"The Median Trap - How JELLY Manipulated Mark Price to Trigger a Liquidation Domino Effect on HL" (Author: @agintender) In March 2025, the obscure Token JELLY triggered a multi-million dollar liquidation crisis on Hyperliquid. The attacker did not exploit a code vulnerability but manipulated low Liquidity Spot, polluted the Oracle Machine, and 'legitimately' triggered a massive liquidation using the mark price mechanism. Hyperliquid's HLP vault acts as both a market maker and a liquidation counterparty; after building a $4 million short positions, the attacker pumped the Spot, forcing the mark price to surge, with losses automatically transferred to HLP, while the ADL mechanism failed due to shared collateral design. Read more:

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