Hyperliquid responds to XPL surge: the platform has not experienced any technical issues or incurred any bad debts, and advises users to be aware of risks

ChainCatcher message, August 27, Hyperliquid officially announced in the Discord channel that today the XPL market experienced significant volatility, with the marked price increasing by approximately 2.5 times within a few minutes. During this period, the Hyperliquid blockchain operated normally as designed, with no technical issues: first, liquidation was executed based on the order book, followed by the initiation of the automatic deleveraging (ADL) mechanism according to the public protocol.

Hyperp adopts a fully isolated margin system, where all users' profits and losses are isolated from other asset positions. This liquidation and ADL only affected XPL positions, and the protocol did not incur any bad debts. The pre-listing market itself is inherently unpredictable. The robust marked price formula used by Hyperp effectively prevented instantaneous surges, requiring the order book price to remain at a high level for several minutes before triggering liquidation.

Hyperliquid is a permissionless multi-market protocol, with each market having unique risk characteristics. Users are strongly advised to understand the operational mechanisms of markets like hyperp by reading the documentation and to implement appropriate risk management before trading. All hyperp products include risk warnings, reminding users to be aware of low liquidity, high volatility, and increased liquidation risks.

Finally, some users expressed a desire to short using high collateral positions. After the next network upgrade, the hyperp marked price will be restricted to within 10 times the 8-hour marked price EMA. Although this condition has never come close to being triggered, this move provides a mathematical boundary for the liquidation price of over-collateralized short positions.

The 8-hour EMA has been published as the oracle price for hyperp on-chain and in the API. It should be noted that this upgrade will not change any liquidation or ADL results from today, but is intended to encourage liquidity provision during periods of volatility. Different suggestions put forward by users come with their own risk vectors, and the best solution is to introduce more liquidity into these markets to mitigate the impact of volatility.