Hyperliquid founder Jeff criticizes centralized exchanges for underreporting liquidations by up to 100x, urging transparency as HIP-3 upgrade boosts onchain derivatives.
Hyperliquid founder Jeff recently criticized certain centralized exchanges. He stated they severely underreport liquidation data publicly. He said that thousands of liquidations could take place immediately. Yet, only one liquidation can be visible to users publicly. Consequently, this underreporting may easily be 100-fold the actual amount. This lack of transparency destroys the trust of users tremendously.
Onchain Transparency Exposes Centralized Exchanges Reporting Gaps
Hyperliquid’s fully on-chain liquidations is not easy to compare. They are significantly different from under-reported CEX liquidations. Specifically, Hyperliquid is a transparent blockchain. Every order, trade and liquidation occurs onchain. This is a very important architectural choice for integrity.
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Anyone can publicly permissionless verify the execution of the chain. This includes all the liquidations on the platform. Furthermore, the users can verify the fair execution for all those involved. In so doing, they can also check the solvency of the entire system in a real-time manner. Therefore, this transparency is one of the most important features of the protocol.
Transparency and neutrality are basic requirements. There are significant reasons to use fully on-chain DeFi. This structure is considered to be the perfect infrastructure for global finance. It eliminates blind trust on centralized parties.
In contrast, some CEXs make their process public. They admit they have a massive underreporting of user liquidations. For instance, on Binance, there may be thousands of liquidation orders within one second. However, there is often only one liquidation reported. This disparity is a matter of major concern.
Liquidations often occur in large-volume, short-time periods. Thus, it is easy to assume this underreporting could reach 100 times the real number. This situation occurs in a situation of high market volatility. Ultimately, this practice conceals the real activity in the market from the public.
Jeff said he had hopes for the broader industry’s future. He wants the industry to put its emphasis on transparency and neutrality. He views these qualities as important features of the new financial system. Jeff also urges other platforms to follow the completely transparent model. This will increase the overall reliability of the market.
Hyperliquid Network Upgrade Aims to Expand Decentralized Derivatives
The Hyperliquid platform is simultaneously advancing of the pack with development. It plans on activating the HIP-3 network upgrade today. This is a very important step in the growth of an ecosystem. As a result, this update allows qualified developers to build markets. These new markets will be permissionless and perpetual contracts.
Deployers will need to pay a lot of tokens. They need to stake 500,000 HYPE tokens to launch a perpetual DEX. This staking requirement is to ensure committed participation. Therefore, it enables the alignment of interests between the market creators and the stability of the network. This also provides a very important safety feature.
The upgrade integrates completely with HyperEVM. This integration is very important in the capabilities of the network. HyperEVM supports standard smart contract functionality to come through without any issues. Furthermore, it has critical safety measures implemented for all users.
This dual focus is strategic to Hyperliquid. They criticize current standards (which are centralized) severely. At the same time, they provide a better decentralized option. This move, in turn, attracts developers and traders looking for reliable infrastructure. On the other hand, the platform is actively pursuing to show the feasibility of on-chain operations.
The HIP-3 upgrade will greatly increase the platform’s derivatives offerings. This puts more competition in the way of larger, centralized exchanges. Thus, it is a compelling transparent option for institutional flow. Hyperliquid is becoming a leader in verifiable on-chain finance. This makes it solid in its commitment to trustless operation.
