JELLY and Hyperliquid: the HLP vault under pressure

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Why the market is crashing again — and what’s really going on with $JELLY and Hyperliquid
...explained simply ❗

As of March 26, 2025, Hyperliquid — one of the top decentralized platforms for trading perpetual futures — is facing a serious situation tied to a Solana-based meme coin called $JELLY (JELLYJELLY). Here's what happened, step by step:

1. A trader self-liquidated a massive $5 million short position on $JELLY and passed that risk onto the HLP vault (a community-backed pool designed to absorb losses from failed trades).

2. Immediately after, the same trader reportedly opened a huge spot long position on $JELLY — pushing the price up over 500% (or at least 200% according to some reports).

3. This short squeeze put the HLP vault at huge risk. If $JELLY had continued to rise toward ~$0.15–$0.17, the vault could’ve lost up to $230 million.
At last check, it’s already sitting on $9–$10.6 million in unrealized losses.

4. In response, Hyperliquid’s validators acted fast:

They delisted $JELLY perpetuals due to "suspicious market activity"

Settled all positions at $0.0095 to contain damage

Promised automatic reimbursements for all users not involved in the flagged activity, paid out by the Hyper Foundation

5. Meanwhile, Binance and other CEXs jumped in, listing $JELLY perps — a move many are calling suspicious.

There’s unconfirmed speculation that wallets funded by #Binance may have helped push $JELLY’s price, potentially to hurt Hyperliquid. ❗
This has sparked a larger debate: centralized vs. decentralized exchanges.

6. The ripple effects are big:

$HYPE, Hyperliquid’s native token, is down 53% from its ATH ($34.96 in Dec 2024)

Some are calling this a targeted attack, similar to what took down FTX

Others see it as a stress test for DeFi platforms under pressure

For now, Hyperliquid has acted fast and transparently. But the $JELLY situation exposed just how fragile DeFi can be when leverage, manipulation, and CEX competition collide.

The market’s spooked — and for good reason.

There’s unconfirmed speculation that wallets funded by #Binance may have helped push $JELLY’s price, potentially to hurt #Hyperliquid. ❗
This has sparked a larger debate: centralized vs. decentralized exchanges.

More additional informations:

Posts on X, like @amologoko
’s (17:34 CET), state that a "$JELLY manipulator transferred significant capital to Hyperliquid from Binance wallets on Arbitrum, adding plausibility to CZ foul play speculations."
Another from @BigTrout300
(17:15 CET) outlines a sequence: Binance-funded wallets opened positions, manipulated margins, and triggered losses for the HLP vault, followed by #Binance and OKX announcing $JELLY listings.

Link/Proof: These are anecdotal X posts, not hard evidence. On-chain data would be needed to confirm (e.g., via explorers like Arbiscan), but specific wallet addresses aren’t publicly detailed here beyond ZachXBT’s allusions.

Implication: This paints a picture of a deliberate attack, though it’s unproven without Binance’s official stance or full wallet tracing. We are investigating.