HYPE token price has dropped over 16% in hours after the Jellyjelly fiasco

The price of Hyperliquid's HYPE token has dropped over 16% in hours after the Jellyjelly fiasco brought skepticism to the platform and its credibility.

The price of Hyperliquid's HYPE token has dropped over 16% in hours as skepticism over the platform and its credibility rises following the Jellyjelly fiasco. The incident has also seen crypto traders loosen their trust in Hyperliquid as they are withdrawing assets and moving out of the DEX.

Hyperliquid has faced a huge wave of criticism from the crypto community after it delisted jellyjelly (JELLY) token from the platform after a trader allegedly tried to liquidate the DEX's HLP vault in a well-planned trading trick.

Following this facade, the reputation and credibility of Hyperliquid has been put on risk with it severely impacting the platform's native HYPE token price. As per Coinmarketcap data, HYPE price is currently trading at $13.53 - down 16% in the past 24 hours.

HYPE price is currently down 61% from its all-time high of $35.02, it marked on December 21, 2024. The token gained significant traction in its initial days of launch with it surging over 900% in the span of just one month.

The Hyperliquid & Jellyjelly Controversy

The abrupt delisting of the jellyjelly (JELLY) token has sparked debates in the crypto community, with many traders questioning the fairness and transparency of Hyperliquid's decision. Some people argue that the trader's strategy was within the scope of decentralized finance (DeFi) trading, while others believe that the platform was justified in taking action to protect its liquidity providers.

As earlier reported by The CryptoTimes, Hyperliquid has taken a loss of over $12 billion in this incident and it has been facing massive backlash from the crypto community.

This controversy has now drawn attention to the risks associated with trading on decentralized exchanges (DEXs). Citing this incident, many critics are pointing out that while DeFi platforms promote autonomy and self-custody, cases like this highlight the potential for sudden, unilateral decisions by protocol operators.

As a result, traders are now reassessing the reliability of Hyperliquid with many shifting towards alternative DEXs that offer greater transparency in handling such disputes.