Jeff Yan, Hyperliquid's founder, responded to criticism that the platform did not prioritise protocol revenues but valued traders' interests, while defending the exchange's automated position reduction (ADL) mechanism adopted during the market crash on October 10.
Yan said the ADL operation had generated "hundreds of millions of dollars in revenue" for users by closing profit short orders at favorable prices, while the platform's liquidity pool also ceded potential profits to users rather than maximising its own profits. The remarks come amid intense scrutiny of how decentralized perpetual contract exchanges handle clearing during periods of wild market volatility.
Yan stressed that HLP could have made hundreds of millions of dollars in extra profits if more positions had been backstopped, but that would have led to irresponsible risk exposure. He also said that the ADL mechanism is a "win-win" solution that reduces the risk exposure of the platform while taking into account the interests of users.
Hyperliquid Lianchuang: ADL mechanism brings hundreds of millions of dollars in revenue to users, not a priority to pursue platform revenue
2025-10-20 03:13:38
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