Historical bad-debt events
Hyperliquid's assessment for RD-F-067 — scored yellow on the v1.7.0 rubric. The evidence below is the curator's reasoning for this score.
Evidence summary #
Two confirmed bad debt events in ~12 months. (1) JELLY incident, March 26 2025: HLP vault accumulated ~$13.5M unrealized loss before validators voted to delist and settle using an oracle override; Hyperliquid Foundation covered the settlement; no permanent user loss but ~$13.5M transient bad exposure on HLP. (2) POPCAT incident, November 2025: attacker opened $26M leveraged POPCAT longs across 19 wallets then crashed the price; HLP absorbed ~$4.5–4.9M in realized bad debt. A third ETH-margin manipulation event also occurred in 2025. Pattern: recurring market-manipulation-driven bad debt on thin/long-tail perp markets. Yellow (not red) because no users permanently lost funds in either event — Foundation covered JELLY; POPCAT bad debt was absorbed into HLP vault P&L rather than socialised to user margin.
Sources #
- URLPOPCAT Manipulation Hits Hyperliquid with $4.9M Loss — CoinDeskPOPCAT attack — CoinDeskretrieved 2026-04-28
- 2025-26-03 Hyperliquid JELLY Incident Post-mortemJELLY incident wiki post-mortemretrieved 2026-04-28
- HyperLiquid Delists JELLY After Vault Squeezed in $13M Tussle — CoinDeskCoinDesk JELLY reportretrieved 2026-04-28
- Hyperliquid Hit by Third Market Manipulation Attack — $5M Bad Debt After POPCAT CrashPOPCAT attack — Yahoo Finance / CCNretrieved 2026-04-28
Methodology #
Count and sum (USD) the number of documented bad-debt events where the protocol socialized losses across depositors.
See the full factor methodology and distribution across all protocols →