Decentralized exchange Hyperliquid delisted perpetual futures for the Solana-based meme coin JELLYJELLY on Wednesday, describing the move as critical to ensuring its network’s integrity amid a looming liquidation crisis.
Hyperliquid uses its own high-speed blockchain, built upon the Ethereum layer-2 network Arbitrum, and the project said its networks’ validators had convened to take “decisive action,” in a post on X (formerly Twitter).
The decision came after a Hyperliquid user opened a $6 million 20x leveraged short on JELLYJELLY that became toxic as the meme coin’s price rose. On X, spectators speculated that the user may have intentionally tried to liquidate themselves, forcing the decentralized exchange to take over the bad bet as it spiraled out of control.
After evidence of suspicious market activity, the validator set convened and voted to delist JELLY perps.
All users apart from flagged addresses will be made whole from the Hyper Foundation. This will be done automatically in the coming days based on onchain data. There is no…
— Hyperliquid (@HyperliquidX) March 26, 2025
On Thursday, JELLYJELLY’s price surged as high as $0.043, according to the crypto data provider CoinGecko. Around 2:30pm Eastern Time, it was changing hands around $0.023, showing a 73% jump in value over the past day.
Though Hyperliquid said the decision to delist JELLYJELLY was a collective choice, the move sparked criticism as some traders and industry observers argued that it conflicted with decentralized finance, or DeFi, norms.
“Let’s stop pretending Hyperliquid is decentralized,” Arthur Hayes, co-founder and former CEO of the crypto exchange BitMEX, said on X.
Users that had JELLYJELLY positions on the platform would be “made whole from the Hyperliquid Foundation” at a later date, Hyperliquid said in the post. The Hyperliquid Foundation is a distinct entity that’s responsible for governing the project’s overall direction.
As the decentralized exchange began unwinding the toxic JELLYJELLY bet, a community-owned vault dubbed the Hyperliquidity Provider (HLP) temporarily took a hit.
