DeFi Trader Pulls Off $4M Heist on Hyperliquid: 😱💸🚨

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🚨 Attention, dear readers! A cunning DeFi trader has managed to pull off a $4 million heist on Hyperliquid, a decentralized perpetual trading platform. The trader exploited the HLP vault, leaving the DeFi trading community in shock and disbelief. 😱

The trader, who had an open long position on ETH, withdrew equity in a way that triggered an auto-liquidation event. As a result, the vault was forced to take the opposing side of the trade, leading to a significant loss of around $4 million. 💰

While some may see this as an exploit, the Hyperliquid team clarified that there was no hack or exploit involved. The trader simply withdrew unrealized PnL, which lowered their margin and led to their position being liquidated. 😒

Regarding commentary and questions on the 0xf3f4 user’s ETH long:

To be clear: 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…

— Hyperliquid (@HyperliquidX) March 12, 2025

Following the incident, the Hyperliquid team has updated the leverage limit for BTC and ETH to 40x and 25x, respectively, in order to provide “better buffer for backstop liquidations of larger positions.” 📈

As details of this event remain scarce, some analysts speculate that the trader strategically exited positions and targeted the HLP to absorb losses while securing unrealized profits for themselves. This has sparked discussions about potential improvements in Hyperliquid’s liquidation mechanisms that would prevent similar exploits in the future. 🤔

Although the vault has total value locked (TVL) of approximately $450 million and the loss represents merely 1% of its holdings, the DeFi community is left wondering how this could have happened. 🧐

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2025-03-12 21:25