- A single trader exploited Hyperliquid‘s XPL futures market, earning a $15 million profit.
- The exploit caused millions of dollars in losses for other traders and drew criticism about risk controls.
- The trader manipulated the price of XPL futures by 200% on Hyperliquid, while prices stayed stable on other exchanges.
- Hyperliquid responded that the platform functioned as intended but will now consider using external price data for certain products.
- This incident highlights the risks of trading new or illiquid token futures on decentralized platforms.
A trader on Hyperliquid used a large amount of funds to exploit vulnerabilities in the platform’s XPL perpetual futures market on Wednesday. The trader made a profit of $15 million and triggered significant losses for others, after inflating the value of XPL contracts by 200%.
The incident led to outcry from affected traders, who questioned why Hyperliquid lacked safeguards to stop such price manipulation. In response, the protocol stated that its systems worked as designed, describing pre-launch markets as unpredictable, but said it will start referencing external prices for pre-launch perpetual futures if available.
According to Monolith, a crypto hedge fund, the trader specifically targeted Hyperliquid because it lacked the controls placed by other platforms like Binance and Bybit. These other exchanges limit open interest and use outside price feeds to prevent manipulation in markets with low trading activity. Monolith and several other losing traders claimed Hyperliquid offered no protection against wealthy traders moving the market. “This was not simply about a whale’s action, but about the mechanics of how it was possible to force the price up on Hyperliquid while other exchanges remained stable,” Monolith stated.
The exploited market centered on XPL, the native token of the upcoming Plasma blockchain. The trader bought up all available futures contracts, causing the XPL price to rise from $0.60 to $1.80 in minutes. Traders who had taken short positions—betting the price would fall—were forced to close positions at a loss, further pushing up the price and adding to the trader’s profit. Onchain data shows the trader quickly sold their contracts for a $15 million gain. The trader’s identity has not been confirmed, though some speculation on social media suggests possible high-profile crypto figures.
Open interest for XPL futures on Hyperliquid grew to $257 million, nearly double that on Binance, according to Omer Goldberg of Chaos Labs. Markets on Binance and Bybit did not see the same volatility, highlighting the protective effect of their trading limits and external pricing mechanisms.
Experts say price manipulation in thinly traded token markets is a broader risk, not unique to Hyperliquid. Nicholas Roberts-Huntley of Blueprint Finance explained that large trades in markets with little liquidity can lead to sudden price changes. He emphasized that traders need to understand the specific rules and risks of different platforms before participating.
Previous incidents have also occurred on Hyperliquid. In March, a similar manipulation in the JELLY futures market resulted in a $13.5 million loss for the market maker vault as reported by Coindesk.
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