Hyperliquid, a trading-focused blockchain, faced substantial financial losses and market manipulation concerns following a sharp increase in JELLY's price.
JELLY Price Surge and Manipulation
The recent sudden rise in JELLY's price raised alarm about possible market manipulation. One wallet opened a massive short position on the HyperliquidX platform and then withdrew its margin, causing $4.5 million in short positions to be liquidated, which Hyperliquid had to cover.
Hyperliquid's Quick Action
Hyperliquid swiftly decided to delist JELLY from the platform, setting a settlement price at $0.0095 to prevent further losses. The company assured users that their funds were safe and announced compensation for affected clients, excluding those with suspicious activities.
Concerns About Hyperliquid's Decentralization
The incident raised questions about Hyperliquid's decentralization degree. The platform's decision to intervene and settle trades led to debates over whether it operates as a centralized exchange. This created uncertainty about the Hyperliquid token, HYPE, and future prospects of the platform.
The JELLY incident highlighted the importance of security on the platform and raised questions about decentralization while drawing attention to potential manipulation threats in the crypto space.
