I just saw a very interesting analysis by 0xMacroGuy about a very creative attack against the HLP of Hyperliquid. Basically, the attacker entered with massive long positions in Fartcoin ( a low-liquidity coin ) in a suspicious way, then intentionally burned their own funds to push the position into loss. When everything was liquidated, the ADL was triggered and forced the HLP to inherit this entire toxic position.

The result? The attacker lost money, but the HLP took a much bigger loss, something like $1.2 million in 24 hours. According to the numbers I saw, this represented a drop of about 0.35% in the HLP. It’s like an attack where the guy is willing to burn money just to cause greater damage to the pool.

Looking at the current situation, the HLP vault has around $420 million in TVL, but the APR has been zero over the last 30 days. It’s probably because of these events. These low-liquidity attacks are somewhat concerning for derivatives protocols.