Hyperliquid CEO: Centralized Exchanges Minimize Reporting on Liquidations

Jeff Yan, co-founder and CEO of Hyperliquid, stated that the data reporting methods of centralized crypto exchanges, particularly Binance, are likely to significantly underestimate liquidations.

In a post on X this Monday, Yan emphasized a documentation page from Binance, the leading crypto exchange globally, pointing out that the platform’s order snapshot stream only accounts for the most recent liquidation per second interval.

“Since liquidations can occur in bursts, this could lead to a 100x under-reporting under certain conditions,” Yan remarked.

His comments align with an earlier post from CoinGlass, a crypto data platform, which noted that “the actual liquidated amount is likely much greater” as “Binance only reports one liquidation order each second.”

Related: Crypto liquidations hit $1.8B in a day: Final flush or more to come?

$19 billion liquidation event

Bitcoin (BTC) dropped to $102,000 on Friday following Trump’s announcement of extensive tariffs on China. Similarly, Ether (ETH) fell to $3,500, and Solana (SOL) dropped below $140 amid a marketwide sell-off.

Moreover, CoinGlass data reveals that Friday recorded $16.7 billion of long liquidations and $2.456 billion of short liquidations — marking the largest liquidation event in crypto’s history.

The Liquidation Order Snapshot Stream provides real-time updates on force-liquidated positions. While this batching method enhances performance, Yan cautioned that only reporting the last liquidation might understate significant liquidation events, as they handle over 100 liquidations per pair per second.

Following the market crash on Friday, over 1,000 Hyperliquid (HYPE) wallets were completely wiped out. According to Lookonchain data, more than 6,300 wallets faced losses exceeding $1.23 billion.

Related: The secret map whales use to liquidate you (learn how to read it)

Centralized finance stumbled

During the flash crash, centralized crypto trading platforms encountered numerous challenges. Binance, the top crypto exchange, has faced significant scrutiny over various reported issues.

In a Sunday X post, Binance CEO Yi He stated that the platform’s core contract and spot matching engines, along with API trading, remained stable during the event. However, she acknowledged that “some individual functional modules experienced brief lags, with certain wealth management products undergoing de-pegging.”

Despite this, she asserted that depegging events did not trigger the market crash, emphasizing that they occurred simultaneously and subsequently to the downturn. She also noted that “Binance initiated and completed compensation” for those affected by the depegging, totaling over $280 million.

Nevertheless, widespread reports indicated that the prices of some major altcoins reached $0 on Binance during the mass liquidations. A pseudonymous crypto influencer, Hanzo, shared his experience during the downtime:

“On Binance, buttons stopped functioning. Stop orders froze, and limit orders hung, yet liquidations executed flawlessly.”

Binance later clarified that the anomaly was merely a “display issue,” induced by adjustments to minimum price decimals for pairs like IOTX/USDT, not reflective of actual market data:

“Certain trading pairs, such as IOTX/USDT, recently reduced the number of decimal places permitted for minimum price movements, leading to displayed prices of zero, which is a display error, not indicative of an actual $0 price.”

DeFi platforms show greater resilience

The Ethena USD (USDE) stablecoin maintained its peg on the decentralized finance (DeFi) protocol Curve (CURV), even as it deviated significantly on Binance and Bybit. Haseeb Qureshi, a managing partner at crypto venture capital fund Dragonfly, highlighted in a Saturday X post that the USDE fell to $0.95 on Bybit and well below $0.7 on Binance but didn’t lose its peg on Curve.

Guy Young, founder of Ethena Labs, stated that USDE minting and redeeming functioned “perfectly” during Friday’s flash crash. He provided data revealing that $2 billion in USDE was redeemed within 24 hours across various crypto exchanges, including Curve, Fluid, and Uniswap.

Tom Cohen, head of investment and trading at quantitative crypto asset management firm Algoz, told Cointelegraph that “the beginning can be traced to around $60–$90 billion of USDE being simultaneously dumped onto Binance to exploit a pricing discrepancy, triggering a series of substantial sell-offs.” This sell-off, he elaborated, “rapidly influenced thinly traded markets.”

Hyperliquid also celebrated its performance following the outages at centralized exchanges. The platform indicated in a Saturday X post that “amid the recent market volatility, the Hyperliquid blockchain experienced zero downtime or latency issues, even under record traffic and volumes.”

“This served as a crucial stress test, demonstrating that Hyperliquid’s decentralized and fully on-chain financial system can be both robust and scalable,” the post concluded.