Join us on monday for our upcoming spaces of All Things Hyperliquid
Discussing Hyperliquid, HyperEVM, Hybra and updates with friends
Hosted by: @iamgroot71715, @Hope_ology & @AlliedToasters
Joining us: @HypurrFi & @delpho_labs
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Here's my best attempt to explain what happened on $REKT today in simple terms (tldr - @IMFCrypto didn't "liquidate" anyone, it's just a decentralised platform that matches borrowers and lenders).
IMF is build on top of @MorphoLabs, where anyone can lend money directly. In simple terms, IMF created the ability for people to borrow USDS against their $REKT (and other memecoin) holdings.
IMF also had an "accelerate" function, which allowed you to deposit $REKT as collateral, borrow USDS against it, and then use that to buy more $REKT (essentially a form of leverage).
As with all levered positions, there are levels at which you can get liquidated on and once those levels started hitting today it triggered a liquidity cascade all the way down to approximately a 70% price decline.
You could see the $REKT collateral that was held in this Morpho contract: 0xBBBBBbbBBb9cC5e90e3b3Af64bdAF62C37EEFFCb, which at the beinning of the day owned almost 5% of the token supply. It is now down to 0.25% which means the leverage has almost entirely been wiped.
Both IMF and Morpho are decentralised - none of these guys "caused" any liquidations or acted in bad faith. Unfortunately as a result of price action a liquidity cascade was triggered.
Obviously feels like a kick in the face for me as I have been working so hard on $REKT through this bad price action, but if you are familiar with our story you will know that bouncing back from the dead is a challenge I relish - we have delivered A LOT this year and we still have A LOT more to come.
I'm sure there'll be a bit of gravedancing, and I welcome it, it excites me - the way I see it is we got clean positioning now and this day will be part of the lore - anyone who knows me will know I'm gonna be at this even harder to prove a point.
Cheers
Congrats to Native Markets on pioneering the first aligned stablecoin on Hyperliquid! Looking forward to seeing a novel and compliant stablecoin grow with the protocol, bringing value to the entire ecosystem and onboarding the next wave of non-crypto users.
HYPE in the Assistance Fund system address of 0xfefefefefefefefefefefefefefefefefefefefe has been formally recognized as burned.
The governance vote was based on stake-weighted consensus, with 85% of stake voting for burning, 7% against, and 8% abstaining.