The competition between the two largest decentralized derivatives exchanges has escalated into open conflict. A trading address, presumably funded through the Aster platform, tried to artificially crash the liquidity of its direct competitor Hyperliquid. Aster is publicly backed by Binance founder Changpeng Zhao (CZ). That is why the standoff has come into the spotlight.

The organizers used an old manipulation scheme. This time, however, the system worked differently, so the attacker lost four times more than the victim. Here is how it happened.

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The chronicle of a failed manipulation

The attempt to crash the trading platform on June 16 was recorded by analysts from the Markets Alpha channel. According to blockchain analysis, the address belonged to a group of wallets that had withdrawn $2.3 million from Aster a few days earlier. About 20 hours before the incident, this wallet transferred $635,000 to Hyperliquid. Immediately afterwards, the trader began aggressively opening a long position on the Fartcoin token.

As a result, the plan failed completely, and the identity of the wallets' owner remains undisclosed for now.

The scenario that did not work

The analyst il.hl described in detail the classic attack scheme, which consists of five sequential steps:

• Accumulating about 20% of the open interest in a low-liquidity asset.
• Artificially pumping the price through purchases on the spot market.
• Triggering a protective liquidation of short positions.
• Forcibly transferring these positions into the HLP liquidity pool.
• A massive dump of tokens, leaving the pool with enormous losses.

Attackers had already used a similar sequence of actions earlier during high-profile incidents on Hyperliquid.

Source: BeInCrypto