Curriculum·J302 Swap Execution: AMMs, MEV, and DEX Architectures·about 32 min
Perp DEXs
By the end of this lesson you can
- →Name the components a perpetual venue adds beyond a spot exchange
- →Identify who absorbs a liquidation that cannot be filled, and what that makes them
- →Compute why a thinly traded listing is an attack on the venue rather than on a trader
- →Determine who can override a price, and how quickly
Junior · enrolled learners
This lesson opens with Hyperliquid and JELLY, March 2025.
- What happened
- A trader opened a large short in the thinly traded JELLY perpetual on Hyperliquid while building a long position in the underlying spot market elsewhere, then pushed the spot price up. The rise triggered liquidation of their own short, and under the venue's rules a liquidated position that cannot be closed in the market passes to the HLP vault, which is funded by depositors. The position was too large for the vault to clear, and its unrealised losses reached between $12M and $13.5M as the price continued to rise. Hyperliquid's validators reached consensus in about two minutes, delisted the market, overrode the JELLY oracle price, and settled all positions at $0.0095 rather than the roughly $0.50 the market was showing. Arthur Hayes commented that the sector should stop pretending Hyperliquid was decentralized, and Bitget's chief executive called the response potentially an FTX 2.0.
- The decision point
- The vault depositors were the counterparty to a liquidation nobody else would take, which is the component a perpetual venue adds and the one people deposit into for yield without reading. And the resolution was a price override agreed by a validator set in two minutes, which protected the vault by deciding what the asset was worth. Both facts were properties of the architecture before the trade, and both are readable from the documentation.
- Recorded loss
- $13,500,000
What you will be able to answer
- →What does a perpetual venue add beyond spot?
- →Who is the counterparty of last resort?
- →Why is a thin listing an attack surface?
- →What was the resolution and what does it tell you?
Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.
It is free. We do not sell the list and there is nothing to buy at the end of it.
Sources and review
- https://www.coindesk.com/markets/2025/03/26/hyperliquid-delists-jellyjelly-after-vault-squeezed-in-usd13m-tussle
- https://www.halborn.com/blog/post/explained-the-hyperliquid-hack-march-2025
- https://oakresearch.io/en/analyses/investigations/hyperliquid-jelly-attack-context-vulnerability-team-solution
- https://incrypted.com/en/hyperliquid-loop-jellyjelly-manipulations-12-million-losses-and-questions-of-decentralization/
Confidence medium·Volatility high·Reviewed 2026-08-06·Owner unassigned
Contested
Whether the validator override was the right decision is genuinely contested. It protected vault depositors from a loss caused by manipulation, and it required deciding an asset's price by vote. Serious commentators took both positions and this lesson presents the tradeoff rather than resolving it.
R402 covers perpetual mechanics at Senior level, including funding, mark price construction and auto-deleveraging in depth. This lesson covers the perpetual venue as an architecture and the backstop as its distinctive component. Keep the split.