And here is another crypto rollercoaster! This time starring HyperLiquid, a high-speed decentralized exchange, and JELLYJELLY, a Solana memecoin that turned into the main event of a wild trading war.
If you thought crypto was all about charts and tech jargon, this proves it's just as dramatic as any Hollywood thriller.
The Chaos Unleashed
It all kicked off when a trader went all in by placing a massive $6 million short bet on JELLYJELLY with 20x leverage. At the same time, a whale (or maybe a group of them) dumped a truckload of JELLYJELLY on decentralized exchanges, tanking its price.
As the price crashed, HyperLiquid’s liquidity vault (HLP) got stuck holding the bag, taking over the short position. Everything seemed fine until the price shot back up, and suddenly HLP was staring at a whopping $12 million in unrealized losses. Ouch.
Rival Exchanges Stir the Pot
Then things got even crazier. Out of nowhere, Binance and OKX listed JELLYJELLY futures, sparking rumors that these giants were piling on the pressure to squeeze HyperLiquid. Was it just a coincidence, or was there a deeper strategy at play? Let's guess we'll never know...
With chaos unfolding, HyperLiquid hit the emergency brakes, halting JELLYJELLY trading and delisting its perpetual contracts. The exchange said it was a necessary move to protect users and prevent further damage. Later, they promised to compensate affected traders through the Hyper Foundation.
After evidence of suspicious market activity, the validator set convened and voted to delist JELLY perps.
— Hyperliquid (@HyperliquidX) March 26, 2025
All users apart from flagged addresses will be made whole from the Hyper Foundation. This will be done automatically in the coming days based on onchain data. There is no…
The Industry’s Reaction
Not everyone bought HyperLiquid’s explanation. Bitget CEO Gracy Chen went full savage mode, comparing their response to the infamous FTX collapse. She called their handling of the situation "immature, unethical, and unprofessional," criticizing their decision to manually settle JELLYJELLY positions at a fixed price. Her take? An exchange lives and dies by trust, not just capital.
#Hyperliquid may be on track to become #FTX 2.0.
— Gracy Chen @Bitget (@GracyBitget) March 26, 2025
The way it handled the $JELLY incident was immature, unethical, and unprofessional, triggering user losses and casting serious doubts over its integrity. Despite presenting itself as an innovative decentralized exchange with a…
The Bigger Question: Is HyperLiquid Really Decentralized?
This whole mess left the crypto community side-eyeing HyperLiquid. They market themselves as a decentralized exchange, but the way they intervened in the JELLYJELLY situation has people wondering if they really are DeFi, or just another offshore exchange with a fancy label.
One thing’s for sure, crypto is still the Wild West. When you mix whales, memecoins, and high leverage, someone’s gonna get wrecked.
So the question is... who’s next?
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