Hyperliquid News Today: DeFi 'Degen Warfare' Erupts: POPCAT Exploit Results in $4.9M Loss for Hyperliquid

Hyperliquid, a prominent decentralized derivatives platform, incurred a $4.9 million loss following a coordinated manipulation of the POPCAT token, according to insights from blockchain analytics and on-chain investigators, as

reported. The scheme, executed by a single individual, began with the withdrawal of $3 million in from the centralized exchange OKX, which was then split among 19 different wallets to open a leveraged long position worth $20–30 million in POPCAT, as reported. The perpetrator placed substantial buy orders around $0.21 per token, artificially driving up the price before rapidly pulling liquidity, causing a sharp drop and a wave of liquidations, as reported. Hyperliquid’s community-driven liquidity provider (HLP), which is intended to absorb unsuccessful trades, had to cover the remaining deficit after all collateral was depleted, as reported.

The exploit took advantage of POPCAT’s limited liquidity and automated risk controls, with the attacker’s $3 million collateral being liquidated within seconds of the price crash, as

reported. Hyperliquid responded by briefly halting its bridge to restore stability, but resumed deposits and withdrawals within 25 minutes, as reported. Blockchain analyst MLMabc called the event a “calculated effort to disrupt” Hyperliquid, stressing that no one would risk $3 million “out of mere recklessness or ignorance,” as reported.

POPCAT’s value plunged 19% in a single day to $0.1262, deepening its year-to-date decline to over 91%, as

reported. The token, which is a Solana-based , now holds a market cap of about $123 million, signaling diminished investor trust, as reported. Hyperliquid’s HLP, the backbone of its risk management system, is now under scrutiny regarding its resilience to such attacks, especially in illiquid markets, as reported.

This is not Hyperliquid’s first encounter with market manipulation. In March 2025, a similar exploit targeting the JELLYJELLY memecoin forced the HLP to shoulder $12 million in unrealized losses, as

reported. Since then, critics have advocated for tighter governance and enhanced risk measures, pointing out that decentralized exchanges (DEXs), despite their openness and user focus, are still susceptible to manipulation, as reported.

Market observers have dubbed the POPCAT episode “peak degen warfare,” a phrase that captures the bold, high-stakes strategies seen in the unpredictable memecoin sector, as

reported. One commentator remarked on the straightforwardness of the attack: “A textbook case of creating fake demand and then dumping. Nothing extraordinary—just exploiting shallow liquidity and automated LP coverage,” they posted on X, as reported.

Hyperliquid’s HYPE token, which is central to the platform, has dropped below important technical thresholds, with analysts warning of further declines if the $35 support is lost, as

reported. Open interest in HYPE futures has also fallen, indicating reduced interest from retail traders, as reported. The platform has not yet provided a timeline for addressing the incident or updating its risk management framework, as reported.

This incident highlights persistent weaknesses in DeFi platforms, where leverage and liquidity mismatches can intensify systemic threats. As speculation in memecoins increases, platforms like Hyperliquid may face mounting demands to balance decentralization with effective protections against market manipulation, as

reported.