Key Takeaways
- Hyperliquid’s CEO has accused exchanges of massively underreporting liquidation data.
- Critics argue that Hyperliquid’s current setup isn’t sufficiently decentralized or open source.
- Hyperliquid (HYPE) is up 14% at $41.94 in the past 24 hours, though trading down 24.5% in the past 30 days.
Following a market downturn that exposed major vulnerabilities across crypto platforms, especially centralized exchanges (CEXs), the boss of rising star decentralized finance (DeFi) platform Hyperliquid has called for better industry standards.
Hyperliquid on Transparency
In a post to X, Hyperliquid CEO Jeff Yan took Binance to task over what he views as concerning, inadequate liquidation reporting standards, and the need for less opaque trading data.
He alleges that such practices create a false picture of the market, noting that when thousands of liquidations occur in a second, just one is reported.
“This could easily be 100x underreporting under some conditions,” he adds.
Highlighting how Hyperliquid’s platform allows anyone to verify the chain’s execution, verify its solvency, he argues that “transparency and neutrality” is what makes “fully on-chain DeFi” the ideal infrastructure to handle global finance.
The news follows a string of difficult events for Hyperliquid and the broader crypto market.
Last week’s crypto wipeout wreaked havoc on portfolios following a historical liquidation event, coupled with a costly $21 million hack on a user’s wallet within the Hyperliquid ecosystem.
Counterpoints
Bojan Angjelkoski, engineering director at finance-focused blockchain firm, Injective Labs, countered Yan’s claims, arguing that Hyperliquid’s validators are attesting, not validating:
“They just blindly sign whatever you ask them to. The code is closed source.”
He adds that Hyperliquid’s validators should be globally distributed and decentralized, and not run on a single Kubernetes (K8s) cluster, where K8s is an open-source platform for managing containerized apps across a set of nodes.
In short, this implies that the current system carries inherent centralization risks.
Furthermore, Bojan says he won’t go into the case of Hyperliquid’s code not being open source, which prevents anyone from understanding how its “‘liquidation engine” works.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
