On October 19th, Hyperliquid founder Jeff responded to rumors that Hyperliquid prioritized protocol revenue over trader revenue: On October 10th, Hyperliquid's automatic deleveraging (ADL) mechanism netted hundreds of millions of dollars for users by closing profitable short positions at favorable prices. Had more positions been forced to liquidate, HLP (Hyperliquid Protocol) could have earned hundreds of millions more through profit and loss (PNL), but this would have exposed HLP to irresponsible and high risk. ADL shifted HLP's potential PNL to users while reducing HLP's risk exposure, creating a win-win situation.
As a reminder, Hyperliquid's ADL queue has always used a formula similar to that of most centralized exchanges (CEXs), taking into account leverage used and unrealized profit and loss. Finally, we appreciate your feedback on ADL; a simpler mechanism is more robust and easier for users to understand. Nevertheless, Hyperliquiquit is investigating whether significant improvements can be introduced to justify the increased complexity.
