According to ChainCatcher's message, Bybit CEO Ben Zhou posted on platform X that the massive liquidation of Whales with 50x leverage on Hyperliquid was essentially using the platform's liquidation engine to exit, and CEXs are also facing the same challenge. When whales are liquidated, the CEX liquidation engine will also take over the positions, and reducing the overall leverage is one method, and may be the most effective method, but doing so will damage the business, as users always want to obtain higher leverage. In addition, although tools such as dynamic risk limit mechanisms can also be considered, such as reducing the total leverage ratio according to the total position size as the position size increases, if users use multiple accounts, this problem cannot be fundamentally solved.
If DEXs want to provide high-leverage services in the long run and avoid situations like the 50x leverage Whales on Hyperliquid using the platform's liquidation engine to exit, they may need to try CEX-level risk management, such as market monitoring to detect abusers and market manipulators, and the subsequent development of this issue is very interesting, as it may drive innovation in the liquidation mechanism.
