Ahboyash Reads

https://x.com/lookonchain/status/1899722716971684200

The "insider" trader seems to be exploiting vulnerabilities in Hyperliquid's system, particularly affecting the HLP (Hyperliquidity Provider) vault.

The trade
- Build a massive position: the trader deposited 10M USDC into Hyperliquid and built up a long ETH position reaching approximately 141,013 ETH (worth $271.6M).
- Used high leverage (estimates mention 13.5x to 19.2x) to control a notional exposure of approximately 270-336M with only about $23M in underlying capital
- Eventually liquidated for 160,234 ETH (worth about $306.85M), which appears to have been a deliberate strategy rather than a mistake (?)

Potential Exploitation Strategy
- Potential deliberate attack on Hyperliquid's liquidity engine and HLP vault
- Forced Liquidation: The trader may have intentionally triggered their own liquidation, possibly by withdrawing capital to force the liquidation price to be hit
- HLP vault was "hurt" by this action and was "long $286m in ETH" after the event (took on his posiiton), suggesting the vault had to absorb the trader's position
- The trader may have been exploiting how the HLP vault handles large liquidations

Why This Is Exploitative
- HLP vault works by sharing profits and losses among depositors. By forcing such a large liquidation, the trader may have:
1. Created forced buying or selling that moved market prices in their favor
2. Potentially passed losses to HLP vault participants
3. Exploited the liquidation mechanism for their own gain, possibly holding offsetting positions elsewhere

Extracted $1.86m profit: https://x.com/lookonchain/status/1899752014596510076

X (formerly Twitter)

Lookonchain (@lookonchain) on X

This whale—possibly trading with insider info—is making a high-risk long bet on $ETH!

The position has grown to 73,076 $ETH($138.75M), with an unrealized profit of over $1M in just 10 minutes!

Liquidation price: $1,854.4
https://t.co/xSGdBsxN4A

www.tgoop.com/ahboyashreads/11032

19.4K viewsedited  Mar 12 at 09:22

https://x.com/lookonchain/status/1899722716971684200

The "insider" trader seems to be exploiting vulnerabilities in Hyperliquid's system, particularly affecting the HLP (Hyperliquidity Provider) vault.

The trade
- Build a massive position: the trader deposited 10M USDC into Hyperliquid and built up a long ETH position reaching approximately 141,013 ETH (worth $271.6M).
- Used high leverage (estimates mention 13.5x to 19.2x) to control a notional exposure of approximately 270-336M with only about $23M in underlying capital
- Eventually liquidated for 160,234 ETH (worth about $306.85M), which appears to have been a deliberate strategy rather than a mistake (?)

Potential Exploitation Strategy
- Potential deliberate attack on Hyperliquid's liquidity engine and HLP vault
- Forced Liquidation: The trader may have intentionally triggered their own liquidation, possibly by withdrawing capital to force the liquidation price to be hit
- HLP vault was "hurt" by this action and was "long $286m in ETH" after the event (took on his posiiton), suggesting the vault had to absorb the trader's position
- The trader may have been exploiting how the HLP vault handles large liquidations

Why This Is Exploitative
- HLP vault works by sharing profits and losses among depositors. By forcing such a large liquidation, the trader may have:
1. Created forced buying or selling that moved market prices in their favor
2. Potentially passed losses to HLP vault participants
3. Exploited the liquidation mechanism for their own gain, possibly holding offsetting positions elsewhere

Extracted $1.86m profit: https://x.com/lookonchain/status/1899752014596510076

BY Ahboyash Reads