Hyperliquid founder Jeff Yan has addressed criticism, suggesting the platform prioritizes protocol revenue over trader pursuits.
Abstract
- Jeff Yan says ADL saved merchants hundreds of thousands throughout October 10 market crash.
- Hyperliquid handed earnings to customers as a substitute of maximizing protocol revenue.
- Founder contrasts DeFi onchain transparency with CEX liquidation secrecy.
He additionally defended the change’s auto-deleveraging mechanism through the October 10 market crash.
Yan acknowledged that ADL actions made customers “a whole lot of hundreds of thousands of {dollars}” by closing worthwhile brief positions at favorable costs, whereas the platform’s liquidity pool handed on potential earnings to customers reasonably than maximizing its personal returns.
The protection comes amid scrutiny of how decentralized perpetual exchanges deal with liquidations throughout unstable market circumstances.
Yan emphasised that if extra positions had been backstop liquidated, HLP may have made a whole lot of hundreds of thousands extra in revenue, however would have confronted irresponsible threat publicity.
He additionally referred to as the ADL strategy a “win-win” that decreased platform publicity.
ADL method prioritizes simplicity and person understanding
Yan defined that Hyperliquid’s ADL queue follows an identical method to most centralized exchanges and incorporates each leverage used and unrealized revenue on open positions.
Group suggestions urged extra refined ADL mechanisms, similar to partially offsetting lengthy and brief positions in traditionally correlated property.
Yan famous that elevated complexity may enhance efficiency however questioned whether or not the advantages benefit the added issues.
The founder acknowledged that analysis is ongoing into whether or not substantial enhancements justify extra complicated formulation. Nonetheless, he emphasised that no different main venues use extra superior logic for ADL queues.
Onchain transparency distinguishes DeFi from CEX practices
On October 13, Yan addressed the general issues about liquidation reporting by contrasting Hyperliquid’s absolutely on-chain operations with centralized change practices.
Yan referred to as out centralized exchanges for underreporting person liquidations and cited Binance documentation displaying that even when 1000’s of liquidation orders happen in the identical second, just one will get reported.
This may very well be a 100x underreporting underneath sure circumstances when liquidations occur in bursts.
Yan expressed hope that the business will acknowledge transparency and neutrality as vital options of the brand new monetary system. He additionally inspired different platforms to observe Hyperliquid’s strategy to verifiable on-chain operations.
