In March 2025, amid the intertwining of Trump's policies and the Federal Reserve's rate cut expectations, a thrilling capital hunt unfolded on the decentralized derivatives platform HyperLiquid. A mysterious trader with the code name 0xf3, relying on 50x leverage, precise event-driven strategies, and rule loopholes, managed to rake in $22 million in just half a month, and even "reaped" $2 million in profits from the platform's treasury through "cross margin liquidation". This operation not only exposed the fatal weaknesses of the DeFi protocol, but also sparked a "whale hunting" campaign initiated by KOLs like Justin Sun.
I. Timeline Recap: From $6.8 Million Windfall to "Cross Margin" Reaping in a Harrowing 72 Hours
March 2-3: Trump's Tweet Ignites a "Leveraged Lightning War"
Event-Driven: Trump announced that Bitcoin would be included in the U.S. strategic reserves, triggering a single-day surge of over 15% in BTC and ETH.
Whale Operation: Using 50x leverage, the whale went long on HyperLiquid, closing the position within 24 hours and making a profit of $6.8 million, a return on investment of 1200%.
Market Significance: This "news market" precision strike cemented the whale's reputation as an "insider trader".
March 10-12: ETH Long Frenzy and the Cross Margin Trap
Extreme Leverage: On March 10, the whale executed two ultra-short-term ETH long positions with a 100% success rate, netting $2.2 million; on March 12, the whale deposited $52.2 million USDC and established a 140,000 ETH long position (worth $270 million) with 50x leverage, accounting for 24.65% of the platform's total ETH position.
Cross Margin Reaping:
Withdrawal Loophole: When the position had an unrealized profit of $3.1 million, the whale attempted to withdraw $17 million USDC (far exceeding the $15.23 million margin), triggering a system liquidation.
Platform Buy-In: Due to the ETH price falling below the liquidation price during the liquidation, HyperLiquid's treasury (HLP) was forced to take over the position at $1,910, incurring a $4 million loss, while the whale locked in $2 million in profits.
Technical Defects: Allowing the withdrawal of unrealized profits and not limiting large leverage orders made HLP a "ATM machine".
The dramatic twist occurred between 17:05 and 17:08. According to Hyperscan data, the whale repeatedly attempted to withdraw funds while the position was still open. First, the withdrawal failed due to "exceeding the single-transaction limit", and then the whale split the withdrawal into two transactions (800 million and 900 million USDC) to withdraw $17 million, exceeding the $15.23 million USDC margin. The remaining position was quickly liquidated, and at 17:08, 140,000 ETH were taken over by HLP at $1,915. Due to the ETH price falling to $1,910 during the liquidation, HLP incurred approximately $4 million in losses, while the whale locked in $2 million in profits and exited. This "cross margin" operation shocked the community, and Hyperliquid immediately announced that it would lower the maximum leverage for BTC and ETH to 40x and 25x respectively, in an attempt to patch the loophole.
March 13-14: Cross-Platform Expansion and the LINK Turmoil
On March 13, the whale extended its reach to GMX, opening a $45.17 million ETH short position, while simultaneously going long on the ETH/BTC exchange rate on Hyperliquid, precisely capturing the opportunity when the exchange rate fell to 0.0228, making a profit of $2.15 million. On the 14th, the whale shifted to LINK, investing $14.98 million to buy 506,000 LINK (at an average cost of $13.93), and opened 10x to 23x long positions on Hyperliquid and GMX, making a profit of $1.27 million after closing the positions. However, the 20x LINK long position was liquidated at $13.6857, resulting in a loss of $1.07 million USDC. The market was abuzz with discussions, and Hyperliquid quickly lowered the LINK leverage limit from 20x to 10x, demonstrating its vigilance towards the whale.
March 15-17: The Whale's Short Targeting and the Platform's Risk Control Upgrade
On March 15, the whale deployed a 40x leverage short position on BTC on Hyperliquid, accumulating a $330 million position, with a peak unrealized profit of $6.2 million. The whale then used a TWAP algorithm to gradually take profits of $5.6 million. During the same period, the whale also increased its 44.97x BTC short position on GMX, with a total size of $194 million, generating a stage profit of $3.05 million.
Platform Dynamics: On the same day, Hyperliquid announced that it had reached the $1 trillion trading volume milestone, and simultaneously increased the BTC margin rate from 5% to 20%, directly targeting high-leverage speculators. The market reacted quickly, with tightening liquidity expectations triggering investor anxiety, and derivative funding rates and positions coming under pressure.
II. Dissecting the Whale's Strategy: The Triumvirate of High Leverage, Event Arbitrage, and Rule Exploitation
1. The Aesthetics of Leverage Brutality: 50x to Unlock 100x Returns
Mathematical Logic: Using a 1% margin to leverage 50x positions, a 2% price fluctuation can double the principal, but a 1% reverse fluctuation can result in liquidation.
Platform Selection: HyperLiquid, with its zero Gas fees, fully on-chain transparent order book, and 50x leverage, became a haven for high-risk traders.
2. Event-Driven Arbitrage: The Resonance of Politics and the Market
Trump Effect: Precisely betting on the liquidity influx triggered by policy announcements, leveraging the market's FOMO sentiment to amplify volatility.
Macro Linkage: Combining the Federal Reserve's interest rate decisions and Bitcoin halving cycle to predict market sentiment turning points.
3. "Legal Reaping" Through Rule Loopholes
Defects in Cross Margin Mechanism: Withdrawing excess funds while in an unrealized profit state, forcing the platform's treasury to bear the cross margin loss, essentially a "risk transfer arbitrage".
Multi-Platform Coordination: Establishing the main position on HyperLiquid, while simultaneously executing hedging trades on Binance and GMX to diversify liquidation risks.
III. Aftershocks: HLP Liquidity Collapse and the "Whale Hunting War" in the Crypto Realm
1. Platform Devastation: 27.7% Capital Pool Evaporation and a Crisis of Trust
Data Bloodbath: From March 12-13, the HLP capital pool plummeted from $486 million to $351 million, with cumulative cross margin losses reaching $7.23 million.
Emergency Patches: On March 15, HyperLiquid increased the margin ratio from 5% to 20% and capped the ETH leverage at 25x, but the liquidity outflow was irreversible.
2. Whale Hunting Campaign: Justin Sun and Retail Investors' "Avengers Alliance"
KOL Mobilization: Crypto analyst @Cbb0fe initiated the "Whale Hunting Squad", calling on the community to unite and target the whale's positions. Justin Sun responded and joined within half an hour.
Strategic Encirclement: Through on-chain monitoring of the whale's addresses, they executed counter-trades when the whale opened positions, leveraging collective capital strength to create price fluctuations and trigger the whale's liquidation.
3. Regulatory Alarm Bells: The "Achilles' Heel" of Decentralized Derivatives
Transparency Paradox: While the fully on-chain order book is publicly transparent, the whale can monitor retail positions in real-time and target them selectively.
Regulatory Vacuum: DeFi platforms lack a central counterparty risk control mechanism, and cross margin losses can only be absorbed by the treasury or the community, triggering systemic risks.
The Battle to Hunt the Whale: Community Counteraction and the Platform's Arduous Self-Rescue
【Whale Hunting Action】Crypto Community Launches Self-Defense Counterattack
As the accusations of "liquidity predators" swept the market, the crypto community launched a counterattack with thunderous force. The whale hunting squad organized by KOL@Cbb0fe was quickly joined by Justin Sun, the founder of TRON, in just half an hour, demonstrating the market's zero tolerance for the systematic arbitrage behavior of whales. In the community discourse, the 4 million USD cross margin operation of the whale is not just a single trading accident, but is seen as a "stress test" on the entire DeFi ecosystem - utilizing the platform's loopholes that allow the withdrawal of unrealized profits and the reckless high-leverage orders, they forcibly drained 27.7% of the HLP liquidity pool, a blatant "ATM-style" predation that has completely ignited the community's outrage.
【Rule Patch】Hyperliquid's Belated Remedies
Facing a cumulative loss of 7.23 million USD in liquidity within 32 hours, Hyperliquid deployed a three-pronged defense: on March 12th, they urgently lowered the BTC/ETH leverage to 40/25x, on March 14th they compressed the LINK leverage to 10x, and finally on March 15th they raised the margin rate from 5% to 20%. Although this combination of measures has plugged some of the rule loopholes, it is difficult to conceal the structural defects in the mechanism design - the platform was forced to take over a 160,000 ETH position when the ETH long positions were forcibly liquidated, resulting in a single-day loss of 3.23 million USD, exposing the fragility of the derivatives protocol in extreme market conditions. The cruel reality of the liquidity pool size plummeting from 486 million to 351 million USD has already sounded the risk control alarm for all DeFi protocols.
Profit and Loss Statement (Realized Profits Only)
Epilogue: The "Dark Forest Law" of the Crypto Market and the Survival Guide for Retail Investors
The legendary profitability of whales is actually a cruel portrayal of high leverage, information asymmetry, and rule loopholes. For ordinary investors, this battle offers three key insights:
Avoid Extreme Leverage: 50x leverage is a "switch between millionaire and pauper", even with a 99% win rate, a single black swan event can wipe you out.
Beware of "Platform Dividends": Zero Gas fees and high leverage may be backed by unverified risk control mechanisms, becoming a breeding ground for whale harvesting.
Follow the Smart Money: Monitor whale addresses and political-economic events, but establish strict profit-taking and stop-loss disciplines to avoid becoming "cannon fodder" in the "Whale Hunting Action".
