Hyperliquid Saved Itself a $15 Million Loss, but Sparked Criticism - Ep. 807

Unchained

Laura Shin

News, Tech News, Business News

4.5 • 1.3K Ratings

🗓️ 28 March 2025

⏱️ 43 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Perpetual swap DEX Hyperliquid suffered a whale attack and was on the brink of losing $15 million. It promptly responded in a way that generated a fair amount of controversy. The founder and CEO of Ambient Finance Doug Colkitt joined the show to explain: How perp swaps work How a whale used the low-liquidity memecoin $JELLY to attack Hyperliquid’s vault How Hyperliquid’s response broke DeFi taboos around decentralization, oracles, etc. Criticisms of and justifications for the team’s decisions What can be done to prevent similar attacks in the future Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com Thank you to our sponsors! BitKey: Use code UNCHAINED for 20% off FalconX Mantle Guest Doug Colkitt, Founder and CEO of Ambient Finance Links Accounts of the $JELLY whale attack on Hyperliquid and its response X: The story X: Nuking the vault X: How Hyperliquid responded Arguments for and against Hyperliquid’s solution: ZachXBT: ZachXBT calls out alleged hypocrisy Jordi Alexander: Shorting on a perp is not robust Jose Maria Macedo: How do they override the oracle price? Doug: Closing positions at an arbitrary price Gracy Chen: Casting doubts on integrity Steven.hl: In defense of HL Kam: Of course quorum was reached easily What precedent Hyperliquid’s actions set Kevin Zhou: Binance and OKX set a precedent Timestamps: 👋 0:00 Intro 🤔 02:59 What is Hyperliquid? 🐳 05:16 How a whale used $JELLY to attack ⛔ 09:19 How Hyperliquid responded 📈 11:59 Why did Binance and OKX suddenly list the memecoin? 🤔 16:32 How did Hyperliquid ‘change the rules’ to protect themselves? ⚖️ 19:25 ‘Losses for thee, but not for me’: Hyperliquid’s hypocrisy? 💡 24:39 Doug’s ‘cleaner’ solution 👀 28:35 Will this have positive or negative knock-on effects? 🧹 31:20 Tidying up illiquid markets 📰 32:46 Crypto News Recap Learn more about your ad choices. Visit megaphone.fm/adchoices

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0:18.9	Another, how far do you go, right? Is it North Korea? Is it any time either tax evader or somebody
0:25.4	else is on it? Any time, right, like there's a government subpoena, do you have to comply with it?
0:30.3	So there's kind of this slippery slope argument. That being said, right, they did convene to change
0:36.6	the rules or, you know, go different than kind of
0:40.1	what the rules they committed to are. So I think, right, that's where Zach's argument is coming in,
0:45.2	is that, boy, if it's, you're looking at your own losses, you know, they're definitely
0:50.5	have the potential kind of conflict of interest there're motivated reasoning from their, from their side.
0:55.9	So if you can arbitrarily change the rules for one thing, why can't you arbitrarily change the rules for the other thing?
1:00.8	It's a tough question.
1:02.0	There's good arguments on either side, to be honest.
1:09.2	Hi, everyone. Welcome to Unchained. You're no-hype resource for all things crypto. I'm your host,
1:14.0	Laura Shin. We are now featuring quotes from listeners on the show. Today we have a comment
1:18.4	responding to my interview with the Ethereum Foundation Research co-leads Alex Stokes and Barnaby Mono.
1:25.2	Unchain Yoda writes, don't think EF needs more research,
1:29.2	maybe more shipping in fraud.
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1:37.7	This is the March 28th, 2025 episode of Unchained.
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