Bitget CEO slams hyperliquid’s handling of “weak -suspected” incident involving jelly token
Gracy Chen, CEO of the Cryptocurrency Exchange Bitget, criticized Hyperliquid’s handling of an incident on March 26 in its ongoing exchange, saying it puts the network dangerous to be “FTX 2.0.”
On March 26th, Hyperliquid, a blockchain network that specializes in trading, said it DELISTED PERPETUAL FUTURS CONTRACTS For jelly token and reward users after identifying “evidence of weak -suspected market activity” tied to instruments.
The decision, reached by the consensus on the relatively small number of hyperliquid validators, which has erupted existing concerns about the noted centralization of the popular network.
“Despite manifesting itself as an innovative decentralized exchange with a bold vision, Hyperliquid runs more like a offshore (centralized exchange),” Chen said, after saying “Hyperliquid may be on track to be FTX 2.0.”
FTX is a cryptocurrency exchange managed by Sam Bankman-Fried, who was convicted of US fraud after the sudden collapse of the FTX in 2022.
Chen has not accused hyperliquid of specific legal offenses, instead emphasizing what he considered “unprofessional, and unprofessional response to the event.
“The decision to close the $ jelly market and the power of regulating positions at an interesting price sets a dangerous preceding,” Chen said. “Trust – not capital – is the foundation of any exchange (…) and once lost, it is almost impossible to recover.”
Source: Gracy Chen
Related: Hyperliquid removes Jelly Perps, citing ‘weak -suspected’ activity
Jelly incident
The Jelly Token was launched in January by Venmo co-founder Iqram Magdon-Stistail as part of a Web3 social media project called Jellyjelly.
It first reached a market capitalization of approximately $ 250 million before falling into a single digit million -million in the next few weeks, According to to Dexscreener.
On March 26, the Jelly Market Cap reached nearly $ 25 million after Binance, the most popular crypto exchange worldwide, launched Its own eternal futures tied to the token.
On the same day, a Hyperliquid businessman “opened a massive $ 6M short position in Jellyjelly” and then “deliberately self-liquid by pumping Jellyjelly On-chain,” Abhi, founder of Web3 Company AP Collective, Says In an x post.
Bitmex founder Arthur Hayes said the preliminary reactions to the Hyperliquid’s Jelly incident have dived the potential risks to the network reputation.
“We have stopped pretending that hyperliquid is decentralized. And then stop pretending to be a trader (care),” Hayes Says In an x post. “You bet $ hype is back where (it) started with a short term -following Degen Degen.”
Binance launched Jelly Perps on March 26. Source: Binance
Growing pain
On March 12, Hyperliquid interacted with a similar crisis caused by a whale that deliberateEth) position.
Trade cost depositors in Hyperliquid’s Liquidity Pool, HLP, approximately $ 4 million in losses after forceing the pool that does not prevent trade at the unwanted prices. Since then, hyperliquid has been increased collateral requirements For open positions to “reduce the systematic impact of large positions with an impact on the hypothetical closure market.”
Hyperliquid operates the most popular leveraged Perpetuals trading platform, controlling nearly 70% of the market sharing, according to a January Vaneck January report.
Eternal futures, or “perps,” are -in -linen contracts with futures with no expiration date. Entrepreneurs have deposited margin collateral, such as the USDC, to secure open positions.
According to In L2Beat, hyperliquid has two main validator sets, each consisting of four validators. By comparison, rival chains such as Solana and Ethereum are supported by approximately 1,000 and 1 million validators, respectively.
More validators generally reduces the risk of a small group of insider manipulating a blockchain.
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