Hyperliquid has firmly rejected allegations claiming a $362 million risk regarding its financial stability, asserting that its platform is fully solvent. The decentralized exchange (DEX) emphasized that its on-chain assets exceed $4.3 billion, with all user funds appropriately managed. This statement follows a widely circulated article that questioned the financial integrity and transparency of one of the largest on-chain derivatives venues, which boasts over $4.1 billion in total value locked (TVL), according to DefiLlama.
In a response shared on X on December 22, Hyperliquid clarified that the insolvency claim originated from an accounting mistake rather than a genuine shortfall. The protocol explained that the author of the piece neglected to account for native HyperEVM USDC balances, which operate alongside the Arbitrum bridge. When these balances are included, the total USDC on HyperCore amounts to $4.351 billion.
The team stated, “The Hyperliquid blockchain state is fully and verifiably solvent,” adding that “every dollar is accounted for” and inviting anyone to verify balances by running a node and examining on-chain data. Additionally, Hyperliquid refuted claims of retroactive volume manipulation, clarifying that the functions cited by critics exist solely on the testnet and serve to stress-test fee logic.
“Testnet-only features that enable more rigorous testing of edge cases do not undermine the chain”s integrity,” it noted. The protocol further addressed concerns regarding alleged “god mode” privileges, risks associated with oracle control, and purported liquidation cartels. It explained that its architecture is misunderstood, stating that CoreWriter cannot create tokens or move user funds without proper approval, and the pricing for validator-run perpetual contracts is derived from an average of major exchanges.
Moreover, Hyperliquid pointed out that liquidation support is provided by a community-owned liquidity pool that is accessible to everyone, ensuring transparency. “Every order, trade, and liquidation is available in real time during execution,” the team added, reinforcing that the DEX”s fully on-chain design provides stronger guarantees compared to competing perpetual venues with centralized sequencers.
As Hyperliquid defends its fundamentals, it faces price pressure on its native token, HYPE. Following a peak near $59 in mid-September, the token has seen a drastic decline, trading around $25 at the time of writing, marking a drop of approximately 24% over the past month and around 60% from its all-time high.
Significant supply-side developments have also emerged, with the Hyper Foundation proposing a validator vote to permanently burn about 37 million HYPE tokens, which constitutes roughly 10% of the circulating supply currently held in its Assistance Fund. If the proposal is approved, nearly $1 billion worth of tokens would be taken out of circulation. Validators are set to decide on this proposal by December 24. However, this deflationary action coincides with an impending unlock of 9.92 million HYPE tokens scheduled for December 29, which may place additional selling pressure on the asset.
