$4M Wiped from Hyperliquid After Massive $200M Ether Trade Unravels

Hyperliquid Loses $4M as Whale’s $200M Ether Trade Gets Liquidated

A high-stakes leveraged bet on ether (ETH) ended in liquidation, resulting in a $4 million loss for Hyperliquid’s HLP vault, while the trader behind the position walked away with a $1.8 million profit.

The Trade That Led to Liquidation

The event centered around wallet “0xf3f4”, which opened a 50x leveraged long position on ETH, depositing $4.3 million in USDC to control a massive 113,000 ETH position.

The trader then began withdrawing funds, reducing the margin below the maintenance threshold, which ultimately led to forced liquidation. While the user secured a $1.8 million profit, the Hyperliquid Provider (HLP) vault absorbed a $4 million hit.

Addressing Exploit Concerns

Following the incident, speculation arose among Hyperliquid users regarding a possible exploit. However, the platform denied any security breach, explaining in an X (formerly Twitter) post:

“There was no protocol exploit or hack. This user had unrealized PNL, withdrew, which lowered their margin, and was liquidated. They ended with ~$1.8M in PNL. HLP lost ~$4M over the past 24h. HLP’s all-time PNL remains at ~$60M. As a reminder, HLP is not a risk-free strategy.”

Risk Adjustments and Market Reaction

To prevent similar liquidations from impacting the vault in the future, Hyperliquid announced new leverage limits:

• Bitcoin (BTC) max leverage reduced to 40x
• Ether (ETH) max leverage reduced to 25x

Despite the loss, Hyperliquid’s HLP vault maintains an all-time profit of $60 million. Meanwhile, the platform’s HYPE token briefly dropped from $14 to under $13 in response to the liquidation but has since rebounded as of late Asian trading hours.