Recently, a user (address 0xf3f4) on the trading platform Hyperliquid was liquidated due to the leverage issue in their ETH long position, which also caused damage to the Hyperliquid treasury, sparking discussions in the community. Hyperliquid's official response emphasized that this was not due to a protocol vulnerability or a hacker attack, but the result of the normal operation of the leverage and margin mechanism.

The user held unrealized profits and losses (PNL), but after withdrawing, they reduced their margin level, leading to their eventual forced liquidation, although they still made a profit of around $1.8 million. However, the Hyperliquid liquidity pool (HLP) lost about $4 million in the past 24 hours. Nevertheless, its historical total profit and loss still maintains around $60 million. The official also reiterated that the HLP is not a risk-free strategy, and investors should carefully assess the risks.

Hyperliquid Adjusts BTC, ETH Leverage Limits, Strengthens Risk Control Mechanism

To reduce the impact of similar events, Hyperliquid announced adjustments to the leverage limits and margin requirements:

• The BTC (Bitcoin) leverage limit will be adjusted to 40x
• The ETH (Ethereum) leverage limit will be adjusted to 25x

This adjustment aims to increase the maintenance margin requirements for large positions, providing a better buffer to address the market impact of large-scale liquidations.

Trading Volume Surpasses 1 Trillion USD, Risk Management Becomes a Key Issue

Hyperliquid stated that it has processed over 1 trillion USD in trading volume, becoming the first decentralized exchange (DEX) to rival the scale of centralized exchanges (CEXs). With the continuous growth in trading volume and open interest contracts, the platform's margin management system is facing more severe pressure.

The market event yesterday highlighted the need to further strengthen the risk control mechanism. Hyperliquid has immediately initiated a detailed analysis and plans to optimize the system to better withstand extreme market conditions. The official emphasized that risk management has always been a core focus of the platform, although it may not be emphasized externally every day, but is continuously optimized internally.

Adjusting Margin Transfer Rules from March 15 to Reduce Systemic Risks

To further reduce the market impact of large positions, Hyperliquid will conduct a network upgrade on March 15, 00:00 UTC, and adjust the minimum ratio for margin transfers:

• Users transferring margin must maintain at least a 20% margin ratio
• Margin transfers include withdrawals, transfers from perpetual contracts to spot, and increases or decreases in isolated margin

This change will not affect new cross margin leverage positions, but if users open isolated margin positions and the operation causes the cross margin leverage to exceed 5x, the new rules will apply. This change aims to maintain a healthy margin requirement and reduce the potential systemic impact of large positions on the market.

Hyperliquid: The Future of Decentralized Trading Has Arrived

Hyperliquid emphasizes that its goal is to provide a high-performance, transparent, and robust trading environment, continuously delivering the best trading experience for users.

"When a whale can make a BTC short position of over $450 million and draw market attention, such a scenario can only happen on Hyperliquid," the official said, pointing out that when the media reports "Bitcoin market turbulence," it is essentially focusing on Hyperliquid.

Furthermore, the official also highlighted Hyperliquid's data transparency: "Anyone can modify a PNL screenshot, but no one can question Hyperliquid's position status, just as no one can question the Bitcoin balance."

With the development of decentralized finance (DeFi), Hyperliquid hopes to redefine the trading model, making the market fairer and more transparent. This trading revolution is already happening on Hyperliquid.