On March 26, 2025, Hyperliquid Jelly Attack. A leading decentralized perpetual futures exchange faced a sophisticated market manipulation attack involving the $JELLY token.
A trader (wallet 0xde95) opened an $8M short position on $JELLY, deliberately triggered liquidation, and forced Hyperliquid’s liquidity pool (HLP) to absorb a $4.5M short position.
The trader then pumped $JELLY price on-chain, inflating its market cap from $10-20M to over $50M in under an hour, causing a $12M unrealized loss for HLP. Another wallet (0x20e8) capitalized on the chaos, earning $8.2M in profits from a long position.
The Fallout
- Binance and OKX listed $JELLY futures, amplifying volatility and pressure on Hyperliquid.
- HLP faced the risk of complete liquidation if $JELLY’s market cap hit $150M.
Hyperliquid’s Response
- Delisted $JELLY perpetual futures.
- Adjusted the Oracle price to $0.0095 per $JELLY, closing all positions.
- Compensated all users (except flagged wallets) via the Hyper Foundation.
- Turned a potential $12M loss into a $703K profit, with HLP depositors earning a $687K daily profit.
Hyperliquid JELLY Attack – Key Takeaways
- Vulnerabilities Exposed: The incident highlights risks in DeFi, including oracle pricing, liquidity pools, and forced liquidations.
- Governance Debate: Hyperliquid’s centralized oracle adjustment sparked controversy over decentralization.
- Lessons for DeFi: Platforms need stronger oracles, transparent governance, and real-time monitoring to prevent manipulation.
Why It Matters
Hyperliquid $JELLY Attack underscores the fragility of decentralized exchanges when dealing with low-liquidity tokens. It’s a wake-up call for DeFi platforms to bolster security and for users to approach DeFi with caution.
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