Unprecedented Attack on Hyperliquid, the Decentralized Perpetuals Exchange
In an unexpected turn of events, Hyperliquid, the top decentralized perpetual exchange based on open investments, suffered an attack resulting in a financial loss estimated at around $5 million. This incidence has undoubtedly sent shockwaves throughout the digital and blockchain community.
Tracing The Sequence of The Attack
An unidentified user or entity demonstrated exploitation of the platform in a calculated and strategic manner. They initiated a long position worth $20 million in the POPCAT memecoin, a popular if somewhat volatile cryptocurrency. This investment then skyrocketed to a whopping $30 million. What should have been a cause for celebration soon turned sour when the entity responsible allowed a liquidation of the position. This underhanded move resulted in a significant loss of $3 million. The remaining investment, valued at more than $25 million worth of POPCAT, was left in the possession of HLP, Hyperliquid’s vault.
Analysts throughout the field noted that the methodology and execution of this attack bore striking resemblance to the JELLYJELLY exploit last seen in March. The attack on Hyperliquid was meticulously planned and diligently executed, catching everyone off guard.
The Ripple Effects of the Attack
The aftermath of a large scale attack is never pretty. In Hyperliquid’s case, not only did it cause an immediate operational loss, but it also resulted in a subsequent hyper-deflation spearheaded by a hasty selloff. The combination of these factors led to a further loss of $4.9 million for HLP. Consequently, regardless of its earlier positive performance, HLP’s return over the past month now stands at -1%, a devastating decline for the platform.
The Countermeasures Taken by Hyperliquid
In response to this financial debacle, Hyperliquid moved swiftly to take immediate corrective measures. The company put a temporary halt on both deposits and withdrawals to the HLP while they manually closed the compromised position. Hyperliquid also triggered the automatic lock feature of the Arbitrum Bridges, disabling all inbound and outbound transactions to and from Hyperliquid.
A Message from Hyperliquid’s Developer
In a deliberated attempt to pacify the alarmed stakeholders, Hyperliquid’s developer, Iliensinc publicly addressed the issue. He took the initiative to communicate with the concerned public through Hyperliquid’s Discord channel. The developer reassured the community that the automatic lockdown of Arbitrum bridges that was triggered was a proactive measure based on a conservative set of conditions. Following a thorough investigation of the situation within approximately 25 minutes, they unlocked the bridge, confidently declaring, “Funds are safe.”
It was further highlighted that Hyperliquid’s blockchain was not compromised during the attack and there was no occurrence of downtime. This was a key point, significantly boosting the stakeholders’ confidence in Hyperliquid’s robust security measures and its resilience in dealing with such cybersecurity threats.
Impact on HYPE Coin Value
The attack led to a temporary fall in the value of HYPE, the Hyperliquid’s native token. It saw a drop below $38 for a brief period. However, in a remarkable display of resilience, HYPE experienced a swift recovery. At the time of writing, it made a rebound to $38.8, reflecting the investors’ continued faith in Hyperliquid.
