Single Trade Causes $57 Million Liquidation on Hyperliquid

A flash crash on the Hyperliquid exchange wiped out 960 accounts late Monday night. The token representing the semiconductor company SK Hynix, known as SKHYNIX, dropped roughly 20 percent in seconds. It fell from $1,131 to $900 before rapidly recovering. The event occurred because the exchange oracle pulled a temporary, low price from an external stock exchange.

The chaos began when a single, likely accidental, sell order for the stock was placed on the South Korean Nextrade exchange during a thin pre market window. Because there were no other orders at that moment, the trade set the price 30 percent below market value. The Hyperliquid oracle captured this temporary dip and triggered liquidations for leveraged traders almost instantly.

Data shows that 960 accounts suffered a total of $57 million in liquidations during the incident. While $17.3 million in losses were realized by long positions, auto deleveraging also affected profitable short positions. The exchange has noted that the token is operated by an external partner, XYZ, which is currently looking into the matter.

This incident highlights the dangers of relying on external price feeds in volatile pre market conditions. Traders should watch for potential compensation updates from the project team or changes to how oracle data is filtered on decentralized exchanges to prevent similar automated failures in the future.