A trader realized a $2.2 million gain during this week’s SK Hynix liquidation incident on Hyperliquid.

Trade.xyz, the team that operates the market, will now cover losses tied to the same event. It maintains that the oracle systems performed as specified.

Trader Banks $2.2 Million While 960 Accounts Get Liquidated

According to Arkham, the trader, Stately, realized approximately $2.2 million in profit after part of his short position in SK Hynix was automatically reduced during an auto-deleveraging (ADL) event during a liquidation cascade. 

The trader remains short SK Hynix with an open position worth $13.36 million, which now shows an additional $2.1 million in unrealized gains.

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The liquidation stems from a sharp decline in the SK Hynix perpetual contract, which fell 17.9%. BeInCrypto reported that the move triggered the liquidation of approximately $57.4 million in long positions across 960 accounts.

It is worth noting that the SK Hynix perpetual contract was launched by Trade.xyz under Hyperliquid’s HIP-3 framework, rather than by Hyperliquid itself. In a post on X, Trade.xyz addressed the incident and outlined the steps it plans to take in response.

The team said the SKHYNIX mark price fell from $1,127.90 to $917.25 at 23:01 UTC on July 27. According to the platform, the price was derived from an executed trade that was relayed by multiple independent data providers.

“The XYZ oracle was live in external pricing and tracking that venue, which serves as the primary Korean pre-market venue. The oracle system worked as intended according to its specification,”

To address the liquidation incident, the platform said it would cover liquidation losses attributable to the pricing anomaly. Eligibility rules will follow, and it expects distributions within days.

Trade.xyz framed the payout as a one-time discretionary decision rather than a precedent. It also plans to revisit how it forms prices, including signals from its own order books.

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Source: BeInCrypto