Hyperliquid Whale Passes $4M Loss to HLP Vault

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Hyperliquid whale trader, 0xf3F, opens a 50x ETH long trade with a position value of over $300M on Hyperliquid, with their liquidation price a mere 1.6% from their average entry price. The position quickly grows in profit as copy traders pile in and bears close out their shorts. But instead of closing their position, 0xf3F begins withdrawing collateral from their account, raising the liquidation price on their position. Eventually, the position was liquidated at a price of $1,915, netting the trader over $1.86M in profit.

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However, in order to close out the position, ownership of the position was transferred to the Hyperliquidity Provider (HLP) vault. Due to the size of the position, the slippage involved in closing the position resulted in $4M of losses incurred by the HLP vault.

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The Hyperliquid team has since reduced leverage offered to 40x and 25x on BTC and ETH respectively, seeking to mitigate future similar trades. However, many of the HLP vault depositors have seen their confidence shaken, with the vault seeing over $130M in withdrawals over the past day.