Original Author: @TheWhiteWhaleV2
Compiled by: Peggy, BlockBeats
Editor’s Note: The “10/10 Incident” triggered a painful yet crucial period of introspection within the cryptocurrency industry. When the failure of a single centralized exchange can unleash a network-wide liquidation cascade, it forces us to question: how much pressure can our much-touted “decentralization” truly withstand?
The author of this article, @TheWhiteWhaleV2, is a prominent trader with over 70,000 followers on X (formerly Twitter), known for his deep involvement in crypto trading and an ambitious goal of achieving $100 million in trading profits. By August of this year, his publicly recorded earnings on HyperLiquid alone had reached $95 million, and he stated that his total across all platforms had already “surpassed $100 million.” Even entering October, his career P&L remained positive, maintaining “eight-figure profits year-to-date.”
However, on October 10th, amidst the widespread liquidation cascade, he experienced his first-ever liquidation event, incurring a single loss of approximately $62 million, representing a drawdown of about 62%. Despite this, he emphasized that he “remains net positive” and has continued to rebuild his positions through various means, including selling HYPE tokens.
Previously, he publicly lauded HyperLiquid founder Jeff as a “Nobel laureate of the crypto world.” Yet, he has now made the difficult decision to leave HyperLiquid. For him, this isn’t a sign of disappointment, but rather a migration of values. He urges the industry to shift its focus from “protecting protocols” to “protecting users,” and from celebrating “zero bad debt” to implementing truly meaningful risk buffering mechanisms. After all, a mature financial system should never rely solely on “good luck” and “hope” as its ultimate safety net.
Protocols Survived, But Users “Died”
I’ve made a personal decision: I will no longer trade on HyperLiquid.
I want to emphasize the word “personal”—and it was an incredibly difficult choice. I’m not asking anyone to follow me; I am simply choosing to act in alignment with my evolving values.
Many have witnessed the evolution of my thinking. As humans, we are meant to evolve, reflect, discard old frameworks, and build better new ones.
I know it’s often said not to get emotionally attached to a protocol. But HyperLiquid was truly different for me. Jeff built something the market desperately needed. He brought the issue of “structural fairness” into the spotlight, initiating a vital discussion for the entire industry. He and the HL team deserve their chapter in crypto history, and I sincerely hope they continue to write it.
However, if you’ve followed me long enough, you know I’m an idealist, perhaps even overly so. I cannot simply turn off the part of my brain that sees things not just as they are, but as they “should” be.
October 10th laid bare the industry’s reality for many newcomers. For those who have been around longer, it served as yet another stark reminder: this ecosystem remains fragile and susceptible to manipulation.
A single centralized exchange capable of triggering a global liquidation cascade, momentarily crashing prices across all protocols? This isn’t a “black swan event”; it’s a fundamental design flaw.
A quick recap of that day’s sequence:
Binance utilized its proprietary oracle—which subsequently led to a stablecoin de-peg. This triggered a small but manageable chain of liquidations. The true chaos began when their API “mysteriously went offline.” Delta-neutral market makers suddenly found themselves unable to hedge on major off-exchange venues. Without hedging capabilities, they were forced to withdraw quotes from both CEXs and DEXs. Liquidity evaporated, and prices plummeted instantly.
And the industry’s reaction? A chorus of celebration. “Zero bad debt!” “Liquidations executed perfectly!”
Excellent. The protocols survived, but the users “died.”
Protecting protocols is undoubtedly crucial. But “protecting protocols” does not equate to “protecting traders.” If we aspire to broader adoption, greater legitimacy, and want the crypto industry to flourish without being stifled by regulators, then we must build true consumer protection at a systemic level.
Traditional Finance (TradFi) employs circuit breakers, market maker obligations, and structural guardrails. What does the crypto industry offer? Hope. And a user manual that reads: “Good luck!”
So, why am I leaving HyperLiquid? Because I choose to support teams actively addressing these design flaws, rather than merely observing the problems.
I’ve spoken with both Jeff and another member of Core 11. They don’t seem to view this as part of their current roadmap. That is their choice, and I respect it.
However, it must be clear: no one possesses perfect solutions, no silver bullet exists. What matters to me is: who is moving towards solutions, and who is ignoring the problem?
On 10/10, we lost many. Real lives ended. Real families were shattered.
All because of… a design flaw that allows a single entity to control global prices? The crypto industry cannot sweep this under the rug.
User Protection Should Not Rely Solely on “Good Luck”
The question then becomes: who is truly building protective mechanisms to prevent the next “Binance-style disaster”?
On Solana, I found only one. Drift Protocol’s liquidation protection isn’t magic, nor is it perfect, but it is real. More importantly, it worked.
It checks: “Does the oracle price deviate by more than 50% from the 5-minute TWAP?”
If so, it temporarily pauses liquidations. This simple logic saved many.
False breakouts were filtered out. The insurance fund absorbed extreme situations.
It’s not a grand philosophical revolution, but a critical step towards rationality.
I don’t possess Jeff’s intellect, nor do I claim to know the best industry-wide solutions. But I am a user, and users vote with their capital.
The industry constantly repeats the mantra: “Protecting the protocol is protecting the trader.” But that’s not the full picture. A car without a driver isn’t a complete system. Both are equally important, forming a beautiful symbiosis.
This article feels like a heartbreaking letter to me.
It’s not an advertisement for Drift. It’s more like a wrenching breakup. Not because the love is gone, but because you finally realize you’re heading in different directions.
HyperLiquid will always be a part of my story. When others ask me where to trade, it will remain on my recommendation list.
But now, it’s time for me to move forward—towards my values, towards my ideals.
And with sincere gratitude to Jeff and the team, I say: “We’ll always have Paris.”
(The above content has been excerpted and republished with authorization from partner PANews. Original Link | Source: BlockBeats)
Disclaimer: This article is for market information purposes only. All content and opinions are for reference only and do not constitute investment advice. They do not represent the views or positions of BlockTempo. Investors should make their own decisions and trades. The author and BlockTempo will not be held responsible for any direct or indirect losses incurred by investors’ transactions.
