XPL Shockingly Sees $17 Million Liquidation Wave Before Listing! Hyperliquid Introduces Two New Safeguards to Respond

On the eve of the official listing of the XPL Token, the decentralized derivation platform Hyperliquid experienced a dramatic market fluctuation— the price of the XPL Perptual Futures surged by 2.5 times, triggering a liquidation wave of over 17 million USD. The event shocked the market and prompted Hyperliquid to swiftly introduce two protocol-level new protective measures to drop the possibility of similar risks occurring again.

Event Review: Whales Sweep the Order Book, Bears Suffer "Squeeze"

According to CoinGlass data, the event was triggered by one or more whales sweeping the entire order book of the Hyperliquid XPL/USD Perptual Futures, forcing the platform to switch from the standard liquidation mode to the Automatic Deleveraging (ADL) mechanism in just a few minutes.

Clearing scale: Over $17 million in positions wiped out

Main victim: short sellers

Profit side: Four addresses collectively made a profit of over 46 million USD.

Extreme price fluctuations: XPL/USD on Hyperliquid surged to $1.80, while the similar contract on Binance only reached $0.55.

Platform Response: The system is operating normally, and the risks are characteristic of the market

Hyperliquid clarified on its official Telegram that the system and liquidation logic are operating as designed, with no technical faults:

Clearing process: first execute through the order book, if bad debts cannot be avoided, then initiate ADL.

Risk Isolation: Hyperps adopts isolated margin, where the profit and loss of XPL positions do not affect other assets.

Market characteristics: High volatility and low liquidity before listing, belonging to a high-risk environment.

The team emphasizes that Hyperliquid is a permissionless protocol, does not interfere with market prices, and does not assume liability for compensation, while reminding users to fully understand the mechanisms and risks before trading.

New Safeguards: Dual Approach to Strengthen Risk Control

In response to this incident and user feedback, Hyperliquid announced the introduction of two new measures in the next network upgrade:

1. Marked Price Hard Cap

Limit the Hyperp marked price to 10 times the 8-hour EMA (Exponential Moving Average)

Purpose: To provide clear risk boundaries for over-collateralized short positions, reducing liquidation impact in extreme market conditions.

2. Introducing external market data

The marking price formula will incorporate external perpetual futures market data of the same asset (such as the Binance XPL market).

Objective: Enhance the robustness of price signals in low liquidity markets and drop manipulation risks.

Hyperliquid supplement, these changes will not retroactively affect past liquidations or ADL, but will provide a safer trading environment for future volatility periods.

Conclusion

The clearing turmoil before the listing of XPL highlights the high risks and volatility characteristics of the decentralized derivation market. Although Hyperliquid insisted on the principle of "rules above all" during the incident, it quickly introduced new protective measures, demonstrating its pragmatic attitude in maintaining market fairness and user confidence. For traders, this is also an important reminder: in the pre-listing market with low liquidity and high leverage, risk management and position control are more critical than ever.