Small Account 'Fat Finger' Places $1 Billion ETH Short? Unusual Address Tests Liquidity by Impacting Order Book Depth

BlockBeats News, August 6th, according to TradingBeats (formerly Hyperinsight) monitoring, the 0xd9a5-starting address initiated a 30-minute ETH sell TWAP this morning, intending to short 52,956 ETH with a notional value of approximately $100.4 million. If fully executed, it would become the largest short position on ETH on Hyperliquid.

However, this order was terminated after only about 45 seconds, with only 1779.67 ETH traded, equivalent to about $3.373 million, achieving a completion rate of 3.36%. An address with an equity of only $335,000 almost placed a short order equivalent to 299 times its funds and then withdrew about 97% within a minute, resembling a "fat-finger" error.

This doesn't seem to be the first "fat-finger" incident. Yesterday, the same address initiated a total of 39 ETH TWAP orders, with 31 aimed at shorting, all of which were prematurely terminated. The median duration of these orders was only 16.5 seconds, with a median completion rate of about 3.42%.

In the previous two rounds, this address actually sold about 1779.67 ETH, allowing them to observe: how quickly approximately 880 ETH on Hyperliquid can be traded, the average slippage, and whether the price will significantly drop after consecutive sales. It is speculated that such abnormal trading may involve two strategies:

1. By using an exaggerated parent order, quickly generate two market price slices close to the account limit, making it more convenient than manually placing continuous orders.

2. Through the first and second trades, assess how much active selling the current ETH order book can tolerate and the actual slippage of the trades.

Despite the repeated cancellations and replacements of these large orders, the actual trades were not insignificant. Yesterday, this address cumulatively shorted 58,200 ETH and then bought them all back, with a total transaction volume of about $218 million. The gross profit for this round was about $398,000, and after deducting approximately $62,000 in fees, the net profit was about $336,000.

As of the time of writing, they are left with a short position of 1779.67 ETH, with a position value of about $3.374 million. With 10x leverage, a position entry price of $1895.08, and a temporary unrealized loss of about $1265, the account has no other active TWAPs or orders.

Whether this $100 million short position was a "fat-finger" error or part of their regular strategy remains unconfirmed; however, based on 39 similar operations yesterday, it does not appear to be a one-time accidental touch.

Additional Information: Hyperliquid's TWAP will generate a sub-order every 30 seconds, execute trades individually, and check the margin; when creating the parent order, it will not freeze all the required margin for the target position at once. Therefore, it can display "Planned to sell 52,956.3 ETH." Data shows that it will move the majority of USDC to a spot account for segregation, approximately $10 million, to avoid real trades. However, theoretically, it has the ability to open a short position of over a billion dollars.