Bobby’s Crypto Aggregate (Mar 2025): Hyperliquid Under Attack from CEXes & Trump’s SBR

GM frens,

The market continues to be at the mercy of Trump and his tariff plans, but is there going to be light at the end of the tunnel? This month I discuss the recent exploits targeting Hyperliquid, and Trump’s announcement of the US Strategic Bitcoin Reserve. 

1. Hyperliquid Survives Attack from Exploiters and CEXes

Unless you haven’t been paying attention to DeFi the last 12 months, chances are you would have heard of Hyperliquid, currently the most popular Perpetuals DEX by far, which has now grown in volume and open interest to rival some of the largest Perpetual CEXes. 

The protocol’s meteoric rise has also inadvertently attracted the attention of exploiters, with two attacks in rapid succession this month, both targeting the same liquidation mechanism. In both instances, the attacker opened large leverage positions, then withdrew their collateral, causing their position to be liquidated and the bad debt transferred over to Hyperliquid’s community market maker pool, HLP. The attacker profited from the liquidation by taking the inverse position on a different exchange.

While the first attack utilized Hyperliquid’s $ETH perpetual contract, the second was more egregious in essentially manipulating the price of the protocol’s $JELLYJELLY contract after opening a large short position, leaving HLP with an unrealized loss of $13.5M. In response, Hyperliquid validators took the unprecedented step to pause trading and delist the $JELLYJELLY perps, while also fixing its own oracle to settle outstanding $JELLYJELLY contracts at an arbitrary price, netting HLP a $700,000 gain instead. 

What was also notable was that, in the midst of the attacker driving up the price of $JELLYJELLY to liquidate itself, Binance and OKX quickly listed $JELLYJELLY perps on their respective exchanges - drawing accusations of coordinating an attack against Hyperliquid in an attempt to kill a competitor.

Hyperliquid team’s response predictably drew criticism - after all a protocol that can arbitrarily reset oracle prices to settle contracts and pause markets in its favor, can hardly claim to be “decentralized”. Some also questioned why the protocol only paused markets when it was about to suffer a loss, but not when North Korean hackers were laundering funds through the protocol.

However, looking beyond the decentralization veneer, it’s arguable whether users actually care. While the protocol has seen some capital outflows since the attack, and its $HYPE token has lost ~24% of value, trading activity on the protocol largely continues unabated, with only a very slight dip in open interest. Hyperliquid built its reputation and userbase on the back of being cheap, fast, and easy to use - and these seem to have allowed it weather these recent attacks. A generous airdrop in the past likely also helped win users’ loyalty. It’s precisely this recipe that has spooked centralized exchanges. 

Following its meteoric rise in 2024, Hyperliquid is now the 8th largest perpetuals exchange by volume in 2025 Q1 across both CEXes and DEXes, ahead of some notable OGs such as HTX, Kraken and BitMEX. CEXes have definitely been feeling the heat, particularly as perpetuals are where they derive most of their revenue (perpetual markets were >3x larger than spot markets in 2024). Hyperliquid has become their main on-chain perps competitor, just as Uniswap and Jupiter are their main competitors in spot. 

Binance’s and OKX’s move to list $JELLYJELLY perps during the Hyperliquid attack felt like a direct salvo against a rising competitor. While all is fair in love and war, these moves definitely felt more like kicking someone when they’re down, a stark contrast to what occurred just a month ago when Bybit was hacked. It’s a clear indication that CEXes are definitely feeling threatened by DEXes, and are not going to see their market share erode without making antagonistic moves of their own. 

On the other hand, DEXes are not going to back down without a fight, and Hyperliquid’s success has shown that it is possible for DEXes to compete and take a sizable share of the pie. As the team continues to refine their mechanics, the ultimate challenge remains how to lure larger pools of capital away from CEXes to on-chain. At long last after 2020’s DeFi Summer, we’re finally seeing DEXes challenge CEXes, and the future battles are going to be exciting to witness. 

2. Trump’s Strategic Bitcoin Reserve

On March 6, 2025, President Trump signed Executive Order 14233, formally establishing a US Federal Strategic Bitcoin Reserve, capitalized by existing bitcoin held by the Treasury Department, largely from forfeitures from civil and criminal cases. While this by itself would have been a highly anticipated bullish announcement for the industry, the market instead sold off in the aftermath, largely due to grossly inflated expectations of what it could have been.

Why? Well firstly Trump shot himself in the foot by posting about a five asset (BTC, ETH, SOL, XRP, ADA) reserve on Truth Social a few days before the actual EO was signed, raising hopes of a vastly expanded stockpile. Secondly some commentators were hopeful that the US Government would actually actively acquire more crypto to supplement its existing stockpile. These hopes were subsequently dashed when the official EO was unveiled. 

In reality, any rational person would be able to see that these were nothing more than wild hopium - the US Federal Government is staring down $36.2 trillion in national debt, and Trump has made reducing the deficit a key feature of his platform this term. There was no way that he would be able to obtain approval from Congress to expand additional government funds to acquire crypto, and this restriction is explicitly written into the EO, where any strategies for acquiring more Government BTC needs to be “budget neutral and do not impose incremental costs on United States taxpayers”. 

But lost in the market sell-off is how monumental this announcement is for the future of our industry. We are all aware that with government and regulatory matters, changes tend to take place incrementally, and this reserve represents a beach head for all future moves the US may make, as it aligns the economic interest of the US Government with the crypto industry, however strange that may sound to OGs. 

With Trump also tearing up the old post-Bretton Woods II global monetary order, a new regime is set to emerge, and who knows how big a role bitcoin and crypto could play in this new order. In a wild future, we could very well see bitcoin serving as a major global reserve currency, with nation states trading with each other using bitcoin, and historians would perhaps look back at this moment as the first time a global superpower established a bitcoin reserve.

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