Hyperliquid faces its biggest crisis: Binance OKX stabs it in the back?

Hyperliquid faces its biggest crisis: Binance OKX stabs it in the back? 

By Shikha Singh

So basically, a trader shorted $1 million worth of Jelly Jelly positions on Hyperliquid, and it seemed pretty suspicious because Jelly Jelly’s market cap was only $20 million. That same trader then went to Binance and OKX and started buying Jelly Jelly on the spot market. And then, what happened? Jelly Jelly’s price shot up by 400%!

The price of Jelly Jelly went so high that Hyperliquid simply couldn’t close the position because of low liquidity, and the value of the position increased to $10 million! Now, the trader only had to bear a $1 million loss, but Hyperliquid had to take on the rest of the loss.

This is where the story gets interesting. Hyperliquid then manually closed the position, which completely obliterates the idea of decentralization.

Now, the market has split into two groups:

The first group believes that Binance and OKX funded the trader to drain Hyperliquid’s liquidity vault. Hyperliquid, being a small project, had taken 10% of Binance’s volume, and it became a thorn in Binance’s side. We all know how aggressive Binance can be when it comes to competition. We remember how Changpeng Zhao’s one tweet contributed to the collapse of FTX.

The second group argues that Hyperliquid destroyed the concept of decentralization because they manually closed the position. This completely defeats the idea of decentralization, as there shouldn’t be any centralized authority that can interfere with transactions or positions. It raises serious questions about the true nature of decentralization.

Now, this incident raises a big question:

Hyperliquid’s manual intervention undermines the idea of decentralization… and Binance’s aggressive market tactics to eliminate competition.

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