On Thursday, liquidations tied to gold and silver surged on the Hyperliquid platform, coinciding with significant market volatility. While Bitcoin led the charge with $121 million in liquidations, precious metals also faced considerable pressure, with gold and silver experiencing a combined total of $71 million in forcibly closed positions.
This spike in liquidations can be attributed to a dramatic 12% fluctuation in silver prices, which dipped as low as $106 per ounce before recovering to around $116. The trading activity on Hyperliquid demonstrated traders” growing willingness to engage with real-world assets (RWAs), especially following an upgrade earlier this month that allowed third-party developers to list additional trading pairs, including commodities and equities.
Approximately 3,200 users on Hyperliquid faced liquidations while trading futures linked to precious metals, which are facilitated by TradeXYZ, a decentralized exchange (DEX) specializing in tokenized assets. In order to introduce new markets, third-party developers must stake HYPE tokens.
Once predominantly associated with leveraged trading of meme coins, Hyperliquid has evolved into a major player in the decentralized finance (DeFi) space, driven by demand for RWAs. Sam Ruskin, an analyst from Messari, noted that the interest in silver on Hyperliquid has been remarkable. He expressed hopes for sustained demand in less volatile conditions while acknowledging the platform”s ability to capture market movements effectively.
As trading volume surged, markets focused on precious metals generated $1.6 billion over the past day on Hyperliquid. This figure, although lower than the $6.5 billion recorded for Bitcoin, outperformed gold, which only reached $553 million.
On Wall Street, exchange-traded funds (ETFs) tracking silver and gold were on track for record trading volumes, with $25 billion for silver and $20 billion for gold by early afternoon, according to Eric Balchunas, a senior ETF analyst at Bloomberg.
In terms of platform performance, Hyperliquid”s native token saw a remarkable increase of 50% to $32.83, outshining much of the broader cryptocurrency market amid Bitcoin”s recent decline. The platform”s token-burning mechanism, which automatically removes collected HYPE tokens from circulation, is designed to enhance the asset”s scarcity. This month alone, Hyperliquid generated $62 million in fees, a decrease from the $145 million seen in August.
Overall, the recent surge in liquidations reflects an evolving landscape where traders are increasingly exposed to the volatility of RWAs, highlighting the growing integration of traditional assets within the DeFi ecosystem.
