Notice Regarding Pre-Market Trading for Hyperliquid (HYPE): Full Compensation Plan

In response to user inquiries and feedback about pre-market trading for the Hyperliquid (HYPE) project, Gate highly values user opinions and experiences. We promptly conducted a thorough investigation and formulated relevant resolutions and optimization measures. Gate will allocate a $5 million USDT compensation fund to support affected users. Below is a detailed explanation:

1. Investigation Findings

(1) Risk Warnings

The platform has fulfilled its obligation to provide risk warnings regarding pre-market trading, as follows:
- Clear Rules: Gate published announcements detailing the points-based rules for pre-market trading projects, including the HYPE exchange ratio (HYPE: HYPE POINTS = 1:100) and settlement risks. (Refer to Announcement 1 and Announcement 2.）
- Risk Reminders: Before entering pre-market trading, users were informed of settlement-related risks, explicitly stating that actual tokens and penalty fees would be distributed based on snapshot balances during settlement.
- Information Guidance: The trading page displayed labels and descriptions for points-based projects, guiding users to understand the points system and pre-market trading rules.

(2) Pre-Market Trading Rules

The pre-market trading rules implemented by Gate align with industry standards, and all trading and settlement processes were conducted strictly in accordance with these established guidelines.

2. Resolution Plan

Due to significant price surges in HYPE, some minting users chose not to settle actual HYPE tokens to minimize losses. This resulted in buyers receiving only a small amount of tokens and penalty fees during settlement. Some buyers experienced capital losses due to insufficient understanding of the settlement rules.
Although these losses were caused by market volatility, and the platform strictly adhered to transparent and public rules without profiting beyond standard transaction fees, Gate understands the concerns of affected users and prioritizes user experience. As such, we have decided to establish a $5 million USDT compensation fund to fully compensate eligible users who incurred losses. Eligible users who submit a ticket will receive 100% compensation.

Details of the Compensation Plan:

(1) Eligible Users:

Users holding HYPE token balances at the time of settlement whose HYPE balance originated from market purchases rather than minting. Specifically, users whose snapshot balance - minting quantity > 0.

(2) Compensation Calculation:

Compensation Amount = USDT received during settlement + HYPE received during settlement (converted to USDT) + trading profits - (snapshot balance - minting quantity) × average buy-in price
(Note: Users who minted and sold tokens but chose not to settle due to price increases are considered to have made individual trading decisions. Their forfeited deposits will not be compensated.)

(3) Application Process:

Users can submit their applications via this. The compensation will be distributed in sequence, and once the $5 million USDT cap is reached, additional compensation will be provided in the form of point cards.

(4) Deadline:

Applications must be submitted by 12:00 PM (UTC+8) on January 5, 2025. Late submissions will not be accepted.

3. Risk Warning Optimization Plan

To further enhance the user experience, Gate will implement the following optimizations:

(1) Enhanced Risk Warnings:

Introduce a "Pre-Market Trading Q&A" section, allowing users to complete quizzes to fully understand related risks.

(2) Improved Information Display:

Add a prominent entry for minting information on the pre-market spot trading page, providing detailed data on total minting volume, total pledged amounts, and estimated settlement results.

(3) Loss Risk Alerts:

- Mark settlement loss risk price ranges on K-line charts to provide reference points for user decision-making.
- Implement clear loss risk warnings when users place orders at prices with potential settlement risks.

Gate remains committed to protecting user rights, maintaining fairness in trading, and continuously optimizing our products and services. Thank you for your understanding and support!

Gate Team
December 28, 2024