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Hyperliquid’s Liquidation Chaos: Bybit CEO Has a Warning For DEXes

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  • A whale manipulated Hyperliquid’s liquidation engine, securing a $1.8M profit while the DEX faced a $4M loss.
  • Bybit CEO Ben Zhou says high leverage poses risks for both DEXs and CEXs, requiring stronger risk management.
  • Zhou suggests DEXs adopt CEX-style risk tools like market surveillance and dynamic risk limits to mitigate losses.

Hyperliquid’s recent liquidation chaos has sparked manipulation concerns among investors. However, Bybit CEO Ben Zhou isn’t surprised by the wipeout. In the tweet thread, Zhou shed light on the broader impact of high-leverage trading on both DEX and CEX.

An anonymous whale recently manipulated Hyperliquid’s liquidation mechanism to exit his position. By doing this, they avoided the massive slippages and shift the risks to the DEX instead. Here’s how- Rather than directly selling its position, the trader may have reduce their margin, pushing liquidation price up, thus triggering Hyperliquid’s liquidation engine.

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Hyperliquid's Liquidation Chaos: Bybit CEO Has a Warning For DEXes 3

Once market price nears liquidation levels, the DEXs automatically take over the position and sell off, incurring significant loss in the process. As reported by TronWeekly, the investor secured $1.8 million in profit amidst a market downturn. On the other hand, the DEX’s total estimated loss neared $4 million even though it maintained a $451 million value locked, resulting in a 1% loss from the original $451 million.

Hyperliquid Needs CEX-Level Risk Management for High Leverage

According to Zhou, such kind of leverage challenge isn’t exclusive to DEXes. Even centralized exchanges incur heavy loss due to such tactics. Although high-leverage trading amplify both profits and losses, they often trigger significant market disruptions. In response to the incident, Hyperliquid have lowered its overall leverage limits, a standard protocol employed by DEXes. But it has its downsides.

In the long term, it could hurt business as traders often seek high-leverage platforms. Zhou suggests that DEX should deploy many of the risk management tools used by CEXs. This includes market surveillance to spot abusers and market manipulators, OI limit to control overall OI.

He also suggested another tool often used by CEX called a “Dynamic Risk Limit Mechanism” that reduces the allowable leverage as a trader’s position size increases. Zhou concludes by saying that it will be interesting to see how DEXs evolve, perhaps through “new innovation on liquidation mechanism” to address these challenges.

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Hyperliquid's Liquidation Chaos: Bybit CEO Has a Warning For DEXes 4

HyperEVM Live: The Secret to Hyperliquid’s Fast, Secure DeFi Future

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  • HyperEVM integrates with Hyperliquid’s consensus to improve security and efficiency across Layer 1 networks.
  • HyperBFT consensus in HyperEVM boosts blockchain security, speeding up transactions without multiple validation layers.
  • Hyperliquid launches HYPE token and WHYPE contract, supporting DeFi and spot exchanges on both Layer 1 and HyperEVM.

Hyperliquid has come up with the HyperEVM to increase performance on blockchain solutions . The system created by the Hyper Foundation is combined with Hyperliquid’s consensus, which is different from other isolated EVMs. This makes the system more compatible with Layer 1 networks. It enhances security for nodes in the platform while also increasing the efficiency of different nodes in the platform.

HyperEVM’s greatest benefit is that it has its own unique consensus algorithm in the HyperBFT. This makes it possible for the increase of security on the blockchain for all the transactions that are to take place. The given scheme does not also require multiple layers of validation as a means of accomplishing the intended goal. This accelerates the process at the same time ensuring integrity and security of decentralized applications (dApps) and other network occurrences.

In the subsequent step, developers will be involved in review process in Hyperliquid. These are to enhance the tools provided in Hyper EVM. The latter is always required to ask developers to make recommendations on how the system’s performance can be improved further. Subsequent releases will also enhance HyperEVM capabilities for the transaction of ERC-20 tokens and precompiled contracts for developers.

Bug Bounty Program Launch

Besides these advancements, Hyperliquid has launched a bug bounty program. This type of programme offers bonuses to people for identifying bugs in the HyperEVM code. It promotes sound practices and enhances security for the platform. This way Hyperliquid’s approach will always keep the ecosystem protected from vandals or other threats that may be facing him/her.

HYPE has also been launched by Hyperliquid to complement the ecosystem that is being developed to support the same. HYPE serves as the gas token for transactions and operations within Hyper EVM. Moreover, a new contract has combined which is known as WHYPE. This contract is for DeFi application regarding Layer 1 and HyperEVM spot exchange.

HyperEVM’s Market Impact

HyperEVM comes at a point of defining inflection for Hyperliquid. Since it was launched in November 2024, the HYPE token of the platform has experienced a 638% increase in value. This growth can help put the company in a vantage position whereby it competes effectively in the already existing cryptocurrency market. More benefits in the financial services provided by Hyperliquid include their features such as the Assistance Fund. The Assistance Fund provides users with security in the case of, or when, there has been a breach of security or low liquidity.

Hyperliquid is still likely to grow because of HyperEVM, which has now made its debut. All users of the new system will benefit from the reinforcement of the platform and the improvement of the blockchain technology. 

HYPE Unstaking Alert: 1.5M Tokens About to Flood the Market

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  • Large $HYPE unstaking event anticipated, potentially creating buying opportunity.
  • The project’s assistance fund holds substantial tokens indicating strong buying pressure.
  • Grayscale Research adds $HYPE to its list of top 20 crypto assets.

Hype token is gaining significant traction due to its recent price surge and an anticipated large-scale token unstaking event. As highlighted by a market observer, the Layer 1 blockchain and decentralized exchange is preparing to release roughly 1.5 million of the namesake tokens from staking within the next few hours.

This substantial unstaking event, located in three wallets holding over two-thirds of the total queued amount, has raised concerns about potential market fluctuations.

In comparison to past instances of significant unstaking, the firm anticipates a possible short-term price pullback. Market experts advise traders to prepare their bids, suggesting this could represent a valuable opportunity to accumulate $HYPE before its anticipated future appreciation.

The other day, the DEX further fueled bullish sentiment by revealing the substantial holdings of its assistance fund. The fund currently holds nearly 15 million $HYPE tokens, representing about 5% of the circulating supply.

HYPE
HYPE Unstaking Alert: 1.5M Tokens About to Flood the Market 6

$HYPE to $100? $730M Buying Pressure and Bullish Predictions

Since November 29th, the fund has reportedly purchased over $150 million worth of the namesake tokens, averaging daily purchases exceeding $2 million. Annualizing this buying pressure suggests a potential influx of $730 million into the market, equivalent to almost 10% of the current circulating supply.

The DEX also maintained consistent growth as evidenced by its ranking among the top three chains for daily revenue generation. They project daily fee revenue to surpass $3 million soon, expressing strong confidence in the token’s potential to exceed $100 within the next 12 months. They acknowledge the unique nature of $HYPE’s tokenomics, suggesting that its full implications will become clearer over time.

Adding to the positive momentum, Grayscale Research’s Q1 2025 list of top 20 crypto assets includes $HYPE, alongside other notable additions. This recognition from a prominent investment firm further validates the decentralized project’s growing prominence within the cryptocurrency market.

HYPE on the Verge of 50% Explosion After Crucial Setup

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  • HYPE is poised for a potential breakout, targeting substantial returns.
  • Historical data suggests positive crypto trends in February.
  • The token presents a compelling opportunity for savvy investors.

HYPE is showing signs of a potential breakout after a period of consolidation. Traders are closely watching the token as it navigates a key level, suggesting a significant price surge could be imminent. Historically, February has been a positive month for cryptocurrencies, adding further fuel to the bullish sentiment surrounding the token.

Technically, the token was recently engulfed in a period of price fluctuation and uncertainty, causing some choppiness in its trajectory. However, this period of consolidation is likely coming to an end, with the token demonstrating renewed strength and upward momentum.

Analysts point to the current price action as a strong indicator that a substantial price increase is on the horizon. The potential for a 50% surge is being discussed among traders, making HYPE an attractive prospect for those seeking substantial short-term gains.

Additionally, the token is gaining significant traction recently, with a surge in social media mentions and positive developments within the ecosystem. Mindshare is clearly on the rise as traders recognize the platform’s growing potential.

HYPE Eclipses ETH in Daily Fee Revenue

Recent data highlights several key catalysts: Hyperliquid has surpassed Ethereum in 24-hour fee revenue, highlighting its growing market dominance. The platform boasts a whopping $1 billion in $HYPE staked, reflecting strong community confidence and participation. Ongoing buybacks further enhanced the token’s value proposition, while quick asset listings boosted the platform’s appeal to traders.

HYPE
HYPE on the Verge of 50% Explosion After Crucial Setup 8

What are people saying ? A quick look at the project’s page reveals the most interesting insights: – Hypeliquid flips Ethereum in 24h fee revenue today. – $1B $HYPE staked – Buybacks – Quick asset listings.

These factors combine to create a bullish outlook for the token. The increased attention, coupled with concrete achievements and strategic initiatives, positions the blockchain for continued growth and potential price appreciation.

Savvy investors are capitalizing on HYPE’s current price point, recognizing the potential for significant returns in the near future. The combination of positive historical trends for crypto in February and the token’s current technical outlook makes it a compelling opportunity for those looking to maximize their gains in the altcoin market.

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