Bybit CEO: The hyperliquid 50x leverage giant whale ETH long position liquidation event may drive innovation in CEX and DEX liquidation mechanisms

ChainCatcher news, Bybit CEO Ben Zhou posted on the X platform that the large-scale liquidation of ETH by whales with 50x leverage on Hyperliquid essentially utilized the platform's liquidation engine to exit. CEX also faces the same challenges; when whales are liquidated, the CEX liquidation engine also takes over positions. Reducing the overall leverage ratio is one method and may be the most effective one, but doing so can harm the business, as users always want to achieve higher leverage. Additionally, while deploying tools like dynamic risk limit mechanisms can be considered—such as reducing the total leverage ratio based on the total position size as the position grows—this won't fundamentally solve the problem if users utilize multiple accounts.

If DEXs wish to provide high leverage services in the long term and avoid situations similar to the 50x leverage whales utilizing the platform's liquidation engine to exit on Hyperliquid, they may need to attempt CEX-level risk management, such as market monitoring to identify abusers and market manipulators. It will be interesting to follow the developments of this matter, as it may drive innovation in liquidation mechanisms.