Following a trading incident involving JELLY resulting in a $10.63 million loss, Hyperliquid has introduced additional security measures.
Incident Causes
The problem resulted from a rogue trader who self-traded a sizable JELLY position, causing a price spike and triggering a liquidation process, leading to Hyperliquid’s market-making vault absorbing the loss.
New Security Measures
Hyperliquid has made several changes to improve risk management: strict limits on the liquidator vault, reducing rebalancing frequency, revising the liquidation trigger mechanism, and introducing dynamic adjustments of open interest caps.
Market Reaction
Hyperliquid continues to face challenges: the total value locked in its liquidity vault has dropped from $540 million in February to $180 million, and HYPE token continues to decline in price and trading volume.
Despite implementing new measures, Hyperliquid faces significant challenges to stabilize its platform and regain user trust.
