Hypliquid, a blockchain-based permanent trading platform whose HLP liquidity fund suffered $4 million in losses in major liquidation on March 12, will begin on March 15, and the platform will require minimum margin for certain open locations to reduce systemic risk and protect liquidity stability within the extreme market volatility range in extreme markets.
Major liquidation forces are excessive to enhance risk management
A major liquidation caused Hypliquid’s HLP liquidity fund to lose $4 million, prompting the platform to quickly adjust its risk management policies. Although this is not a hacker or a technical failure, the incident has raised concerns about the security of liquid funds when handling large-scale transactions.
In response, Hyproliquid announced some key changes, including higher margin requirements for certain open locations. The move is designed to reduce systemic risks and protect liquidity funds from significant losses during extreme market volatility.
Learn more: What is a hybrid?
Super liquidity increases margin requirements after liquidation losses
On March 15, hyperliquidity will increase the minimum profit requirement for certain positions to 20% to reduce systemic risk. The move was due to a loss of $4 million from the HLP liquidity fund caused by large liquidation. Traders who exit collateral before liquidation transfer losses to the fund to make it stable. By strengthening profit rules, Hypliquid aims to enhance liquidity and create a safer trading environment.
Hyproliquid has processed more than $1 trillion in transaction volume to date and is the first DEX to compete for CEX scales. As the number and open interest continue to grow, testing of edge systems is getting bigger and bigger. Yesterday’s event highlighted an opportunity to strengthen…
– Hyperliquidx (@hyperliquidx) March 13, 2025
Despite the stricter requirements, traders can still use 40x leverage on new positions. Hypliquid’s purpose is to balance risk management with attractiveness to highly leveraged traders and improve its policy of maintaining market participation without compromising financial stability.
This $200 million liquidation – Call for hyperliquidity risk management
On March 12, a trader executed a unique strategy to liquidate long-term ETH positions that took about $200 million in a long-term. By withdrawing nearly all of its collateral before liquidating the post, they managed to avoid slipping and withdrawing from the trade without causing significant losses.
However, the strategy shifts the financial burden to a hyperliquid liquidity pool (HLP), which must absorb liquidation status, resulting in a loss of $4 million. Although not a system exploit or technical failure, the incident highlights vulnerabilities in the platform’s risk management framework.
In response, hyperliquidity tightens its margin requirements, increasing the minimum profit for certain open locations to 20%. This adjustment is designed to enhance liquidity protection and mitigate the risk of similar losses in the future. However, stricter margin rules may also make the platform less attractive to highly leveraged traders, raising questions about its long-term competitiveness.
Whether these measures will help hyperliquids maintain their market advantage remains to be seen, but the incident highlights the need for continued improvement in risk management.
Learn more: Superfluid causes $4 million in losses from a single liquidation
About super-flow
Super fluid Hype It is a permanent futures trading platform that provides fast execution and low fees, similar to centralized communication while maintaining the decentralized functionality of Web3. This unique combination allows supermobile to attract more and more traders and establish themselves as a leader.
Vaneck’s report shows that hyperliquidity accounts for 70% of the permanent future market, surpassing GMX and DYDX. Defilama data also reported $340 million in TVL and $180 million in daily trading volume, highlighting its strong liquidity and market advantages.
