The decentralized exchange Hyper Liquid (HYPE) recently faced one of its biggest challenges as the sudden 500% growth in the price of JELLYJELLY resulted in a $12 million risk for the platform. Investigations indicate that the extreme growth of JELLYJELLY was due to market manipulation by a whale, but the Hyper Liquid team swiftly not only prevented losses but turned this threat into a $700,000 profit. Ultimately, to prevent a recurrence, JELLYJELLY was removed from the Hyper Liquid platform. The incident began when a trader shorted 124.6 million JELLYJELLY in an $8 million position. Simultaneously, another wallet, likely belonging to the same trader, opened a heavy long position on JELLYJELLY, causing a sharp price increase. According to experts, this move led to liquidating traders and huge profits for the targeted whale, serving as a precise strategy to exploit leverage and drain liquidity. However, the whale’s plan did not go as intended. The Hyper Liquid team restricted whale accounts to sell-only orders and by adjusting the JELLYJELLY price to $0.009, managed to liquidate the whale. This action resulted in various reactions, with some users praising the team’s swift actions while critics like Chen, the CEO of Bitget, likened Hyper Liquid’s behavior to a centralized exchange. It is worth noting that this was the second liquidity crisis for Hyper Liquid in the past two weeks, leading to a more than 30% drop in HYPE price in a month. You can track the prices of all tokens and cryptocurrencies live on the digital currency price page.
