Hyperliquid Exploited, by Kevin Smith

Last week, DeFi saw another major exploit — this time targeting Hyperliquid, one of the largest decentralized perpetual futures platform.

Last week saw another major exploit in the DeFi space, this time targeting Hyperliquid, one of the largest decentralized perpetual futures platforms. The attack follows a familiar pattern, previously seen in incidents like Mango Markets: exploit thin liquidity on spot and perp markets to manipulate the price of a low-liquidity token—in this case, Jelly-My-Jelly.

What happened? On March 26, an attacker targeted Hyperliquid’s Liquidity Provider (HLP) vault by opening large positions in Jelly-My-Jelly’s perpetual futures market: one short at ~$4 million and two longs at ~$3 million.

Jelly-My-Jelly, a Solana-native token with a modest $15M market cap, was listed on both centralized (CEXs) and decentralized (DEXs) exchanges. Its daily liquidity averaged just $72K—less than half of similar low-cap tokens like Slerf ($190K) and over 1,000 times lower than Solana’s native token, SOL.

For this Hyperliquid attack, the trader undertook two coordinated actions while simultaneously opening short and long positions on the asset’s perpetual markets:

Within an hour, Jelly-My-Jelly’s price surged over 500%, advancing from $0.00806 to $0.0517.

This price manipulation exposed flaws in Hyperliquid’s liquidation engine. As open interest passed key thresholds, new positions were blocked, hindering liquidators from effectively closing the liquidation of the attacker’s short position. The delay amplified losses, further deepening the predicament for the HLP vault.

Adding to the complexities, Binance and OKX listed Jelly-My-Jelly perps on the same day, following a surge in activity on Bybit, where Jelly-My-Jelly reached its highest-ever daily volume at $150M.

Additionally, the Jellyjelly activity last week saw liquidations on either side of the market as prices gapped and whipped. Short liquidations were more prevalent early in the day, while longs were largely liquidated in the afternoon session. The biggest single liquidation on March 26 was a short position that got liquidated for around $250k.

These operations highlight the meticulous planning that went into the attack. On-chain data indicates that the attacker was already performing test transactions on Hyperliquid as early as 10 days prior to the March 26 incident.

Trump Media group works with Crypto.com on ETFs.

The Trump media group announced its intention to launch a range of crypto-related exchange-traded funds last week. It plans to launch funds investing in projects with a “Made in America” theme. This will include crypto assets such as BTC and CRO, the former’s price spiked following the announcement.

CRO is an exchange token for the Crypto.com platform. While exchange tokens had taken a hit after the FTX collapse, regulation in the U.S. has benefited these projects. However, these assets still suffer from low volume and liquidity.

After the election in November saw a surge in volume in CRO markets, and again last week with the Trump media group announcement, it remains very low compared to other assets vying for ETF status.

The 2% market depth of CRO is only around $10mn on Kaiko Indices vetted exchanges. These are exchanges with USD-quoted pairs, eligible for ETF benchmark use. While this is very low and only a fraction of the liquidity available in BTC and ETH markets it does come closer to some other ETFs applying for approval at present, such as ADA and APT.

Volume and liquidity conditions had been crucial in the decision-making process of the previous administration, with low liquidity seen as a deterrent to approval. But with new leadership at the SEC issuers are getting more ambitious with applications.

Stablecoin CVD on US markets flips positive.

Last week saw heightened market volatility as both crypto and stocks rallied on Monday with tariff concerns easing, only to pull back on Friday with hotter-than-expected U.S. inflation data and renewed stagflation fears.

Despite the Friday downturn, USDT-USD Cumulative Volume Delta (CVD) flipped positive over the past 15 days, signaling a potential shift in market sentiment.

Historically, traders in developed markets accumulate stablecoins during bullish phases and liquidate them in downturns. In recent months, both USDT-USD and USDT-EUR CVDs remained in the negative territory, reflecting a cautious outlook.

In stark contrast, we observed robust USDT accumulation in emerging markets like Turkey, Colombia, and Mexico, fueled by FX volatility.