Large POPCAT Trades Result in $5 Million Loss for Hyperliquid Vault

Hyperliquid, the leading decentralized perpetuals exchange by open interest, was attacked this morning, saddling the platform’s HLP vault with a $5 million loss.

A user or entity built up a $20 million long position in the POPCAT memecoin. Once the position grew to roughly $30 million, the attacker allowed it to be liquidated, losing $3 million in the process and leaving HLP holding more than $25 million worth of POPCAT. The attack was similar to the JELLYJELLY exploit in March.

The ensuing selloff resulted in a $4.9 million loss for HLP, bringing its return over the past month to -1%.

HLP Monthly PnL – Hyperliquid

In response, Hyperliquid halted deposits and withdrawals to HLP to manually close the position. Shortly thereafter, the Arbitrum Bridge’s automatic lock feature was triggered, disabling deposits and withdrawals to Hyperliquid itself.

Hyperliquid developer Iliensinc addressed the issue in the Hyperliquid Discord, where they stated, “The Arbitrum bridge’s automatic locking was triggered by a conservative set of conditions, and the bridge was unlocked after the situation was thoroughly investigated within ~25 minutes. Funds are safe. The Hyperliquid blockchain itself was not impacted and experienced no downtime.”

During and after the attack, HYPE briefly fell below $38, but has rebounded to $38.8 at the time of writing.