The DEX got caught in another storm of market manipulation, this time centered around JELLY, the memecoin du jour. A whale played the system, opening a massive short, then yanking his own collateral while simultaneously pumping JELLY’s price elsewhere. The result? Hyperliquid’s HLP vault was left holding the bag - $12M in unrealized losses as JELLY rocketed 350% in minutes.

Sensing an opportunity, traders swarmed in, piling into longs until open interest caps were maxed out. The chaos escalated when Binance and OKX joined the party, listing JELLY perps and fanning the flames of an already brutal short squeeze. Hyperliquid’s validators had seen enough. Trading halted. JELLY delisted. Affected users offered compensation.

Despite the fiasco, the team claims the HLP still walked away with a $700K profit for the day. But that didn’t stop HYPE, Hyperliquid’s native token, from nosediving nearly 20% before clawing its way back to $14.40. A brutal game, but one thing’s clear - no one walks away unscathed.