The price of Hyperliquid’s HYPE token has dropped over 16% in hours after the Jellyjelly fiasco brought skepticism to the platform and its credibility. The incident has also loosen crypto traders’ trust in Hyperliquid as they are withdrawing assets and moving out of the DEX.
On March 27, Hyperliquid faced a huge wave of criticism from the crypto community after it delisted jellyjelly (JELLY) token from the platform after a trader allegedly tried to liquidate DEX’s HLP vault in a well-planned trading trick.
Following this facade, the reputation and credibility of Hyperliquid has been put on risk with it severely impacting the platform’s native HYPE token price. As per Coinmarketcap data, HYPE price is currently trading at $13.53 – down 16% in the past 24 hours.
HYPE price is currently down 61% from it’s all-time high of $35.02, it marked on December 21, 2024. The token gained significant traction in its initial days of launch with it surging over 900% in the span of just one month.
The Hyperliquid & jellyjelly Controversy
The abrupt delisting of the jellyjelly (JELLY) token has sparked debates in the crypto community, with many traders questioning the fairness and transparency of Hyperliquid’s decision. Some people argue that the trader’s strategy was within the scope of decentralized finance (DeFi) trading, while others believe that the platform was justified in taking action to protect its liquidity providers.
As earlier reported by The CryptoTimes, Hyperliquid has taken a loss of over $12 billion in this incident and it has been facing massive backlash from the crypto community.
This controversy has now drawn attention to the risks associated with trading on decentralized exchanges (DEXs). Citing this incident, many critics are pointing out that while DeFi platforms promote autonomy and self-custody, cases like this highlight the potential for sudden, unilateral decisions by protocol operators.
As a result, traders are now reassessing the reliability of Hyperliquid with many shifting towards alternative DEXs that offer greater transparency in handling such disputes.
Also read: Hyperliquid on Track to Become FTX 2.0: Bitget CEO After JELLY Incident
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