Perpetual swap DEX Hyperliquid suffered a whale attack and was on the brink of losing $15 million. It promptly responded in a way that generated a fair amount of controversy.
The founder and CEO of Ambient Finance Doug Colkitt joined the show to explain:
How perp swaps work
How a whale used the low-liquidity memecoin $JELLY to attack Hyperliquid’s vault
How Hyperliquid’s response broke DeFi taboos around decentralization, oracles, etc.
Criticisms of and justifications for the team’s decisions
What can be done to prevent similar attacks in the future
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Guest
Doug Colkitt, Founder and CEO of Ambient Finance
Links
Accounts of the $JELLY whale attack on Hyperliquid and its response
X: The story
X: Nuking the vault
X: How Hyperliquid responded
Arguments for and against Hyperliquid’s solution:
ZachXBT: ZachXBT calls out alleged hypocrisy
Jordi Alexander: Shorting on a perp is not robust
Jose Maria Macedo: How do they override the oracle price?
Doug: Closing positions at an arbitrary price
Gracy Chen: Casting doubts on integrity
Steven.hl: In defense of HL
Kam: Of course quorum was reached easily
What precedent Hyperliquid’s actions set
Kevin Zhou: Binance and OKX set a precedent
Timestamps:
👋 0:00 Intro
🤔 02:59 What is Hyperliquid?
🐳 05:16 How a whale used $JELLY to attack
⛔ 09:19 How Hyperliquid responded
📈 11:59 Why did Binance and OKX suddenly list the memecoin?
🤔 16:32 How did Hyperliquid ‘change the rules’ to protect themselves?
⚖️ 19:25 ‘Losses for thee, but not for me’: Hyperliquid’s hypocrisy?
💡 24:39 Doug’s ‘cleaner’ solution
👀 28:35 Will this have positive or negative knock-on effects?
🧹 31:20 Tidying up illiquid markets
📰 32:46 Crypto News Recap
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