Hyperliquid suffered a $4 million loss after a major investor pulled out of an Ethereum deal worth over $200 million.
As a result of the whale liquidation, wallet “0xf3f4” opened a highly leveraged 50x long position on ETH, depositing $4.3 million in USDC as margin for a position worth 113,000 ETH.
Posted by Shaurya Malwa | Edited by: Parikshit Mishra Updated: March 12, 2025 18:40 UTC Published: March 12, 2025 12:40 UTC
What you should know:
- A “whale” wallet on Hyperliquid opened a long position on Ether (ETH) worth $200 million, resulting in a $4 million loss for one of the protocol's storage facilities.
- The user withdrew funds, which reduced his margin below required levels, resulting in a $1.8 million profit for him but a $4 million loss for Hyperliquid Provider (HLP).
- In response, Hyperliquid plans to increase maximum leverage for Bitcoin (BTC) and ETH to 40x and 25x, respectively, to increase margin requirements for larger positions.
The liquidation of a long ether (ETH) position worth over $200 million resulted in a $4 million loss for Hyperliquid, which the whale had bet on.
As a result of the liquidation, wallet “0xf3f4” opened a long ETH position with high leverage of 50x, investing $4.3 million in margin for a total of 113,000 ETH.
The wallet then began withdrawing funds, causing its margin to drop below required levels, resulting in a $1.8 million profit for the user but a $4 million loss for Hyperliquid Provider (HLP).
Vaults are a blockchain-based product within Hyperliquid where users can deposit USDC to potentially receive a share of the profits generated from the trading strategies of other users or the vault owner.
These events sparked rumors among Hyperliquid users about possible abuse of the platform, which were denied in X's post.
“There was no exploit or protocol hack,” Hyperliquid said. “This user had unrealized PNL, withdrew funds, which reduced their margin, and they were liquidated. They ended up with ~$1.8M in PNL. HLP has lost ~$4M in the last 24 hours. HLP’s total PNL remains at ~$60M. As a reminder, HLP is not a risk-free strategy.”
Hyperliquid also added that it would update the maximum leverage for Bitcoin (BTC) and ETH to 40x and 25x, respectively, to increase margin requirements for large positions as a preventative measure in case similar events occur in the future.
Data shows that HLP storage Hyperliquid continues to post record profits of $60 million. Meanwhile, the platform's HYPE token plummeted from $14 to less than $13 after liquidation, although it has since fully recovered after a brief dip in late Asian trading hours.
