURGER, SPIRIT, and ORCA.
He provides over $1,000 to liquidity pools on Compound, Curve, SushiSwap, PancakeSwap, BurgerSwap, Orca, AnySwap, SpiritSwap, Rook Protocol, Yearn Finance, Synthetix, Harvest, Redacted Cartel, OlympusDAO, Rome, Trader Joe, and SUN.
