Hyperliquid will adjust leverage limits for BTC and ETH after the recent 50X ETH liquidation event

After the recent ETH liquidation event, which caused a loss of $ 4 million in the safe of the hyperliquid hyperliquidal supplier, the platform said it would increase the maximum lever effect for trading Bitcoin and Ethereum to prevent similar incidents in the future.

In the said liquidation event, a whale had built a long position with 50x on Ethereum (Ethn) which reached 160,234 ETH. However, when the market proved to be against them, actually causing a liquidation, the user was still able to withdraw USD 17.09 million parts (USDC), leaving profits before the liquidation is executed on the Hyperliquid platform.

The Vault HLP, designed to act as a safety net, absorbed the loss of $ 4 million (around 1% of the Vault of $ 451 million) of this liquidation. Vault or HLP of the hyperliquidity supplier is like a shared money pot where people deposit funds (in USDC) to make profits (or undergo losses) – proportional to their participation – resulting from hyperliquid trading activities.

Speculation triggered that the user has manipulated the HLP to his advantage by removing the equity of the Vault HLP in a manner which triggered the automatic liquidation event with the HLP taking the opposite position on the trade.

However, Hyperliquidal recently sent to the incident on xReassuring users, there was no feat or hacking. The platform said their liquidation The engine simply could not manage the size of the user’s position. The platform also said that they would increase the maximum lever effect for bitcoin (BTC) and Ethereum at 40x and 25x respectively to increase maintenance margin requirements for larger positions.