Decoding HyperLiquid’s $22 million plundering war

In March 2025, when Trump's policies and the Federal Reserve's expectations of interest rate cuts were intertwined, a thrilling capital hunt took place on the decentralized derivatives platform HyperLiquid. A mysterious trader codenamed 0xf3 (, with 50x leverage, precise event-driven and rule loopholes, raked in 22 million US dollars in just half a month, and plundered 2 million US dollars in profits from the platform's treasury by "harvesting through positions". This operation not only exposed the fatal weakness of the DeFi protocol, but also set off a "whale hunting operation" initiated by KOLs such as Sun Yuchen.

1. Timeline review: From 6.8 million in profits to the terrifying 72 hours of "harvesting through positions"

1. March 2-3: Trump's tweets triggered a "leverage blitzkrieg"  

• Event-driven: Trump announced that Bitcoin would be included in the US strategic reserve, causing BTC and ETH to surge by more than 15% in a single day.

• Giant whale operation: With 50x leverage, he went long on HyperLiquid and closed his position for a profit of $6.8 million within 24 hours, with a cost-return rate of 1200%.

• Market significance: This precise attack in the "news market" established the rumors about him as an "insider".

March 10-12: ETH long order carnival and position-breaking trap

• Extreme leverage: On March 10, two ultra-short ETH long orders both won 2.2 million US dollars with a 100% winning rate; on March 12, 5.22 million USDC was deposited, and 140,000 ETH long orders (worth 270 million US dollars) were established with 50 times leverage, accounting for 24.65% of the total ETH position on the platform.

• Margin harvest:

• Withdrawal loophole: When the position had a floating profit of 3.1 million US dollars, the whale tried to withdraw 17 million USDC (far exceeding the margin of 15.23 million), triggering system liquidation.

• Platform buy order: As the price of ETH fell below the liquidation price during the liquidation, the HyperLiquid Treasury (HLP) was forced to take over the position at $1,910, incurring a loss of $4 million, while the whale locked in $2 million and left.

• Technical defects: Allowing the withdrawal of floating profits and not limiting large leverage orders, turning HLP into a "cash machine".

The dramatic turn occurred between 17:05 and 17:08. According to Hyperscan data, the whale tried to withdraw cash continuously without closing its positions. It first failed due to "exceeding the single transaction limit", and then withdrew $17 million in two transactions (8 million and 9 million USDC), exceeding its 15.23 million USDC margin. The remaining positions were quickly liquidated, and at 17:08, 140,000 ETH were taken over by HLP at $1,915. As the price of ETH fell to $1,910 during the liquidation, HLP incurred a loss of about $4 million, while the whale locked in a profit of $2 million and left. This "short position" operation shocked the community, and Hyperliquid immediately announced that the maximum leverage of BTC and ETH would be reduced to 40 times and 25 times, respectively, in an attempt to fix the loophole.

March 13-14: Cross-platform expansion and LINK turmoil

On March 13, the whale extended its tentacles to GMX, opened a short order of 45.17 million US dollars in ETH, and at the same time went long on the ETH/BTC exchange rate on Hyperliquid, accurately seizing the opportunity when the exchange rate fell to 0.0228, and made a profit of 2.15 million US dollars. On the 14th, he switched to LINK, invested 14.98 million US dollars to buy 506,000 LINK (cost 13.93 US dollars), and opened 10 to 23 times more orders on Hyperliquid and GMX, and closed the position after the operation and made a profit of 1.27 million US dollars. However, the 20x LINK long order was liquidated at $13.6857, with a loss of 1.07 million USDC. The market was abuzz with discussions, and Hyperliquid quickly reduced the LINK leverage limit from 20x to 10x, showing its vigilance against whales.

March 15-17: Whales sniping shorts and platform risk control upgrades

On March 15, the whale used 40 times leverage to snipe BTC short orders on Hyperliquid, with a cumulative position size of US$330 million and a maximum floating profit of US$6.2 million. Later, it used the TWAP algorithm to stop profits in batches of US$5.6 million; during the same period, it added 44.97 times of BTC short orders on GMX, with a total size of US$194 million and a profit of US$3.05 million.

Platform News: Hyperliquid announced that its trading volume had exceeded the $1 trillion milestone on the same day, and simultaneously raised the BTC margin rate from 5% to 20%, directly targeting high-leverage speculators. The market reacted quickly, and the expectation of liquidity tightening caused investors to be anxious, and the derivatives funding rate and position were simultaneously under pressure.

II. Anatomy of the whale strategy: a trio of high leverage, event arbitrage and rule game

1. The aesthetics of leverage violence: 50 times leverage to 100 times the return  

• Mathematical logic: With a 1% margin to leverage a 50-fold position, a 2% price fluctuation can double the principal, but a 1% reverse fluctuation will result in a liquidation.

• Platform selection: HyperLiquid has become a paradise for high-risk traders with its zero gas fee, transparent order book on the entire chain and 50 times leverage.

2. Event-driven arbitrage: the resonance of politics and the market  

• Trump effect: accurately betting on the influx of liquidity caused by policy announcements, and using market FOMO sentiment to amplify fluctuations.

• Macro linkage: combining the Fed’s interest rate decision and the Bitcoin halving cycle to predict the turning point of market sentiment.

3. “Legal harvesting” of rule loopholes  

• Defects in the mechanism of liquidation: excessive withdrawals in the state of floating profit force the platform’s treasury to bear the loss of liquidation, which is essentially “risk transfer arbitrage”.

• Multi-platform collaboration: Establish a main position in HyperLiquid, and conduct hedging transactions in Binance and GMX at the same time to disperse the risk of liquidation.

III. Aftershock: HLP liquidity collapse and the "whale hunting war" in the crypto world

1. Platform hit hard: 27.7% of the capital pool evaporated and trust crisis  

• Data collapse: From March 12 to 13, the HLP capital pool dropped sharply from 486 million to 351 million US dollars, and the cumulative loss of liquidation reached 7.23 million US dollars.

• Emergency patch: On March 15, HyperLiquid increased the margin ratio from 5% to 20%, and the upper limit of ETH leverage was cut to 25 times, but the loss of liquidity is irreversible.

2. Whale Hunting Operation: Sun Yuchen and the "Avengers Alliance" of Retail Investors  

• KOL Mobilization: Crypto analyst @Cbb0fe launched the "Whale Hunting Squad", calling on the community to jointly snipe the giant whale positions, and Sun Yuchen responded and joined within half an hour.

• Strategic encirclement: By monitoring the whale addresses on the chain, reverse operations when they open positions, use the collective funds to create price fluctuations, and trigger their liquidation.

3. Regulatory Alarm: The "Achilles Heel" of Decentralized Derivatives  

• Transparency Paradox: Although the order book on the entire chain is open and transparent, whales can monitor retail positions in real time for targeted sniping.

• Regulatory Vacuum: DeFi platforms lack central counterparty risk control, and the losses from liquidation can only be shared by the treasury or the community, causing systemic risks.

Battle of hunting whales: community counterattack and difficult self-rescue of platforms

【Whale Hunting】Crypto community launches self-defense counterattack

When the accusation of "liquidity predator" swept the market, the crypto community launched a counterattack with thunder. The whale hunting team formed by KOL @Cbb0fe raised his arm and welcomed the strong joining of Sun Yuchen, the founder of TRON, within half an hour. This "civilian hunting" demonstrated the market's zero tolerance for the systematic arbitrage behavior of whales. In the community opinion field, the whale's $4 million position operation is not only a single transaction accident, but also regarded as a "stress test" for the entire DeFi ecosystem. It took advantage of the loophole that the platform allows the withdrawal of floating profits and allows high-leverage orders to be allowed, and forcibly drained 27.7% of the HLP fund pool. The naked "cash machine"-style plunder completely ignited the anger of the community.

【Rule patch】Hyperliquid's last resort

Faced with a cumulative loss of $7.23 million in liquidity within 32 hours, Hyperliquid used three defenses: on March 12, it urgently reduced the BTC/ETH leverage to 40/25 times, on March 14, it compressed the LINK leverage to 10 times, and finally on March 15, it raised the margin rate from 5% to 20%. Although this combination of punches blocked some loopholes in the rules, it was difficult to hide the structural defects of the mechanism design. When the ETH long orders were closed, the platform was forced to take over 160,000 ETH positions, resulting in a loss of 3.23 million US dollars in a single day, exposing the vulnerability of derivatives protocols under extreme market conditions. The cruel reality that the size of the fund pool has dropped from 486 million to 351 million US dollars has sounded the alarm for risk control for all DeFi protocols.

Profit and loss (only calculate the profit of closed positions)

Conclusion: The "Dark Forest Law" of the Crypto Market and the Survival Guide for Retail Investors

The legend of the huge profits of the whales is actually a cruel portrayal of high leverage, information asymmetry and loopholes in the rules. For ordinary investors, this game gives three revelations:

1. Stay away from extreme leverage: 50x leverage is the "instant switch between rich and poor", even if the winning rate is 99%, a black swan can return to zero.

2. Beware of "platform dividends": Zero gas fees and high leverage may be unverified risk control mechanisms, which become a hotbed for whales to harvest.

3. Follow smart money: Monitor whale addresses and political and economic events, but establish strict stop-profit and stop-loss disciplines to avoid becoming cannon fodder for "whale hunting operations".