XPL Flash Crash Review: 16 Linked Wallets on Hyperliquid Withdrew Margin in Advance, Causing HLP Liquidation Vault to Lose $556,000

BlockBeats news, November 2: Quote Markets team member filo published a post reviewing the XPL flash crash on Hyperliquid on November 1, stating that at 04:32 (UTC) on November 1, XPL fell 18% on Hyperliquid within a single minute from the opening price to its lowest point, while Bitcoin's lowest price during the same period was only 0.04% below its opening price. Before this volatility occurred, 16 associated wallets established large XPL long positions through 4 groups of fund transfer networks and concentratedly withdrew margin before the price decline. Among them, 12 wallets completed 20 withdrawals between 04:24 and 04:32, withdrawing a cumulative approximately $2.0386 million, while another 7 withdrawals were rejected due to insufficient balances. Data shows that these wallets exhibited similar fund flows, withdrawal testing, and phased buying behavior, and analysis suggests they may have been controlled by the same operator or multiple participants acting in coordination.

As of before the price decline, these 16 wallets collectively held approximately 269 million XPL long positions, worth about $23.09 million, accounting for a considerable proportion of the increase in open interest during the same period. At 04:32:43, Hyperliquid triggered the first related liquidation; at that time, XPL had already fallen about 6% from the previous minute on both Binance and Hyperliquid, indicating that the price decline occurred earlier than the start of Hyperliquid liquidations. Subsequently, the HLP liquidation vault took over approximately 160 million XPL, worth about $12.177 million, and lost about $555,800 during the subsequent selling process of about 75 minutes. Of this, about $282,400 came from the difference between the takeover price and the Binance market price, about $260,300 came from further declines in XPL during the selling period, and another about $5,218 came from trading fees. This loss accounted for about 0.33% of HLP's total funds, but was equivalent to 55.6% of the liquidation vault's own funds.

The overall trading result of these 16 wallets on Hyperliquid was still a loss of about $711,000, and there is no evidence showing that they profited on this platform through this operation. Although the chronological order of the early fund withdrawals and the liquidation is clear, public on-chain data cannot confirm whether these wallets directly caused the XPL price decline, nor can it determine the identity of the actual sellers and whether they established hedge positions on other trading platforms. The report also emphasizes that the relevant conclusions are based only on public data from Hyperliquid and Arbitrum; account and complete trading data from other trading platforms are not visible, so the possibility that the relevant wallets profited on other platforms cannot be ruled out.