Hyperliquid, the leading decentralized perpetual exchange (DEX) by volume, is under scrutiny again as its token plunges after yet another vault attack , leaving the community split. The saga began as a Hyperliquid trader took a large short position on the JELLYJELLY token before withdrawing their collateral, essentially ‘self-liquidating’ and passing the risky position onto the Hyperliquidity Provider Vault (HLP). HLP acts as the counterparty for all trades on the platform. When traders caught wind of the situation, they began to bid JELLYJELLY, a small-cap token worth just $9 million before today’s events, in an attempt to engineer a short squeeze, knowing the Hyperliquid vault would be forced to buy in order to close the outstanding short position. To continue reading this as well as other DeFi and Web3 news, visit us at thedefiant.io
