The Chopping Block: Inside the $19B+ Perp Crash, ADL Explained, Binance’s USDe/Staked-Token Depeg, and the Hyperliquid Whale Debate

Unchained

Laura Shin

Tech News, Business News, News

4.6 • 1.3K Ratings

🗓️ 14 October 2025

⏱️ 58 minutes

🔗️ Recording | iTunes | RSS

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Summary

Welcome to The Chopping Block — where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner chop it up about the latest in crypto. This week, Doug Colkitt, Founder Ambient Finance & Founding Contributor at Fogo, joins us as one of the wildest weekends in crypto history drags us back on air: a record $19B+ in liquidations, gas spiking toward $400, exchange APIs wobbling, and ADL ripping through perps as hedges vanished. We unpack what ADL actually does, why delta-neutral farmers got nuked, and how Binance’s USDe and staked ETH/SOL pegs snapped amid index design and mint/redeem gaps—followed by refunds. We get into HLP vs. LLP (vaults vs. winning traders), the Hyperliquid “whale” short ahead of the tariff tweet, cross-margin reflexivity that torched alts, and why market makers wore outsized pain. Then we zoom out to infra: sequencers, force-inclusion in practice, and the case for on-chain clearing plus real insurance funds before the next Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform. Show highlights 🔹 Record wipeout — $19B+ liquidations, 1.6M traders rekt, gas spiking to ~$400 while major exchanges wobbled. 🔹 ADL, decoded — What happens when perps run out of counterparties; socialized losses, P&L/leverage ranking, and why hedges vanished. 🔹 Delta-neutral nuked — Cross-venue long/short farmers turned naked as ADL picked off one leg first. 🔹 Binance peg breaks — USDe to ~$0.68 on Binance, staked ETH/SOL snapped; refunds >$250M after index/oracle and mint-redeem gaps. 🔹 Flows vs. “attack” — Earn users rushing to USDT + copy-trade momentum likely amplified the depeg more than cunning index games. 🔹 DeFi vs. CeFi — Perp DEX performance broadly comparable; transparency gaps in ADL policies and liquidation mechanics laid bare. 🔹 Vaults vs. traders — HLP vs. LLP outcomes show who platforms chose to protect in tail events—and the retention risks of clipping winners. 🔹 OI collapse — Hyperliquid open interest ~15B → ~6B; cross-margin reflexivity helped nuke alts far worse than BTC. 🔹 Why it felt one-sided — Market-maker/API failures and risk misallocation made typically “safe” actors eat outsized losses. 🔹 The whale short — A massive Hyperliquid short pre-tariff tweet sparks insider-vs-coincidence debate. 🔹 Infra faceplants — Sequencers down, force-inclusion in theory only, docs offline—while base L1s largely kept ticking. 🔹 What to fix — On-chain clearing, real insurance funds, sane ADL ranking, robust mint/redeem, and better index/oracle design before the next shock. Hosts ⭐️Haseeb Qureshi, Managing Partner at Dragonfly ⭐️Robert Leshner, CEO & Co-founder of Superstate⭐️Tarun Chitra, Managing Partner at Robot Ventures⭐️Tom Schmidt, General Partner at Dragonfly Guest ⭐️ Doug Colkitt, Founder Ambient Finance & Founding Contributor at Fogo ⁠⁠Disclosures⁠⁠ Timestamps 00:00 Intro 01:11 $19B+ Liquidated 04:35 Personal Experiences & Reactions 08:30 Understanding Auto De-leveraging (ADL) 14:37 Binance & USDe Incident 23:19 DeFi vs CeFi Performance 26:05 Zero-Sum & Greedy Algorithms 34:26 Vaults & Trader Protection 39:43 Market Reactions & Trader Sentiments 44:33 Infrastructure Failures & OI Collapse 46:56 Insider Trading Allegations & Market Manipulation 52:14 Future of Perpetual DEXs Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	How did you experience it?
0:01.2	I guess I had a different experience.
0:02.5	I actually think it's funny to think of like VCs as like the FEMA
0:05.6	showing up after the hurricane type of thing.
0:09.4	That's like kind of like, you know, making podcasts and tweet threats about it.
0:13.0	I did put on my little red cross.
0:16.2	Not a dividend.
0:17.4	It's a tale of two pawn.
0:18.5	Now your losses are on someone else's balance. Generally speaking, air drops are kind of pointless anyways. Unimmed trading firms who are very involved. Dalek.Eat is the ultimate puns. Defi protocols are the antidote to this problem. Hello everybody. Welcome to the chopping block. Every couple weeks, the four of us get together and give the industry insider's perspective on the crypto topics of the day so quick controls just you got tom the defy
0:40.8	maven and master of memes hello everyone next you got robert the crypto connoisseur and czar of
0:46.2	super state good morning next we've got toroon the gigabrain and grand poobah at gauntlet yo
0:52.5	joining us today we've got special guest, Doug Colquitt, liquidity luminary at Ambien Finance and Fogo. Hello. And I'm a C, the head hype man at Dragonfly. We are early-stage investors in crypto, but I want to caveat that nothing we say here is investment advice, legal advice, or even life advice. Please see chopping blocks at XYZ for more disclosures. So we were actually planning to take this week off, but unfortunately we were
1:15.3	brought back on the job on overtime because we have just experienced the most wild weekend,
1:22.3	potentially in crypto history, the single largest day of liquidations ever. It was an absolutely chaotic weekend,
1:29.9	and it all really happened on Friday. So Friday, for those of you who were somehow not
1:34.9	paying attention to what's going on in the world, I wasn't paying attention. Trump issued
1:39.3	massive threats against China for withholding rare earths from the U.S. and basically said, we're coming
1:45.7	back at you new round of tariffs, and this time they're bigger, they're badder than ever.
1:49.8	He elicited this threat late on Friday evening, US time.
1:53.8	And this caused markets to immediately crash.
1:57.2	And crypto markets crashed much more severely than almost anything else because, of course,
2:01.4	crypto could continue trading even as markets closed on Friday evening.
	...

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