- HyperLiquid lost over $10 million after a sudden 230% surge in JELLY’s price triggered massive liquidations.
- Suspicious trades from two wallets pointed to possible market manipulation, sparking the chaos.
- The platform delisted JELLY and pledged full compensation to users not linked to flagged addresses.
It was fast. Too fast.
Within the span of an hour, the price of $JELLY rocketed up by 230%, blindsiding HyperLiquid and wiping out millions. The result? An estimated $10.63 million loss and a scramble to delist the token before things spiraled even worse.
A Treasury Bet Gone Sideways
HyperLiquid’s treasury had automatically taken on a $5 million short position in JELLY—not unusual, but dangerous when things go parabolic. As the token suddenly surged to around $0.16004, unrealized losses piled up—over $10 million, just like that. Had JELLY pushed to $0.17? HyperLiquid could’ve been staring down the barrel of a $240 million liquidation. Total disaster.
Was It Manipulation? It Sure Looks Like It.
So what happened? Coordinated manipulation, allegedly.
One wallet, tagged as 0xde95, opened a monster short position—430 million JELLY tokens. Then, without warning, they pulled their margin. Boom. Liquidations started firing off, nearly $4.5 million worth. HyperLiquid’s treasury ended up holding the bag.
At the same time, a fresh wallet—0x20e8—stepped in, going long on JELLY. Coincidence? Doesn’t look like it. The trades pushed the price higher, squeezing shorts and slamming the treasury with the losses.

Delisting JELLY: Emergency Response
The validator committee didn’t wait long. JELLY was delisted and force-settled at $0.0095, way below the pumped-up price, to stop the bleeding. HyperLiquid stated the move was necessary to “protect HLP users” and called the whole situation a “clear exploit.”
To soften the hit, short positions were settled at the original price—$0.0095—so no one else got caught in the mess. The platform also confirmed that all non-flagged wallets will be fully compensated. Straight from the Hyper Foundation.
“All users apart from flagged addresses will be made whole from the Hyper Foundation.”
Is HyperLiquid Really Decentralized?
The whole mess stirred up deeper conversations about the platform itself. Arthur Hayes, a familiar voice in crypto, didn’t hold back:
“Let’s stop pretending that Hyperliquid is decentralized… I bet HYPE will soon return to square one because the decline will continue to decline.”
Oof.
Final Thoughts: A Wake-Up Call for DeFi?
A sharp price move, a platform-wide panic, and some serious finger-pointing—it’s not the first time this kind of thing has happened in crypto, but it still stings.
HyperLiquid’s quick reaction may have saved it from total disaster, but trust? That’s a harder thing to restore. Especially when decentralization starts to look more like a buzzword than a reality.