HLP Faces $4.9 Million Loss from POPCAT Market Attack

On November 13, an attacker orchestrated a liquidation attack on Hyperliquid’s POPCAT market using $3 million in capital and 19 wallets, resulting in a $4.9 million loss for HLP.

This incident highlights vulnerabilities in low-liquidity markets, affecting Hyperliquid’s credibility and sparking concerns about similar future risks in decentralized finance protocols.

POPCAT Price Crash After $4.9 Million Loss

Analyst @mlmabc revealed that an attacker orchestrated a targeted attack using 19 wallets and $3 million of capital.

They established a $20 million to $30 million long position in POPCAT using 5x leverage. A massive buy wall was set up, then abruptly removed, causing the price of POPCAT to crash.

This act of losing $3 million in a few seconds was not foolish or negligent, but a ‘deliberate attack’ against HLP and Hyperliquid.

Market reactions from within the industry were limited.

Some community members expressed concerns about the centralization risk in emergency responses.

Historical Precedents and Expert Opinions on Future Safeguards

Did you know? Historical precedents such as the March 2025 JELLYJELLY incident also involved illiquid token manipulations on Hyperliquid, resulting in significant protocol interventions.

According to CoinMarketCap, Popcat trades at $0.13 with a market cap of $129.26 million and a 24-hour volume of $232.67 million, reflecting a 400.73% increase. Despite recent volume spikes, price plummeted 14.61% in the last day, continuing a downward trend over the past 90 days.

Experts from Coincu’s research team suggest the attack highlights a need for improved protocols to handle market anomalies in decentralized exchanges. They advocate for enhanced risk management tools and better liquidity provisions to prevent similar occurrences in the future. Focus on strengthening algorithmic defenses and preventive governance measures remains paramount for long-term market stability.