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Perpetual swap DEX Hyperliquid suffered a whale attack and was on the brink of losing $15 million. It promptly responded in a way that generated a fair amount of controversy.

The founder and CEO of Ambient Finance Doug Colkitt joined the show to explain:

• How perp swaps work
• How a whale used the low-liquidity memecoin $JELLY to attack Hyperliquid’s vault
• How Hyperliquid’s response broke DeFi taboos around decentralization, oracles, etc.
• Criticisms of and justifications for the team’s decisions
• What can be done to prevent similar attacks in the future

Thank you to our sponsors!

• BitKey: Use code UNCHAINED for 20% off
• FalconX
• Mantle

Guest

• Doug Colkitt, Founder and CEO of Ambient Finance

Links

•  Accounts of the $JELLY whale attack on Hyperliquid and its response
  • X: The story
  • X: Nuking the vault
  • X: How Hyperliquid responded

• Arguments for and against Hyperliquid’s solution:
  • ZachXBT: ZachXBT calls out alleged hypocrisy
  • Jordi Alexander: Shorting on a perp is not robust
  • Jose Maria Macedo: How do they override the oracle price?
  • Doug: Closing positions at an arbitrary price
  • Gracy Chen: Casting doubts on integrity
  • Steven.hl: In defense of HL
  • Kam: Of course quorum was reached easily

• What precedent Hyperliquid’s actions set
  • Kevin Zhou: Binance and OKX set a precedent