How Hyperliquid Dodged a $576M Crash in October

During the intense crypto market crash on October 10, 2025, the decentralized trading platform Hyperliquid faced a massive test. A new research paper reveals that the venue processed roughly $641 million in forced sales during the worst minute of the drop. Instead of dumping all of that volume onto the public order books, the platform redirected a massive portion away from public sight.

Out of that total, about $576 million went straight to the Hyperliquid backstop. Only $64 million hit the actual public order book. This design choice stopped a vicious cycle where thinning order books push prices lower, which triggers even more forced liquidations across leveraged accounts.

The study highlights that the backstop absorbed over sixty percent of the forced sales off the book shortly after the chaos began. The research team modeled the cascade using a branching ratio to see if the liquidations would spiral out of control. The metric stayed safely below critical levels, proving that the internal backstop successfully damped the selling pressure before it could break the system.