The DeFi (decentralized finance) derivatives platform Hyperliquid has suffered a coordinated blow. The attack resulted in nearly $5 million in losses from its Hyperliquidity Provider (HLP) vault. What is extraordinary about the event is that the attacker deliberately sacrificed $3 million of their own funds to execute the manipulation.
The motive does not appear to have been profit, but rather structural disruption or a malicious “stress test. “As reported by blockchain analytics firm Lookonchain, the assault was meticulous. The attacker withdrew 3 million USDC from OKX, distributed it across 19 new wallets, and deposited it into Hyperliquid. With these funds, they opened $26 million in leveraged long positions on the POPCAT perpetual contract (denominado HYPE).
The final phase of the manipulation involved creating a fake $20 million buy wall near the $0.21 mark. This created an illusion of demand, luring in other traders before the wall was abruptly pulled.
When the support vanished, the price collapsed, liquidity evaporated, and a cascade of automatic liquidations was triggered. Hyperliquid’s HLP vault absorbed the $4.9 million deficit. The attacker’s own $3 million was liquidated.
The community reacted with astonishment, calling it “peak degen warfare” and “the costliest research ever.” Following the event, Hyperliquid temporarily paused withdrawals using its “vote emergency lock” function to prevent further manipulation.
Market Irony: Hyperliquid Strategies Seeks $1B
Ironically, news of the attack was overshadowed by a separate announcement. Hyperliquid Strategies, a new entity formed by a SPAC merger (a vehicle from the traditional economy) between two companies, filed plans to raise $1B with the SEC. The goal is to acquire more HYPE tokens, with former Barclays chief Bob Diamond set to be chairman. This news pushed the HYPE price up 8%, despite the attack’s volatility.
