The highly leveraged whale liquidation over-liquidity resulted in the loss of $4 million from the HLP fund. Meanwhile, blockchain analysts found suspicious transactions worth hundreds of millions of dollars, raising concerns about market manipulation and money laundering. Are traders interested in using the hyper-liquid clearing mechanism?
Hyplliquid loses $4 million due to unusual ETH long position
Source: hypurrscan.io
On March 12, 2025, hyper-liquid hype tokens fell by 8.5%. The activity resulted in a $4 million HLP fund, which is the liquidity buffer for the platform.
According to Lookonchain, the whale deposited $15.23 million into the superfluid to open up a huge ETH long position of 160,234 ETH, worth about $306.85 million. By using leverage from 13.5 to 19.2 times, traders controlled hundreds of millions of dollars of assets with real capital of only $23 million.
Initially, the position showed unrealized profits of $8 million. However, after the whale withdrew $17.09 million, margin levels dropped significantly, triggering a super-flowing automatic clearing system. Despite being liquidated, the trader still walked away with a profit of $1.86 million, while the HLP fund absorbed $4 million in losses.
Learn more: What is a hybrid?
What happens next to super flow?
This liquidation has raised concerns about potential vulnerabilities in hyperliquid risk management systems. Some businessmen suspect that complex strategies are used to leverage liquidation mechanisms to make profits. However, the overall risk remains limited, as the $4 million loss accounts for only 1% of the total value lock-in (TVL), which accounts for about 6.6% of its historical profits at $60 million.
One possible exploit involves intentionally lowering the edge level to trigger forced liquidation. Traders can open a huge position to make unrealized profits and then withdraw margin funds to prompt automatic liquidation. If they take an opposing position on another platform, they can take advantage of price fluctuations caused by liquidation events.
Comments and questions about ETH for 0xF3F4 users:
To be clear: There is no protocol exploit or hack.
The user’s PNL was not implemented, withdrawn, thus lowering its edge and liquidating. They ended with about $1.8 million from PNL. HLP has lost about $4 million in the past 24 hours. HLP’s…
– Hyperliquidx (@hyperliquidx) March 12, 2025
Although hyperliquidity has not confirmed any fraudulent activity, the platform has adjusted its leverage restrictions to prevent mass liquidation. However, questions remain about whether these measures are truly effective in preventing market manipulation.
What is mixed blood?
Super fluid Hype It is an advanced trading platform designed to revolutionize the way users interact with digital assets. It integrates state-of-the-art technology to provide an intuitive, high-performance trading environment that meets the needs of retail and institutional traders. By leveraging complex matching engines, hyperliquidity ensures execution with minimal slip lightning trade, enabling users to buy and sell assets with unparalleled precision.
The platform also adopts a deep liquidity pool and real-time order updates to maintain frictionless trading experience. With a user-friendly interface, automated risk management tools, and seamless one-click trading, hyperliquidity allows traders to effectively and firmly browse the digital asset market.
