Bucket shop
@bounty69
Crazy How a Trader Makes Money Out of Liquidation A whale just turned a liquidation into a $1.8M profit, leaving Hyperliquid’s HLP vault with a $4M hole! No hacks, just clever trading mechanics. Let's unpack this move. 🧵👇
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Bucket shop
@bounty69
The Setup: Whale deposits $10M USDC, opens a massive $271M ETH long (50x leverage). But here's the kicker—rather than closing normally (and facing huge slippage), they withdraw collateral, triggering liquidation.
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Bucket shop
@bounty69
The Genius Move: By withdrawing funds, they forced Hyperliquid’s vault (HLP) to absorb the position. As ETH price slipped, the vault suffered a ~$4M loss. Meanwhile, the trader walked away with a clean $1.8M.
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Bucket shop
@bounty69
Hyperliquid Reacts: To avoid repeats, they reduced leverage—40x for BTC, 25x for ETH. But does reducing leverage solve the deeper issue? High leverage and liquidation mechanics remain a vulnerability.
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