Hyperliquid Delists Surging Solana Meme Coin to Avoid Liquidation Crisis

Decentralized Exchange Hyperliquid run perpetual futures for the Solana-Based meme coin Jellyjelly On Wednesday, the movement describes as crucial to guarantee the integrity of his network in the midst of an imminent liquidation crisis.

Hyperliquid uses its own high-speed blockchain, built on the Ethereum Low-2 network Arbitrumand the project said that the validators of the networks had convened to take ‘decisive action’, in a after on X (formerly Twitter).

The decision came after a hyperliquourer had opened a $ 6 million 20x lever on Jellyjelly who became toxic as the price of the Meme Munt increased. On X, spectators speculated That the user deliberately tried to liquidate himself, forcing the decentralized exchange to take over the bad gamble while it got out of hand.

On Thursday the price of Jellyjelly rose to $ 0.043, according to the crypto data provider Coentecko. Around 2.30 pm in the eastern time it changed owner around $ 0.023, with a jump of 73% on the last day.

Although Hyperliquid said that the decision to delete Jellyjelly was a collective choice, the movement led to the fact that some traders and observers in the industry claimed that it was contrary to decentralized finances, or Defistandards.

“Let’s stop pretending that Hyperliquid has been decentralized,” Arthur Hayes, co-founder and former CEO of the Crypto Exchange Bitmex, said On X.

Users who had Jellyjelly positions on the platform would be made at a later time “whole of the hyperliquid foundation”, said hyperliquid in the post. The Hyperliquid Foundation is a separate entity that is responsible for arranging the general direction of the project.

While the decentralized exchange began to settle the poisonous Jellyjelly bet, a community possession in the community took a hit the hyperliquidity provider (HLP).

The safe, where users can bundle funds and possibly earn a return while the HLP performs trading strategies and yields platform rates, saw its profit falling all time by $ 11 million, according to hyperliquid’s website. Those losses were then reversed.

Yet the development made the market for hype. The cryptocurrency, the native token of hyperliquid, saw the price falling almost 14% to $ 13.85 in the past day, from this letter.

The drama around Hyperliquid on Thursday echoed one $ 4 million loss That the HLP sustained earlier this month. A user on the decentralized exchange earned $ 1.8 million by liquidating himself and keeping the HLP with another bad gamble instead of selling.

When an investor accepts leverage, they borrow funds to control a greater position than usual. That position is often protected by collateral, which can be automatically sold by an exchange to cover losses if a leverage payment after a certain point acidifies.

Earlier this month, Hyperliquid said that it would reduce the amount of leverage for which traders had access Bitcoin and Ethereum. The project also said that it would increase the requirements for maintenance margin for leverage betting that are shaking in the direction of liquidation.

When the Hyperliquid validators chose Jellyjelly on Thursday, $ 3.7 million in Jellyjelly positions were arranged for a price of $ 0.0095 per token.

Doug Colkitt, founder of the Decentralized Trade Protocol Environmental financing, said On X that compelling jellyjelly’s so -called oracle Price links “The attacker with a small loss.”

On Thursday Crypto exchanges Binance and OKX changed eternal futures contracts for Jellyjelly, allowing their users to speculate on the meme coin that was that was launched As part of a marketing campaign for a podcast app months ago.

The price of meme coins, which act on little more than vibes, will often jump when a grant decides to sum up them. Some X users suggestedWithout providing evidence that the crypto exchanges tried to “bury a competitor” in the midst of the liquidation drama.

When it comes to the centralization of the Hyperliquid network, experts elevated Concern after North Korean portfolios began to use the platform in December. At the time, the network only had four validators.

Binance and OKX did not immediately respond to a request for comments from Decrypt.

Published by Andrew Hayward