Hyperliquid Reimurses $1.99M After Unexpected API Outage
A significant API outage affecting Hyperliquid operations lasted approximately 37 minutes, leading the exchange to voluntarily reimburse nearly $2 million to impacted users.
Technical Glitch, Voluntary Repayment
The outage occurred last Tuesday following a “significant spike in traffic,” a common but often system-stressful situation for platforms experiencing rapid growth. According to Hyperliquid’s internal monitoring, API servers struggled to handle the increased load between 14:10-14:47 UTC on July 29.
Error responses were generated despite user orders being accepted and relayed to the mempool for processing.
Platform Action
Recognizing affected users, Hyperliquid initiated a full reimbursement program. As a result, $1.99 million in USDC stablecoins was distributed to eligible users this Monday.
User Response and Praise
Many users expressed strong approval of Hyperliquid’s proactive approach. “Over $1.5m has already been sent out to users (can confirm),” one trader commented via a social platform, adding that significant repayment was perceived as “incredible considering they have no legal obligation, no contract or SLA to do this.”
Security Considerations
Though not classified as a security breach or exploited vulnerability, the incident occurred against a backdrop of previous security concerns for Hyperliquid. The platform was previously hacked in March for $6.26 million due to a flaw in its liquidation parameters involving the JELLY memecoin contract.
In the current reimbursement process, a notable detail is the implementation of a Know Your Customer (KYC) requirement for returns exceeding $10,000. Most users below this threshold received full repayment, while those affected financially above this level received $9,999 upfront and are being asked to complete verification subsequently.
Market Position
Despite its late March security incident, Hyperliquid has consistently grown and leveraged decentralized exchange capabilities to reach the seventh-largest position in global derivatives trading by volume, with $10.6 billion in 24-hour open interest according to CoinGecko data – a significant climb from its 12th position just two months prior.
