Navigating DEX Challenges

Perpetual swap DEX Hyperliquid suffered a whale attack and was on the brink of losing $15 million. It promptly responded in a way that generated a fair amount of controversy.

The founder and CEO of Ambient Finance Doug Colkitt joined the show to explain:

• How perp swaps work
• How a whale used the low-liquidity memecoin $JELLY to attack Hyperliquid’s vault
• How Hyperliquid’s response broke DeFi taboos around decentralization, oracles, etc.
• Criticisms of and justifications for the team’s decisions
• What can be done to prevent similar attacks in the future

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Guest

• Doug Colkitt, Founder and CEO of Ambient Finance

Links

•  Accounts of the $JELLY whale attack on Hyperliquid and its response 
• X: The story
• X: Nuking the vault
• X: How Hyperliquid responded

• Arguments for and against Hyperliquid’s solution:
• ZachXBT: ZachXBT calls out alleged hypocrisy
• Jordi Alexander: Shorting on a perp is not robust
• Jose Maria Macedo: How do they override the oracle price? 
• Doug: Closing positions at an arbitrary price
• Gracy Chen: Casting doubts on integrity
• Steven.hl: In defense of HL
• Kam: Of course quorum was reached easily

• What precedent Hyperliquid’s actions set
• Kevin Zhou: Binance and OKX set a precedent

Timestamps:

👋 0:00 Intro

🤔 02:59 What is Hyperliquid?

🐳 05:16 How a whale used $JELLY to attack

⛔ 09:19 How Hyperliquid responded

📈 11:59 Why did Binance and OKX suddenly list the memecoin?

🤔 16:32 How did Hyperliquid ‘change the rules’ to protect themselves?

⚖️ 19:25 ‘Losses for thee, but not for me’: Hyperliquid’s hypocrisy?

💡 24:39 Doug’s ‘cleaner’ solution

👀 28:35 Will this have positive or negative knock-on effects?

🧹 31:20 Tidying up illiquid markets

📰 32:46 Crypto News Recap

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