Trader Sacrifices $3M to Trigger $5M Loss on Hyperliquid Vault
An anonymous actor reportedly sacrificed about $3 million to engineer liquidations on Hyperliquid, causing roughly $5 million in losses in a targeted vault. The attacker accumulated $26 million of POPCAT positions and deployed a deceptive $20 million buy wall to distort market depth and trigger cascade liquidations, according to on-chain traces and community reports. The incident hit HYPE-related positions and exposed how concentrated positions and spoofing can be used to weaponize liquidation mechanics. The episode underscores persistent systemic risks in DeFi: weak market depth, predictable liquidation logic, and manipulable on-chain order signals. For users and liquidity providers this raises immediate concerns about counterparty exposure and the protocol’s risk controls; for Hyperliquid it may prompt patching of oracle and liquidation parameters, possible compensation talks, and heightened scrutiny from auditors and regulators. Market participants will be watching for protocol responses and any coordinated remediation to prevent similar attacks.