Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnSquareMore
DeFi’s Structural Vulnerabilities Revealed by $60 Million XPL Turmoil

DeFi’s Structural Vulnerabilities Revealed by $60 Million XPL Turmoil

Bitget-RWA2025/09/25 15:26
By:Coin World

- Hyperliquid's whale wallet 0xb9c earned $614K in unrealized XPL profits after a 200% price surge orchestrated by four manipulators, generating $47.5M combined gains. - The manipulation exploited isolated oracles and no position limits, triggering $60M+ losses and exposing Hyperliquid's lack of circuit breakers or external price references. - Post-incident safeguards like 10x mark price caps and external data integration created arbitrage opportunities, highlighting systemic risks in DeFi's growth-over-se

DeFi’s Structural Vulnerabilities Revealed by $60 Million XPL Turmoil image 0

The whale wallet 0xb9c currently holds the largest XPL long position on Hyperliquid, amassing an unrealized gain of $614,000 as of August 27, 2025. This follows a coordinated price manipulation event that caused the token’s value to soar by 200% to $1.80 in a matter of minutes. Four major whale wallets orchestrated this rapid price increase, collectively earning $47.5 million, with 0xb9c alone pocketing over $15 million as the main orchestrator. By exploiting Hyperliquid’s isolated oracle mechanism and absence of position caps, the manipulators triggered a wave of forced liquidations, resulting in losses exceeding $60 million for other participants.

XPL, the native asset of the Plasma blockchain, experienced this price manipulation through leveraged trades that wiped out the order book and forced shorts to close. Hyperliquid users, including one who suffered a $4.59 million loss, criticized the platform for lacking essential protections like circuit breakers and external price feeds, which are common on centralized exchanges. In response, Hyperliquid implemented a 10x ceiling on mark prices based on an 8-hour moving average and began using external market data to prevent similar incidents. However, these changes led to arbitrage opportunities, as XPL’s price began to diverge between platforms such as Binance and Hyperliquid.

This episode highlights the inherent risks in DeFi platforms that prioritize rapid expansion over robust risk controls. By listing tokens with limited liquidity like XPL, Hyperliquid exposed itself to market manipulation by large holders. Experts pointed out that, unlike centralized exchanges that use open interest limits and external price oracles to stabilize trading, Hyperliquid lacked governance structures to counteract manipulation. The situation has reignited discussions about the necessity of position limits, transparent oracle systems, and regulatory frameworks within DeFi markets.

The XPL incident is not unique; similar cases, such as the $13.5 million JELLY token exploit in March 2025, demonstrate recurring vulnerabilities in leveraged DeFi markets. Both traders and analysts stress the importance of recognizing the distinct risks present in pre-launch perpetual futures, where low liquidity and fast trade execution can intensify price swings. Although Hyperliquid’s 2023 debut established it as a prominent on-chain futures platform, recent developments underscore the ongoing struggle to balance innovation with security in decentralized finance.

Following the manipulation, XPL’s price has dropped back to $0.51, reflecting a correction after the surge. Nevertheless, this event has brought renewed focus to the need for industry-wide reforms, such as enhanced risk management systems and standardized measures to deter manipulation. As DeFi continues to grow, maintaining equilibrium between scalability and security will remain a central concern for developers, regulators, and market participants.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Earn new token airdrops
Lock your assets and earn 10%+ APR
Lock now!

You may also like

Bitcoin Updates: Bitcoin Faces 23.6 Fib Level—Could Past Trends Spark an Altcoin Recovery?

- Bitcoin dominance fell to 59% at the 23.6 Fibonacci level, signaling potential altcoin rotation amid ETF outflows and price declines. - Corporate Bitcoin accumulation grows, with Hyperscale Data holding $70.5M in Bitcoin (77% of market cap) and Bitfarms holding $156M in Bitcoin. - Analysts highlight macroeconomic pressures and regulatory uncertainty as constraints on altcoin growth despite technical indicators suggesting capital rotation. - Market focus remains on Bitcoin stabilization above $80,000 and

Bitget-RWA2025/11/28 18:48
Bitcoin Updates: Bitcoin Faces 23.6 Fib Level—Could Past Trends Spark an Altcoin Recovery?

Interoperability Fuels DeFi’s Evolution as Hemi and LI.Fi Connect Blockchains

- Hemi and LI.Fi expanded crosschain interoperability by integrating LI.Fi's bridge and swap API, enabling seamless token transfers across EVM and non-EVM networks like Solana . - Users can now transfer assets like USDC between chains in single transactions using routing tools, reducing friction for DeFi participants and developers. - The partnership standardizes crosschain workflows, eliminating fragmented bridge solutions while supporting liquidity aggregation across EVM, Solana, and alt-VMs. - By stream

Bitget-RWA2025/11/28 18:48
Interoperability Fuels DeFi’s Evolution as Hemi and LI.Fi Connect Blockchains

Vitalik Buterin's Latest Support for ZK Technology and What It Means for the Cryptocurrency Industry

- Vitalik Buterin is driving a blockchain shift via ZK tech, enhancing Ethereum's scalability and privacy. - ZK infrastructure's $28B TVL surge highlights projects like zkSync Era and StarkNet boosting DeFi and gaming. - Investors target EVM-compatible ZK rollups and privacy toolkits, aligning with Ethereum's ZK roadmap.

Bitget-RWA2025/11/28 18:44
Vitalik Buterin's Latest Support for ZK Technology and What It Means for the Cryptocurrency Industry

XRP News Today: IMF Cautions That Tokenized Markets Could Face Collapse Without International Cooperation

- IMF warns tokenized markets risk destabilizing flash crashes due to rapid growth and interconnected smart contracts. - XRP highlighted as potential cross-border payment solution but not endorsed, alongside Stellar and Bitcoin-Lightning hybrid models. - Global regulators intensify oversight of tokenized assets, with ESMA, SEC, and central banks addressing governance and liquidity risks. - IMF stresses urgent need for coordinated policy frameworks to prevent fragmentation and systemic vulnerabilities in ev

Bitget-RWA2025/11/28 18:28
XRP News Today: IMF Cautions That Tokenized Markets Could Face Collapse Without International Cooperation