Whale with nearly 100 million in unrealized gains: Why did I leave HyperLiquid?

Original Title: A Difficult Personal Decision

Original author: @TheWhiteWhaleV2

Compiled by: Peggy, BlockBeats

Editorial Note: After the 10·10 incident, the crypto industry underwent a painful yet necessary self-reflection. When the failure of a centralized trading platform is enough to trigger a network-wide liquidation cascade, how much pressure can the “decentralization” we rely on truly withstand?

The author of this article is a well-known trader with over 70,000 followers on platform X, who has been deeply involved in crypto trading for a long time, aiming to achieve a trading performance of 100 million dollars. In August of this year, he publicly recorded a total profit of 95 million dollars on HyperLiquid, stating that if the performance of other platforms is included, the total has “surpassed 100 million.” As of October, his career profit and loss remains positive, and he has “maintained an eight-digit profit this year.”

However, on October 10th, he encountered his first liquidation in the global clearing waterfall, with a single loss of about 62 million USD and a drawdown of about 62%. Nevertheless, he emphasized that he “is still in positive returns” and continued to rebuild his position by selling HYPE tokens and other methods.

He once publicly praised HyperLiquid founder Jeff as a “crypto Nobel laureate,” but today chose to leave HyperLiquid. In his view, this is not disappointment, but a shift in values. He calls for the industry to move from “protecting protocols” to “protecting users,” from celebrating zero bad debts to a true risk buffering mechanism. After all, a mature financial system would never rely solely on “good luck” and “hope” as the last safety net.

The following is the original text:

The protocol is not dead, but the users are “dead”.

I made a personal decision: to no longer trade on HyperLiquid.

I want to particularly emphasize the two words “personal”—and it is a very difficult decision. I am not asking anyone to follow me, but simply choosing to continue acting according to the changes in my values.

Many people have witnessed the evolution of my thoughts along this journey. As humans, we should evolve, reflect, let go of old frameworks, and build better new ones.

And I know that everyone often says not to become emotionally attached to a protocol. But HyperLiquid is indeed different for me. Jeff has created something that the market desperately needs. He has brought the issue of “structural fairness” into the spotlight, opening up better discussions for the entire industry. He and the HL team deserve to leave their mark in the history of crypto. I sincerely hope they continue to write it.

But if you've been paying attention to me long enough, you also know that I'm an idealist, perhaps even overly idealistic. I can't shut off that part of my brain: I can see things as they are right now, yet I always hold on to the way they “should” be.

On October 10, many newcomers saw the truth of the industry. For those who have been around long enough, it serves as a reminder: this ecosystem is still fragile and still easily manipulated.

Can a centralized exchange trigger a global clearing waterfall that briefly breaks the prices of all protocols? This is not a “black swan,” it's a design flaw.

A brief review of the process that day:

Binance used its own oracle - resulting in the stablecoin becoming unpegged. This triggered a scale of liquidation that was small but still manageable. The real chaos began when their API went “mysteriously offline.” Market makers who were delta-neutral suddenly found themselves unable to hedge in major OTC markets. Without the ability to hedge, they could only withdraw quotes from CEX and DEX. Liquidity vanished, and prices plummeted instantly.

And what about the entire industry? There is a wave of celebration. “Zero bad debts!”, “Perfect execution of liquidation!”

Very good, the protocol is not dead, but the users are.

The protection agreement is important, and this is obvious. But “protection agreement” does not equal “protecting traders.” If we want broader adoption, higher legitimacy, and to allow the crypto industry to continue developing without being squeezed by regulatory backhands, we must build genuine consumer protection from a systemic level.

TradFi has a circuit breaker mechanism, market maker obligations, and structural safeguards. What does the crypto industry have? Hope. There's also a manual: “Good luck!”

So why should I leave HyperLiquid? Because I choose to support teams that actively address these design flaws, rather than just observing the problems.

I have talked with Jeff and another member of Core 11. They don't seem to think this is part of the current roadmap. That's their choice, and I respect it.

But it must be made clear that no one has a perfect solution, no silver bullet. What matters to me is: who is moving towards a solution, rather than ignoring the problem.

On 10/10, we lost many people. Real lives ended. Real families were destroyed.

The reason is just… a design flaw that allows a single entity to control global prices? The crypto industry cannot sweep this matter under the rug.

Protecting users shouldn't just rely on “luck”.

So the question becomes: who is really building the protection mechanisms that can prevent the next “Binance-style disaster”?

On Solana, I only found one. Drift's liquidation protection is not magic, nor is it perfect, but it does exist. More importantly, it works.

It will check: “Does the oracle price deviate from the 5-minute TWAP by more than 50%?”

If so, it temporarily suspends liquidation. It's just this simple logic that has saved many people.

False breakouts are filtered out. The insurance fund covers extreme situations.

It is not a grand philosophical revolution, but a key step towards rationality.

I am not as smart as Jeff, nor do I dare to claim to know the best industry-level solutions. But I am a user, and users vote with their own funds.

The industry keeps repeating one phrase: “Protecting the protocol is protecting the traders.” But that is not the whole picture. A car is not a complete system without a driver. Both are equally important, forming a wonderful symbiotic relationship.

This article feels like a heartbreaking letter to me.

It's not an advertisement for Drift. It's more like a heartbreaking breakup. Not because love is gone, but because you finally realize that you are heading in different directions.

HL will always be a part of my story. When others ask me where to trade, it will continue to be on my recommendation list.

But now, it is time for me to move forward - towards my values, towards my ideals.

And with sincere gratitude, say to Jeff and the team: “At least we will always have Paris.”