cryptoplaza

Hyperliquid suffered its second whale manipulation event in two weeks on Wednesday as a user shorted Solana memecoin JELLYJELLY on the decentralized exchange, forcing the protocol to assume hefty losses shortly after 😎🎩

Wallet address "0xde96" opened a short position on JELLYJELLY while a whale dumped the memecoin on DEXs, which crashed the token's price and forced Hyperliquid's HLP vault to take over the initial short position. The newly created wallet "0x20e8" then longed the token. The strategy exacerbated HLP’s unrealized losses to about $12 million, according to Lookonchain data.

While Hyperliquid raced to contain the situation, some users on social media suggested centralized exchanges that compete with Hyperliquid should list JELLYJELLY futures contract to incentivize more trading and possibly cripple the rival exchange…. 

https://www.theblock.co/post/348314/hyperliquid-delists-jellyjelly-memecoin-amid-whale-manipulation-fiasco

Another rough hit for Hyperliquid. These manipulation events highlight the risks of isolated markets and low-liquidity tokens. Curious to see if they adjust their risk parameters after this.