Hyperliquid Takes $4M Hit After Whale’s $200M ETH Trade Collapses

A highly leveraged ether (ETH) trade worth over $200 million unraveled on Hyperliquid, leading to a $4 million loss for the platform’s Hyperliquid Provider (HLP) vault, while the trader behind the position walked away with a $1.8 million profit.

The High-Risk Bet That Backfired

The trade was executed by wallet “0xf3f4”, which opened a massive 50x leveraged long position on ETH, using $4.3 million in USDC as margin to control 113,000 ETH.

Shortly after, the trader withdrew funds, reducing the position’s margin below the required maintenance level. This triggered a forced liquidation, allowing the trader to pocket $1.8 million, while the HLP vault absorbed a $4 million loss.

Community Speculation and Hyperliquid’s Response

The unusual series of events fueled speculation about a potential exploit, prompting Hyperliquid to issue a statement on X (formerly Twitter) denying any security breach:

“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 all-time PNL remains at ~$60M. As a reminder, HLP is not a risk-free strategy.”

Adjustments to Prevent Future Losses

In response to the incident, Hyperliquid announced changes to its leverage limits:

• Bitcoin (BTC) max leverage reduced to 40x
• Ether (ETH) max leverage reduced to 25x

Despite the setback, Hyperliquid’s HLP vault remains in profit with an all-time gain of $60 million. Meanwhile, the platform’s HYPE token briefly dropped from $14 to under $13 following the liquidation but has since fully recovered during late Asian trading hours.