The HyperLiquid platform has found itself at the center of a new market manipulation incident, raising questions about its security and governance protocols. The latest case involves a sudden price surge of the $JELLY token.
Market Manipulations with $JELLY Token
According to the blockchain analytics firm Lookonchain, the main issue was a sharp 230% increase in the $JELLY token price, which led to an unrealized loss of approximately $12 million for the Hyperliquidity Provider (HLP). The token’s price soared to $0.16004 within an hour, potentially leading to a $240 million liquidation if it had reached $0.17. Analysis from Arkham Intelligence revealed the manipulation scheme involving address 0xde95, which opened a substantial short position.
Platform's Response and Prevention Measures
Following the incident, HyperLiquid announced it would delist the $JELLY token to avoid larger losses and promised compensation to affected users. This is not the first time HyperLiquid has faced issues: previously, the platform suffered losses due to the liquidation of a $200 million Ether position.
Debates on HyperLiquid's Centralization
The $JELLY incident has sparked a debate about HyperLiquid's decentralization. Members of the crypto community, such as Arthur Hayes and Gracy, criticized the platform's approach to the situation. The main concerns focus on how the platform handles manipulations and the extent to which its actions depend on centralized management.
The incidents on the HyperLiquid platform reveal critical questions about its security mechanisms and level of decentralization. Despite the measures taken, the continuation of such events could undermine user trust.
