Hyperliquid Takes $4M Hit as Whale’s $200M ETH Position Gets Liquidated
A massive $200 million leveraged ether (ETH) trade collapsed on Hyperliquid, resulting in a $4 million loss for the platform’s Hyperliquid Provider (HLP) vault, while the trader behind the bet profited $1.8 million.
The High-Leverage Trade That Led to Liquidation
The incident involved wallet “0xf3f4”, which opened a 50x leveraged long position on ETH, using $4.3 million in USDC as margin to control 113,000 ETH.
The trader then began withdrawing funds, reducing the margin below the required maintenance level. This triggered an automatic liquidation, allowing the trader to secure a $1.8 million profit while leaving the HLP vault with a $4 million deficit.
Hyperliquid Responds to Exploit Rumors
The unusual trade quickly sparked speculation among users that Hyperliquid had suffered an exploit. However, the platform clarified the situation in a statement on X (formerly Twitter):
“There was no protocol exploit or hack. 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.”
Risk Management Adjustments and Market Reaction
To mitigate the risk of similar events in the future, Hyperliquid announced new leverage restrictions:
- Bitcoin (BTC) max leverage reduced to 40x
- Ether (ETH) max leverage reduced to 25x
Despite the short-term loss, Hyperliquid’s HLP vault remains profitable with an all-time gain of $60 million. Meanwhile, the platform’s HYPE token temporarily dropped from $14 to under $13 following the liquidation but has since recovered during late Asian trading hours.
