According to Hyperliquid's announcement, due to abnormal trading events in the JELLY market, users holding long positions in JELLY will receive compensation at a price of 0.037555 during settlement. This compensation is beneficial to all JELLY traders, except for the marked address. Event Review:
A trader closed a JELLY position worth 4 million USDC at a price of 0.0095.
Subsequently, JELLY's price increased by more than 4 times, triggering HLP to repurchase and liquidate the position, resulting in a loss of HLP's account value.
Although the 4 million USDC position did not exceed the dynamic open interest (OI) limit, triggering the automatic limit did not prevent further opening of positions.
The key issue is that after HLP took over the position, it shared collateral with other strategy components and did not trigger automatic position reduction (ADL).
Hyperliquid has strengthened risk management, including:
HLP Liquidity Management: Set stricter account value limits, reduce rebalancing frequency, and introduce more complex repurchase clearing logic. If the loss of the liquidator exceeds the threshold, it will trigger ADL instead of automatically using collateral from other components.
OI upper limit dynamic adjustment: The upper limit of open interest will be dynamically adjusted based on market value.
Asset removal mechanism: validators will remove assets below the threshold through on chain voting.
Hyperliquid promises to continue optimizing the system and enhancing its risk prevention capabilities.
