Quote Markets team member filo published a post reviewing the XPL flash crash on Hyperliquid, outlining how a cluster of linked wallets reduced margin before the selloff and how that fed into losses for the platform’s liquidation vault. According to the review, 16 wallets with funding or trading links withdrew about $2.0386 million in margin before the sharp drop, leaving HLP to absorb a large XPL long position. HLP eventually took over roughly 160 million XPL and sold the position over about 75 minutes, booking a loss of around $555,787, equal to 55.6% of the liquidation vault’s own funds. The review said 14 of the 16 wallets showed links in funding sources or trading behavior, while 12 wallets that withdrew early accounted for 90.7% of the position later taken over by HLP. At the same time, the investigation said it found no direct evidence that those wallets caused the XPL plunge, and it could not determine whether they hedged on other venues. It also said the 16 wallets did not profit from the incident on Hyperliquid, instead posting combined losses of about $711,000.
ChainCatcher reported that filo, a member of the liquidity provider Quote Markets, published a review of the XPL flash crash on Hyperliquid.
During the selloff, 16 wallets with linked funding flows and trading behavior withdrew about $2.0386 million in margin before the price collapse. The move left the HLP liquidation vault to take over a large XPL long position.
According to the review, HLP ultimately absorbed about 160 million XPL and then sold the tokens over roughly 75 minutes. The liquidation resulted in a loss of about $555,787, equal to 55.6% of the vault’s own funds.
The investigation said 14 of the 16 wallets showed links through funding sources or trading patterns. Among them, 12 wallets withdrew funds in advance and accounted for 90.7% of the position later transferred to HLP.
The review added that investigators did not find direct evidence showing those wallets caused the XPL price collapse. It also said there was no way to confirm whether the wallets hedged positions on other trading platforms.
On Hyperliquid itself, the 16 wallets did not profit from the incident. Their combined loss was about $711,000.
The post also said XPL had already fallen about 6% before the first liquidation on Hyperliquid, indicating that liquidation was not the starting point of the crash. In the initial phase, aggressive sell volume in Binance perpetual contracts was also noticeably larger.
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