Hyperliquid: Updated leverage system and HLP liquidation mechanism and set loss limit

Planet News: Hyperliquid co-founder @chameleon_jeff posted on X platform, expressing sadness about the coordinated misinformation campaign targeting Hyperliquid, and thus will provide a detailed, factual explanation of how Hyperliquid works: Hyperliquid's margin design strictly ensures platform solvency through mathematical mechanisms, with HLP losses always limited to its own treasury, and the protocol never depending on HLP—a feature that existed before the JELLYJELLY event. The newly added protection mechanism after the event only optimizes HLP's loss resistance in backup liquidation, without changing the protocol's underlying architecture. In the recent JELLYJELLY event, an attacker attempted to manipulate HLP (liquidity provider pool) by establishing massive long and short positions. Although the unclosed contract upper limit allowed establishing a position worth 4 million USDC at the time, the logical flaw was that HLP used its entire fund balance to provide collateral for this liquidation. It needs to be clarified that the platform itself does not have solvency risks, but HLP did face excessive risk exposure due to market manipulation. Currently, HLP's liquidation component vault has set a collateral cap, limiting potential losses through the backup liquidation mechanism. Hyperliquid maintains its original operating mechanism, handling under-collateralized positions in the following order: 1) Market liquidation 2) Backup liquidation 3) Automatic deleveraging (ADL). The current HLP backup liquidation has added a protection mechanism by setting a loss limit, making the cost of manipulating mark prices far higher than the limited gains attackers could obtain from HLP.