#Hyperliquid may be on track to become #FTX 2.0. The way it handled the $JELLY incident was immature, unethical, and unprofessional, triggering user losses and casting serious doubts over its integrity. Despite presenting itself as an innovative decentralized exchange with a bold vision, Hyperliquid operates more like an offshore CEX with no KYC/AML, enabling illicit flows and bad actors. The decision to close the $JELLY market and force settlement of positions at a favorable price sets a dangerous precedent. Trust—not capital—is the foundation of any exchange (CEX and DEX alike), and once lost, it’s almost impossible to recover. Moreover, the platform's product design reveals alarming flaws: mixed vaults that expose users to systemic risk, and unrestricted position sizes that open the door to manipulation. Unless these issues are addressed, more altcoins may be weaponized against Hyperliquid—putting it at risk of becoming the next catastrophic failure in crypto.

Hyperliquid

$HYPE to 888

Open interest reached an all-time high of $18B on Hyperliquid

I’m still waiting to buy more $HYPE at $40. Hyperliquid

Most tech giants in the 2000s built their infrastructure and product as one entangled unit. Amazon had the foresight to separate out AWS as an API layer, of which Amazon retail was the first of many users. Today, AWS generates more profit than all of Amazon's other business lines combined. Hyperliquid is built with the same philosophy. Housing all of finance requires thoughtfully designed, open financial primitives. Each primitive should obey the Unix principle of "Do one thing and do it well." Talented builders then have the foundation to chain these together to create magical applications. HyperCore borrowing is an example to highlight this philosophy in action. Most other platforms implement portfolio margin by marking an account's collateral to market value with an LTV haircut, creating borrowed assets without an explicit lender. This system is simpler to implement, but misses a golden opportunity for composability. Hyperliquid instead begins with a borrow/lend protocol on HyperCore. Every borrowed asset is sourced from a supplier, so risk is isolated within the borrow/lend primitive instead of platform-wide. HyperCore's portfolio margin system is implemented as an orchestration layer that composes borrow/lend, with other primitives such as perps, spot, and outcome trading. This decomposition has several nice corollaries: 1. Today's announcement of manual borrowing is not a new feature, but simply an extension of the underlying primitive. Borrowers on day one have access to 400M and growing of supplied liquidity. 2. Portfolio margin users earn interest on their idle stablecoin collateral. This is not a new feature, but a natural byproduct of composing trading with lending. 3. System safety is easier to reason about when perp and borrow/lend margining are independent. In the same way that math theorems almost prove themselves when the right abstractions are defined, composable designs just feel right.