Hyperliquid faces $340M USDC outflows amid JELLY controversy

Hyperliquid experienced more than $ 340 million in USDC outings following a controversy surrounding the jelly, a token that jumped 429% before being delivered.

According to data Since the Blockchain Parsec analysis company, the latest outings have occurred in the hours following Jelly’s liquidation event, echoing similar outings of $ 300 million seen during a previous bitcoin (BTC) whale liquidation event. Consequently, that of hyperliquids (THRESHING)) USDC reserves have gone from a top of $ 2.58 billion to $ 2.02 billion in the last 30 days.

Jelly controversial started when the hyperliquidal treasure has assumed a short position of $ 5 million in the jelly. While the price of the token increased unexpectedly, the unrealized loss increased to $ 10.63 million. If Jelly had reached $ 0.17, the hyperliquidal treasure suffered a potential loss of $ 240 million.

The price peak seems to have been manipulated. An address identified as 0xDe95 opened a short position of 430 million massive frosts on Hyperliquidx, only to eliminate its margin shortly after.

This action led to a series of liquidations, the losses being absorbed by the hyperliquidal treasury. Another portfolio, 0x20e8, opened a long position in jelly at the same time, which has increased the price even more.

To stop additional damage, the Validator of Hyperliquid Committee has decided to set up jelly and have established it at $ 0.0095. The platform assured users that short positions have been set at their initial entry price and that the hyper foundation would fully compensate for affected users.

However, the way the incident was treated has aroused criticism. The CEO of Bitget, Garcy Chen, called the actions of hyperliquid “immature, contrary to ethics and not professional”, making comparisons with FTX. According to Chen, the platform works less as a decentralized platform and more as an unregulated offshore exchange.

Meanwhile, the hyperliquid native token, hype, is down 10% in the last 24 hours, according to Crypto.News price tracker. The volume of negotiation jumped 443%, reaching $ 466 million, showing an increase in market activity. The media threshing remains 58 %% below its summit of $ 34.96, but is still up its lowest price.

The total value locked in its hyperliquidity supplier Vault, a protocol safe that makes market manufacturing and liquidations, also decreased, going from a peak of $ 540 million on February 10 to 195 million dollars on March 27, according to DEFILLAMA data.