Hyperliquid, the decentralized perpetuals trading platform, has introduced a significant update to its blockchain infrastructure. The upgrade introduces fully on-chain validation for asset delisting. 

This follows after a $6 million exploit, where a whale forced a short squeeze of the JELLY memecoin, which led to the exchange delisting the memecoin.

Hyperliquid introduces fully on-chain validation before asset delisting

In a post on X, Hyperliquid revealed that it has upgraded its blockchain, introducing fully on-chain validator voting for asset delisting. This development enables a quorum of validator stakes to autonomously trigger asset removals directly on-chain without the need for off-chain coordination. 

Hyperliquid said the move is a show of its commitment to enhancing decentralized governance within its ecosystem, following the backlash it got after delisting the JELLY memecoin.​

Hyperliquid said “As a demonstration of the primitive, the Hyper Foundation validators 2-5 will vote to delist MYRO perps around 13:00 UTC on March 29. Hyper Foundation validator 1 will abstain from voting until delegations to initial Delegation Program participants are complete,” adding that validators will likely close votes off-chain for clarity. However, the Hyper Foundation does not speak for them.

On March 26, 2025, Hyperliquid experienced a high-profile trading manipulation involving the memecoin JELLY. A trader exploited the platform’s liquidation mechanisms by strategically opening both long and short positions. The manipulation resulted in significant exposure for the Hyperliquidity Provider (HLP) vault. In response, the perp DEX shut down the market, closing the price of the token at about $0.0095, turning the potential loss into over $700,000 profit. 

Hyperliquid addresses centralization concerns

The exchange has faced criticism from the crypto community for how it handled the JELLY incident. Earlier in March, the exchange took action against leveraged trading, increasing margin requirements after the HLP lost several millions of dollars in a large Ether liquidation event. Even that move dropped user confidence in its claim of decentralization. 

Hyperliquid has faced criticism in the past over centralization concerns. Members of the crypto community have highlighted several issues such as limited transparency, restricted participation, and API access limitations. Also, Hyperliquid controls 81% of the staked HYPE tokens, which the community sees as evidence of centralization.

The CEO of Bitget, Gracy Chen, wrote, “The way it handled the $JELLY incident was immature, unethical, and unprofessional, triggering user losses and casting serious doubts over its integrity,” adding that it could become FTX 2.0. 

Blockchain analyst ZackXBT also questioned its governance, pointing out inconsistencies in the platform’s intervention strategies. He noted that while Hyperliquid acted swiftly during the JELLY incident, it had previously claimed its inability to address other significant issues, doubting its commitment to decentralization.

Hyperliquid acknowledged the event and said affected users will be reimbursed. “Technical improvements will be made, and the network will grow stronger as a result of lessons learned,” it added. 

The incident led to the exchange’s native crypto HYPE experiencing an 11% price drop.

Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot

Earn more PRC tokens by sharing this post. Copy and paste the URL below and share to friends, when they click and visit Parrot Coin website you earn: https://parrotcoin.net0

PRC Comment Policy

Your comments MUST BE constructive with vivid and clear suggestion relating to the post.

Your comments MUST NOT be less than 5 words.

Do NOT in any way copy/duplicate or transmit another members comment and paste to earn. Members who indulge themselves copying and duplicating comments, their earnings would be wiped out totally as a warning and Account deactivated if the user continue the act.

Parrot Coin does not pay for exclamatory comments Such as hahaha, nice one, wow, congrats, lmao, lol, etc are strictly forbidden and disallowed. Kindly adhere to this rule.

Constructive REPLY to comments is allowed