News

Hyperliquid responded to concerns about "Hyperliquid protocol may suffer significant losses due to market manipulation" co-founded at X: Hyperliquid's margin design strictly ensures the platform's payment ability through mathematical mechanisms, and HLP's losses are always limited to its own treasury, and the operation of the protocol never depends on HLP - this feature existed before the JELLYJELLY incident. The added protection mechanism after the event only optimizes HLP's resistance in backup liquidation, and the underlying architecture of the agreement has not changed. Recently, an attacker in a JELLYJELLY incident tried to manipulate HLP (Liquidity Provider Pool) by establishing huge long and short positions for himself. Although at that time it was allowed to establish a position worth 4 million USDC when trading was allowed on un-cleared contracts, but there is a logical flaw in that HLP uses all its remaining funds as collateral for this liquidation. It needs clarification that there is no risk of repayment capacity from platform itself but indeed HLP faced excessive risk exposure due to market manipulation. Currently, HLP’s liquidation component treasury has set a collateral limit which limits potential losses through backup liquidation mechanism. Hyperliquid still maintains its original operating mechanism and handles under-collateralized positions in following order: 1) Market Liquidation 2) Backup Liquidation 3) Automatic Deleveraging (ADL). Current backup clearing of HLP has added protective measures by setting loss limits making cost of manipulating mark price far higher than what can be gained from limited profits from exploiting HPL.