Hyperliquid CEO Warns Binance Data May Understate True Market Losses
The recent $19 billion liquidation event has sparked significant worries regarding data transparency across centralized exchanges globally. Jeff Yan, the CEO of Hyperliquid, cautioned that the liquidation tracking system used by Binance could greatly underestimate actual market losses during periods of high volatility.
Yan clarified that Binance’s reporting approach only reflects the latest liquidation for each trading pair every second, which restricts overall visibility. This method enhances processing efficiency while simultaneously hiding liquidation bursts, significantly obscuring the true market impact during high-volume events.
Binance May Underreport Liquidations by Up to 100× During Market Crashes
Yan highlighted that Binance handles more than 100 forced liquidations for each trading pair every second during rapid and violent market crashes. Reporting just a single liquidation every second may significantly underestimate the true totals, potentially by as much as 100x.
He mentioned that “due to the nature of liquidations occurring in bursts, this system might result in significant underreporting” during volatile circumstances. CoinGlass corroborated these observations, indicating that “the actual liquidated amount was probably significantly greater than Binance’s official figures.”
Hyperliquid Wallet Wipeout Underscores Scale of Recent Market Collapse
The value of Bitcoin fell from $114,532 to $102,000, while Ethereum saw a decline from $4,112 to $3,500, and Solana experienced a sharp drop below $140. During the same session globally, CoinGlass noted $16.7 billion in long liquidations and $2.46 billion in short liquidations.
Over 1,000 Hyperliquid wallets have been entirely erased, leading to a staggering total of more than $1.23 billion in losses for traders across 6,300 impacted accounts. The extent of the wipeout highlights why experts think that centralized liquidation data fails to capture the complete scope of market damage on a global scale.
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Binance Users Report Glitches and Delays Amid Intense Market Volatility
In the midst of the crash, users on Binance experienced issues such as unresponsive buttons, unsuccessful stop orders, and sluggish executions, all while facing significant price fluctuations across various assets. Yi He, the CEO of Binance, later acknowledged minor delays in specific modules but asserted that the core matching engine stayed completely stable.
She acknowledged that certain wealth management products temporarily lost their peg but noted that Binance promptly provided over $280 million in compensation. Binance subsequently explained that the $0 price displays were the result of decimal adjustment errors, not actual asset collapses within the platform.
DeFi Platforms Prove Stability as Centralized Exchanges Face Disruptions
As centralized exchanges experienced disruptions, decentralized finance platforms showcased remarkable strength during the market downturn, continuing to operate smoothly without interruption. The Ethena USD (USDe) stablecoin maintained its $1 peg on Curve, despite experiencing a decline to $0.70 on Binance.
Guy Young, the founder of Ethena Labs, stated that the processes for minting and redeeming “worked perfectly,” successfully managing over $2 billion in just 24 hours. This underscored the dependability of DeFi in contrast to centralized platforms, emphasizing transparency and operational continuity amid global volatility spikes.
Rapid Derivative Sell-Off Exposes Weak Liquidity and Exchange Vulnerabilities
Tom Cohen from Algoz Capital pointed to a simultaneous dumping of $60–$90 billion worth of USDe on Binance as the trigger for the collapse. This forceful selling took advantage of a brief mispricing, leading to a swift series of sell-offs throughout derivatives and thin markets.
He noted that the waves of liquidation surged through leveraged positions in mere minutes as liquidity vanished and markets quickly lost their depth. The event revealed fundamental flaws within centralized exchanges, highlighting their lack of transparency and inadequate risk management strategies when faced with collective pressure.
Hyperliquid Proves Its Strength With Zero Downtime Amid Market Outages
In the face of extensive centralized outages, Hyperliquid demonstrated remarkable resilience with zero downtime during the crash, showcasing the advantages of decentralized design under intense network pressure. “Hyperliquid experienced no latency or disruptions, even with record traffic,” the platform stated assuredly on X following the event.
This resilience confirmed Hyperliquid’s assertion that entirely on-chain trading systems provide unparalleled transparency and operational dependability during global crisis situations. With diminishing confidence in centralized exchanges, decentralized networks such as Hyperliquid are rising as viable options for professional traders across the globe.
