Following the JELLY token incident, Hyperliquid is now criticized by a number of analysts and trade leaders with the Bitget CEO Gracy Chen vociferously stating that the DEX is on observe to grow to be FTX 2.0.
In her latest X submit, Chen slammed that the way in which Hyperliquid dealt with the JELLY incident was “immature, unethical, and unprofessional” which triggered losses on harmless customers and raised critical doubts over its integrity.
The controversy started when a dealer opened a $6 million quick place on Hyperliquid on JellyJelly (JELLY), a low-cap token with a market cap of round $20 million on the time. In a stunning transfer, the dealer then manipulated the market by pumping JELLY’s worth on-chain, intentionally liquidating his personal quick place and leaving Hyperliquid to absorb a loss of over $12 million.
The pressured squeeze precipitated JELLY’s market cap to surge from $10 million to over $50 million in below an hour, and a few analysts warned that if it reaches $150 million, Hyperliquid may have confronted a full liquidation. In response to the escalating disaster, the change abruptly delisted JELLY, additional fueling issues about its transparency and danger administration.
Whereas Hyperliquid defends its determination, stating that the delisting was essential on account of excessive market manipulation, the incident has left merchants questioning whether or not the platform can really function pretty.
“Regardless of presenting itself as an modern decentralized change with a daring imaginative and prescient, Hyperliquid operates extra like an offshore CEX with no KYC/AML, enabling illicit flows and unhealthy actors,” mentioned Chen.
Chen additionally emphasised that Hyperliquid’s product design is alarming as its “combined vaults expose customers to systemic danger” and “unrestricted place sizes open the door to manipulation.”
“Except these points are addressed, extra altcoins could also be weaponized in opposition to Hyperliquid, placing it prone to changing into the following catastrophic failure in crypto,” she mentioned.
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