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Hyperliquid co-founder responds to concerns about agreement security: Leveraging system and HLP liquidation mechanism have been updated

ChainCatcher message, Hyperliquid co-founder @chameleon_jeff responded on X to concerns that "the Hyperliquid protocol may suffer significant losses due to market manipulation":Hyperliquid's margin design strictly ensures the platform's solvency through mathematical mechanisms, with HLP's losses always limited to its own treasury, and the protocol's operation never relying on HLP------this feature existed prior to the JELLYJELLY incident. The newly added protective mechanisms after the incident only optimize HLP's loss resistance in backup liquidation, and the underlying architecture of the protocol has not changed. In the recent JELLYJELLY incident, an attacker attempted to manipulate HLP (liquidity provider pool) by establishing a massive long and short position on themselves. Although the unliquidated contract limit at that time allowed for the establishment of a position worth 4 million USDC, the logical flaw was that HLP used its entire fund balance as collateral for this liquidation. It should be clarified that the platform itself does not face solvency risks, but HLP did face excessive risk exposure due to market manipulation.Currently, HLP's liquidation component treasury has set a collateral limit, restricting potential losses through the backup liquidation mechanism. Hyperliquid still maintains its original operating mechanism, processing under-collateralized positions in the following order: 1) market liquidation 2) backup liquidation 3) automatic deleveraging (ADL). The current backup liquidation of HLP has added protective mechanisms by setting loss limits, making the cost of manipulating the mark price far exceed the limited gains that can be obtained from HLP.
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