° Linklete °

I'm lost too, but I'm still fighting

[° Linklete ° @Linklete]

@KowalskiDoes happy christmas little k 🐧

and very good thread btw 🫰🏽

[° Linklete ° @Linklete]

@spwfeijen PRO

[° Linklete ° @Linklete]

@KowalskiDoes goat 🫵🏽

[° Linklete ° @Linklete]

will it be possible? 🤠

[° Linklete ° @Linklete]

@DragonCrip congrats dragon! 🐉

[° Linklete ° @Linklete]

@KowalskiDoes still fighting bro 🐧

[° Linklete ° @Linklete]

polynaked 🌀

[° Linklete ° @Linklete]

hyperliquid

[Hyperliquid @HyperliquidX]

On Hyperliquid, there is no listing fee, no listing department, and no gatekeepers.

Spot deployment on Hyperliquid is permissionless. Anyone can deploy a spot asset by paying a gas fee in HYPE. Deployers can choose to receive up to 50% of trading fees on their spot pairs. Everything is transparent and verifiable onchain.

The full defi lifecycle includes building a project, launching a token, and trading that token. Every step of that journey can be done permissionlessly on Hyperliquid.

[° Linklete ° @Linklete]

damn, it was true ☝🏼

[° Linklete ° @Linklete]

$tao looks incredible...

[° Linklete ° @Linklete]

$tao looks incredible...

[° Linklete ° @Linklete]

this guy 🐐

[jeff.hl @chameleon_jeff]

TLDR: During recent volatility, Hyperliquid had 100% uptime with zero bad debt. This was Hyperliquid’s first cross-margin ADL in more than 2 years of operation. ADL does not change the outcome for any liquidated users. While some specific ADL providing trades were unfavorable, the aggregate effect of ADL was that traders realized significant pnl by closing positions at favorable prices that were only briefly available.

--

It’s sad to see some people attack Hyperliquid to deflect from their own platforms’ issues. Solvency and uptime are the two most important properties of a financial system. These are table stakes for any trading system, and gaslighting to convince users otherwise is unethical and irresponsible.

Below is more analysis on how Hyperliquid’s margining system handled the extreme volatility.

Background on liquidations

For a perps system to be solvent, every position must be backed by a minimum amount of collateral. This is called the “maintenance margin.” When positions do not meet the maintenance margin requirement, they are taken over by the system to be liquidated. Earlier today, many altcoins dropped by more than 50% in a short period of time. When this happens, long positions at 2x or higher leverage must be liquidated, or else the system accrues bad debt.

There were billions of dollars worth of positions liquidated on Hyperliquid in a matter of minutes. In a permissionless system, each user chooses their own position sizing and collateralization. Any system that does not liquidate the necessary users is irresponsibly gambling with other users’ funds. On Hyperliquid, every order, trade, and liquidation is transparently verifiable onchain. Many other venues significantly under-report liquidation data. This cannot be compared apples-to-apples against the fully onchain picture of Hyperliquid.

Background on HLP

HLP is a protocol vault with permissionless deposits that 1) provides order book liquidity and 2) performs backstop liquidations. The first role is negligible, with HLP trading less than 1% market share. The focus of this post is liquidations.

Liquidations are first attempted against the order book, and any user can provide liquidity to these market liquidations. Backstop liquidations occur when the order book does not have enough liquidity to absorb an undercollateralized position. In this case, HLP takes over the position along with its collateral. For improved risk management, HLP is split into several child vaults, and each liquidation is only sent to one child vault.

Background on ADL

Auto-deleveraging (ADL) is the liquidation mechanism of last resort, when market and backstop liquidations do not work. See Doug’s thread (link in reply) for a thorough explanation on the details of ADL.

Every ADL event has two sides: the “triggered” side is undercollateralized, while the “providing” side is decided as a function of profitability and leverage used.

Similar to backstop liquidations, even though providers to ADL are profitable on average, there are no guarantees for any specific event. Some ADL providing trades were unfavorable, such as when only some components of long/short portfolio were closed. The system is designed to minimize ADLs because they are unpredictable even if ADL providing trades are profitable on average. Because HLP is a non-toxic backstop liquidator, ADL is a rare settlement of last resort. As far as I know, this was the first cross-margin ADL event on Hyperliquid mainnet (ADL is more common for isolated-only assets such as hyperps, which are not backstop liquidated by HLP).

Summary of events

Over the course of 20 minutes, HLP backstop liquidated billions of dollars worth of positions.

HLP's philosophy has always been to provide liquidity of last resort. Contrary to misconceptions, HLP is a non-toxic liquidator that does not pick profitable liquidations. Instead HLP is a public good for maintaining system solvency. In particular, Hyperliquid has no liquidation fees. HLP’s design, including its multi-component child vault system, is the product of countless simulations, and allows HLP to maximally serve the benefit of the protocol while managing its own risk.

In fact, the liquidator child vaults of HLP themselves became undercollateralized in the course of backstop liquidating as many user positions as possible. This is by design, where child vaults are isolated from the other components of the overall strategy. HLP is treated no differently from other users when participating in ADL. In aggregate, HLP's child vaults were the largest addresses on the triggered side of ADL by more than an order of magnitude. The addresses on the providing side of ADL against HLP’s child vaults realized hundreds of millions of dollars in additional profit relative to the prices shortly before and after the dislocation.

On other venues, the liquidation engine is not transparent and therefore may not be subject to the same strict margin requirements as for normal users. On these venues, the exchange could have backstop liquidated more positions, bearing increased solvency risk to extract hundreds of millions in business revenue. This is not an acceptable tradeoff for Hyperliquid.

Finally, I know that this is a difficult time for many traders, and I hope the community can continue to support each other and grow together. As a contributor to Hyperliquid, I’ll continue to work my hardest to build the best possible platform that can house all of finance. Times like this highlight the importance of transparency and fairness in the financial system.

[° Linklete ° @Linklete]

@CryptoEnfermos @megadice @megadice scammers 🤡

[° Linklete ° @Linklete]

@alexesca10 I'm sure that coming from you, it will be pure quality

looking forward to seeing it, spider

hugs! 🫂

[° Linklete ° @Linklete]

@kowalski3109 keep fighting k, but remember, sometimes we need a reset to see things more clearly

take a break if you need to

[° Linklete ° @Linklete]

"gm", warriors

yesterday was quite a spectacle. I was “lucky”; I only lost one position, which wasn't very big. so, considering how bad it was, it wasn't serious, far from it

in terms of capital percentage, it was hardly significant; it was just a bad trade

if you were hit harder, im really sorry. this battle is very tough, and you never know when you're going to be attacked. what happened cannot be changed, but we can learn from it

with the whole perp dex arc, I hope it didn't catch too many people with leverage, because I don't want to imagine what that must have been like. I know of a few cases and it hurts me a lot

don't play with leverage. it's very tempting to see “how much I can win,” but you have to think more about "how much I can lose" . I've seen accounts with large sums go to zero...

we keep fighting, and if you don't have the energy after yesterday, take your time. if you need to talk, my DMs are open to anyone who wants to talk

don't give up, warrior, improve your skills

[° Linklete ° @Linklete]

the problem with this is that many people focus on “look how much I can earn,” and these are people who have been in the market for years, but it seems they never learn

I don't care if you're a bull or a bear, but whatever you are, risk management is essential, otherwise your account will eventually go to zero

I know I can relax with you, you have many skills, and every day I see you improving more

Hugs, little k 🐧

[° Linklete ° @Linklete]

holy fk

[Lookonchain @lookonchain]

Brutal! 😱

Four traders were completely liquidated on #Hyperliquid during the market crash — each losing over $10M!

• 0x1a67 lost $18.73M, account wiped out
• 0x1d52 lost $16.43M, only $140 left
• 0x0a07 lost $15.69M, only $104 left
• 0xb2ca lost $13.72M, account wiped out

https://t.co/CvUv63HRQk
https://t.co/Lvw2Y9k2LH
https://t.co/V30NukAeix
https://t.co/DSxYPYKmNM

[° Linklete ° @Linklete]

@kowalski3109 u know bro.... 🐧👑

[° Linklete ° @Linklete]

just because im not around doesnt mean im not still working

right now, to no ones surprise, im farming based (to continue with the HL echo) and pacifica (delta neutral)

I faded aster like a champion

and, obviously, im still taking my trades, bc its impossible to stop

keep fighting, brother

[° Linklete ° @Linklete]

@kowalski3109 ty bro! 🙏🏾🥹

[° Linklete ° @Linklete]

Im back, only for say "hyperliquid", cya