Who Won and Who Lost: Vaults, Market Makers, and Traders

The hosts examine HLP vs LLP outcomes, concentrated trader losses, and platform choices that prefer depositors or traders.

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Welcome to The Chopping Block — where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner chop it up about the latest in crypto. This week, Doug Colkitt, Founder Ambient Finance & Founding Contributor at Fogo, joins us as one of the wildest weekends in crypto history drags us back on air: a record $19B+ in liquidations, gas spiking toward $400, exchange APIs wobbling, and ADL ripping through perps as hedges vanished. We unpack what ADL actually does, why delta-neutral farmers got nuked, and how Binance’s USDe and staked ETH/SOL pegs snapped amid index design and mint/redeem gaps—followed by refunds. We get into HLP vs. LLP (vaults vs. winning traders), the Hyperliquid “whale” short ahead of the tariff tweet, cross-margin reflexivity that torched alts, and why market makers wore outsized pain. Then we zoom out to infra: sequencers, force-inclusion in practice, and the case for on-chain clearing plus real insurance funds before the next

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Show highlights

🔹 Record wipeout — $19B+ liquidations, 1.6M traders rekt, gas spiking to ~$400 while major exchanges wobbled.

🔹 ADL, decoded — What happens when perps run out of counterparties; socialized losses, P&L/leverage ranking, and why hedges vanished.

🔹 Delta-neutral nuked — Cross-venue long/short farmers turned naked as ADL picked off one leg first.

🔹 Binance peg breaks — USDe to ~$0.68 on Binance, staked ETH/SOL snapped; refunds >$250M after index/oracle and mint-redeem gaps.

🔹 Flows vs. “attack” — Earn users rushing to USDT + copy-trade momentum likely amplified the depeg more than cunning index games.

🔹 DeFi vs. CeFi — Perp DEX performance broadly comparable; transparency gaps in ADL policies and liquidation mechanics laid bare.

🔹 Vaults vs. traders — HLP vs. LLP outcomes show who platforms chose to protect in tail events—and the retention risks of clipping winners.

🔹 OI collapse — Hyperliquid open interest ~15B → ~6B; cross-margin reflexivity helped nuke alts far worse than BTC.

🔹 Why it felt one-sided — Market-maker/API failures and risk misallocation made typically “safe” actors eat outsized losses.

🔹 The whale short — A massive Hyperliquid short pre-tariff tweet sparks insider-vs-coincidence debate.

🔹 Infra faceplants — Sequencers down, force-inclusion in theory only, docs offline—while base L1s largely kept ticking.

🔹 What to fix — On-chain clearing, real insurance funds, sane ADL ranking, robust mint/redeem, and better index/oracle design before the next shock.

Hosts

⭐️Haseeb Qureshi, Managing Partner at Dragonfly
⭐️Robert Leshner, CEO & Co-founder of Superstate
⭐️Tarun Chitra, Managing Partner at Robot Ventures
⭐️Tom Schmidt, General Partner at Dragonfly

Guest

⭐️ Doug Colkitt, Founder Ambient Finance & Founding Contributor at Fogo

⁠⁠Disclosures⁠⁠

Timestamps

00:00 Intro

01:11 $19B+ Liquidated

04:35 Personal Experiences & Reactions

08:30 Understanding Auto De-leveraging (ADL)

14:37 Binance & USDe Incident

23:19 DeFi vs CeFi Performance

26:05 Zero-Sum & Greedy Algorithms

34:26 Vaults & Trader Protection