Hyperliquid personally stepped in to reconcile accounts, debunking the rumor of a 362 million funding gap targeting competitors.

A technical article published on blog.can.ac dismantles Hyperliquid's binary files through reverse engineering, accusing it of a serious $362 million funding gap among 9 other issues, stating that it is a Centralized Exchange disguised as a blockchain. In the face of FUD, Hyperliquid personally stepped in to reconcile accounts, successfully clarifying funding security issues and rarely calling out competitors Lighter and Aster.

Hyperliquid 3.62 billion funding doubts: audit blind spots of dual ledger architecture

The most damaging point in the allegations is that user assets within the Hyperliquid system are $362 million less than the on-chain reserves, implying that it operates as a partially reserved “on-chain FTX.” The skeptics' auditing logic is: Hyperliquid reserves = USDC balance on the Arbitrum cross-chain bridge. According to this logic, the balance at the cross-chain bridge address is indeed less than the total user deposits.

However, upon verification, this is a misreading of information caused by “architecture upgrade” leading to information asymmetry. Hyperliquid is evolving from an “L2 AppChain” to an “independent L1”, and asset reserves are transitioning into a dual-track system. The accusers completely overlook the native USDC on HyperEVM. According to on-chain data (as of the time of writing):

Arbitrum Cross-Chain Balance: 3.989 billion USDC

HyperEVM Native Balance: 362 million USDC

HyperEVM contract balance: 0.59 million USDC

Total solvency = 3.989 billion + 362 million + 59 million ≈ 4.351 billion USDC, this figure matches exactly with the total user balance on HyperCore. The so-called “362 million gap” is precisely the native assets that have been migrated to HyperEVM. This does not mean that the funds have disappeared, but rather that the funds are moving between different ledgers, and the auditing methodology has not kept pace with the evolution of the architecture.

9 Charges Checked One by One: Which Were Clarified? Which Were Avoided?

(Source: Hyperliquid)

Completely Clarified Allegations

“CoreWriter” God Mode: The official explanation states that this is the interface for interaction between L1 and HyperEVM (such as staking), with restricted permissions and no ability to misappropriate funds.

Unpublished Lending Agreement: The spot/lending feature (HIP-1) document has been made public and is in the pre-release stage, operating non-secretively.

Acknowledged but with reasonable explanation of the accusation

Modification of trading volume code exists: Acknowledges the residual code on the testnet (TestnetSetYesterdayUserVlm), but the mainnet nodes have physically isolated that path.

Only 8 broadcast addresses can submit transactions: Acknowledged. Explained as a measure against MEV (maximum extractable value), with a commitment to implement a multi-proposer mechanism in the future.

Oracle prices can be instantly covered: This is explained as a design for system security, allowing for timely liquidation of bad debts during extreme volatility.

Responding to Missing or Ambiguous Accusations

Governance proposals cannot be queried: The official has not responded directly. Users can only see the voting results and cannot view the specific content of the proposals; governance remains a “black box.”

Cross-chain Bridge No Escape Pod: No rebuttal to this structural fact. User assets' entry and exit highly rely on the validators' release, lacking the censorship-resistant withdrawal capability of L2 Rollup.

This “selective response” strategy indicates that Hyperliquid has strong confidence in the security of funds, but it still leaves some intriguing “gaps” in certain sensitive areas of decentralization.

Rare 'pump and dump' against competitors: The battle for transparency escalates

(Source: DefiLlama)

The most interesting aspect of this incident is that it forced Hyperliquid to reveal its cards, and rarely aimed its guns at Lighter, Aster, and even Binance. The official statement bluntly stated: “Lighter uses a single centralized sequencer, and both the execution logic and ZK circuits are not public. Aster uses centralized matching to provide dark pool trading.” Hyperliquid emphasized that on these platforms, aside from the sequencer operators, no one can see the complete state snapshot.

According to DefiLlama's data from the past 30 days, the market landscape is a three-way standoff: Lighter's trading volume is $232.3 billion (26.6%), Aster's trading volume is $195.5 billion (22.3%), and Hyperliquid's trading volume is $182.0 billion (20.8%). In the face of the rising trading volumes of Lighter and Aster, Hyperliquid attempts to play the “transparency” card—“Even though I have 8 centralized broadcasting addresses, my entire state is on-chain verifiable; while you can't even check.”

It is worth noting that although Hyperliquid slightly lags behind the top two in terms of trading volume, it shows a crushing advantage in open interest (OI). This “pump and dump” may be due to concerns about market share, strengthening the brand advantage of “full-state on-chain” through a comparison of competitive product structures.

Former employee short-selling rumors and token compliance

In addition to technical and funding issues, the community is most concerned about recent rumors that the HYPE token may have been short-sold by an “insider.” The Hyperliquid team responded for the first time on Discord, stating that the short-selling address starting with 0x7ae4 belongs to a former employee who was dismissed in early 2024, and that individual's trading behavior is unrelated to the current team. The platform emphasizes that extremely strict HYPE trading restrictions and compliance checks are implemented for all current employees and contractors.

This response attempts to downgrade the “team wrongdoing” accusation to a “former employee's personal behavior,” but the community may still expect more detailed disclosures regarding the transparency of the token distribution and unlocking mechanisms. This “segmentation” strategy may temporarily quell doubts, but it also exposes potential flaws in the early team's management and token allocation.

The Ultimate Proposition Behind Crisis Public Relations

Hyperliquid's clarification this time can be described as textbook-level crisis public relations - relying not on emotional output but on data, code connections, and structural logic. It did not stop at proving its innocence but instead took the initiative by reinforcing its advantages through comparisons with competitors' structures. Although the FUD has been debunked, this incident has left profound reflections in the industry. As DeFi protocols evolve towards independent application chains, the architecture becomes increasingly complex, and asset distribution becomes more decentralized, the traditional method of “checking the contract balance at a glance” has become ineffective.

For Hyperliquid, proving that “money is there” is just the first step. How to gradually transfer the authority of those 8 submission addresses while maintaining high performance and MEV resistance, truly achieving the leap from “transparent centralization” to “transparent decentralization,” is the necessary path to the “ultimate DEX.” And for users, this incident once again confirms the iron law of the crypto world: do not trust any narrative, verify every byte.