Hyperliquid Hit Again: $12M Lost to Whale's Market Attack on $JELLY

Polymarket betting manuplation

The blockchain smart contract based prediction platform Polymarket acknowledged a governance attack involving a large holder of UMA tokens who manipulated its oracle to influence a market resolution.

Between March 24 and 25, a $7 million Polymarket bet, "Ukraine agrees to Trump mineral deal before April?" surged from a mere 9% yes chance to a 100%, sparking controversy and speculation of coordinated manipulation. The $7 million bet resolved to a "yes" despite Ukraine not yet officially agreeing to U.S. President Donald Trump's deal aiming to gain access to Ukraine's critical mineral resources.

UMA token's token was recognized by this incident, ironically.

Polymarket said the market resolved against expectations but stated it would not issue refunds as it wasn’t considered a market failure.

Another big drawdown of HLP

Hyperliquid vault had another big drawdown since the last ETH incident.

According to https://x.com/lookonchain/status/1904902828319269068, a whale holding 126 million $JELLY (jellyjelly) manipulated the coin price, by first dumping $JELLY, causing a price crash, which made HLP to hold a passive short position of 398 million $JELLY (approximately 15.3 million USD). Then the address bought back $JELLY, driving up the price, causing HLP to realized nearly 12 million USD loss.

Clearly HLP vault becomes a vulnerable target now.

Hyperliquid terminated trading of $JELLY perp and later announced to cover the loss from foundation treasury, meanwhile Binance and OKX immediately listed $JELLY perp.

I don't think such risk only exists in $JELLY, but if Hyperliquid imposes a stronger risk mechanism, and much less conservative LP mode, is that still interesting for retail traders?

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