A trader known as Stately walked away with roughly $2.2 million in profit during a liquidation cascade that wiped out $57.4 million in long positions on the SK Hynix perpetual contract on Hyperliquid. The cascade hit 960 accounts after the contract price dropped 17.9%.
How the liquidation cascade unfolded
The SK Hynix perpetual contract was launched by Trade.xyz under Hyperliquid's HIP-3 framework — not by Hyperliquid itself. According to Trade.xyz, the price drop that triggered the liquidations came from an executed trade relayed by multiple independent data providers. The firm said its oracle system worked as intended.
Still, the scale of the event was notable. More than $57 million in long positions were wiped out in a single move, and one trader — Stately — captured a seven-figure gain from the chaos.
Trade.xyz steps in to cover losses
Trade.xyz said it will cover liquidation losses attributable to the pricing anomaly. The company framed the payout as a one-time discretionary decision, not a standing policy. Eligibility rules for the compensation will be released soon, and distributions are expected within days.
Beyond the immediate payout, Trade.xyz plans to review its price formation process, including signals from its own order books. The goal is to prevent a similar situation from happening again.
Stately's position and what's next
Stately remains short SK Hynix with an open position worth $13.36 million. That bet is showing an additional $2.1 million in unrealized gains as of the latest data. It's unclear whether the trader will close the position or hold.
The next concrete step is Trade.xyz's release of eligibility rules for the compensation. Those rules will determine exactly who gets paid and how much. The company's review of its price formation process is also expected to produce changes, though no timeline has been given.
