Hyperliquid HLP adjusts the leverage limits for BTC and ETH after damage, emphasizing market competitiveness with data transparency.

Recently, a user on the trading platform Hyperliquid (Address 0xf3f4) was liquidated due to leverage issues with ETH long positions, which also resulted in damage to Hyperliquid's treasury funds, sparking heated discussions within the community. Hyperliquid's official response emphasized that this is not a protocol vulnerability or a hacker attack, but rather a result of the normal operation of leverage and margin mechanisms.

The user held unrealized profit and loss (PNL), but reduced the margin level after withdrawing funds, which ultimately led to a forced liquidation, resulting in a profit of about 1.8 million USD. However, the Hyperliquid Liquidity Pool (HLP) lost about 4 million USD in the past 24 hours; nevertheless, its historical total profit and loss still stands at around 60 million USD. The officials also reiterated that HLP is not a risk-free strategy, and investors should carefully assess the risks.

Hyperliquid adjusts the leverage limits for BTC and ETH, strengthening the risk control mechanisms.

To mitigate the impact of similar events, Hyperliquid announced adjustments to leverage caps and margin requirements:

The leverage limit for BTC (Bitcoin) will be adjusted to 40 times.

The leverage limit for ETH (Ethereum) will be adjusted to 25 times.

This adjustment aims to increase the maintenance margin requirements for large positions, providing a better buffer to address market impacts during large-scale liquidations.

Trading volume has surpassed 1 trillion USD, and risk management has become a key issue.

Hyperliquid has stated that it has processed over $1 trillion in trading volume to date, becoming the first decentralized exchange (DEX) to rival centralized exchanges (CEX) in scale. With the continued growth of trading volume and open contracts, the platform's margin management system is facing increasing pressure.

Yesterday's market events highlighted the need for further strengthening of risk control mechanisms. Hyperliquid has immediately begun a detailed analysis and plans to optimize the system to respond more robustly to extreme market conditions. The officials emphasized that risk management has always been a core focus of the platform; although it may not be emphasized externally every day, internal optimization is continuously ongoing.

Starting from March 15, the margin transfer rules will be adjusted to reduce systemic risk.

To further reduce the market impact of large positions, Hyperliquid will perform a network upgrade on March 15 at 00:00 UTC and adjust the minimum proportion for margin transfers:

Users must maintain at least a 20% margin ratio when transferring margin.

Margin transfer includes withdrawals, transferring from perpetual contracts to spot, and increasing or decreasing independent margin.

This change will not affect new full margin leveraged positions, but if users open independent margin positions and that operation causes the full margin leverage to exceed 5 times, the new rules will apply. This change aims to maintain healthy margin requirements and reduce the systemic impact that large positions may have on the market.

Hyperliquid: The future of decentralized trading has arrived

Hyperliquid emphasizes that its goal is to provide an efficient, transparent, and robust trading environment, continuously delivering the best trading experience to users.

"When a certain whale can make over 450 million USD BTC short positions and draw the market's attention, such a scenario can only happen on Hyperliquid." The official pointed out that nowadays when the media reports "Bitcoin market volatility," it is essentially equivalent to paying attention to Hyperliquid.

In addition, the officials also emphasized the data transparency of Hyperliquid: "Anyone can modify a PNL screenshot, but no one can question Hyperliquid's position status, just as no one can question a Bitcoin balance."

With the development of decentralized finance (DeFi), Hyperliquid aims to redefine trading models, making the market fairer and more transparent. This trading revolution has already taken place at Hyperliquid.

This article Hyperliquid HLP adjusts the leverage limits for BTC and ETH after being compromised, emphasizing the market competitiveness of data transparency, first appeared on Chain News ABMedia.