Hyperliquid Under the Shockwave: Challenges and Reflections in the Perptual Futures Track

On March 26, the well-known decentralized trading platform Hyperliquid faced the most severe security crisis since its establishment. This is the fourth major security incident for the project since November last year, and its impact is far greater in scope and depth than before. Looking back at the entire attack process, the technique was identical to the previous incident of 50x long ETH, but this attack was more precise and fierce.

The core of the event lies in using the low liquidity token JELLY as a breakthrough. The attacker deposited 3.5 million USDC as margin, opening a short position of 4.08 million dollars in JELLY, while simultaneously selling in the spot market, causing the token price to plummet. Subsequently, the attacker quickly withdrew most of the margin, triggering the platform's automatic liquidation mechanism. The platform's insurance fund HLP was forced to take over this massive short position. The attacker then reversed the operation, buying large amounts of JELLY, causing the price to soar, putting HLP at risk of significant losses.

In a critical situation, the actions of some centralized exchanges have raised questions in the market. They quickly launched JELLY Perptual Futures after the incident, which was believed to potentially further drive up the token price and exacerbate HLP's losses. In the face of adversity, the Hyperliquid Validator Committee ultimately chose to delist the JELLY Perptual Futures to minimize losses.

As a leader in the on-chain Perptual Futures space, Hyperliquid's trading volume accounts for 9% of a major trading platform's global contract trading volume, far exceeding other decentralized trading platforms. However, this project, established after the collapse of FTX, seems to be plagued by misfortune and frequently faces security threats.

From an architectural perspective, Hyperliquid adopts a Layer1-integrated design, combining EVM and a matching engine. Its core, HyperCore, is responsible for the core business logic of the exchange and shares the same consensus layer with HyperEVM. Although this design is innovative, it also presents potential risks, such as inconsistent transaction states and synchronization delays.

The HLP vault is the core of the Hyperliquid ecosystem, employing a "on-chain order book + strategy pool" dual-track system to provide users with yields and liquidity for Perptual Futures trading. However, this design appears vulnerable in the face of high-leverage attacks, making it susceptible to price manipulation.

The development path of decentralized trading platforms for Perptual Futures is still full of challenges. Hyperliquid has made significant achievements in simulating centralized exchanges on-chain, but how to balance decentralization with efficiency, and how to address the potential risks brought by on-chain transparency, remain pressing issues to be resolved.

In the future, decentralized Perptual Futures platforms may need to innovate in governance mechanisms and risk control measures to cope with the increasingly complex market environment. At the same time, how to meet user needs while maintaining sufficient security and degree of decentralization will be a direction for the entire industry to explore together.