DeFi's Oracle Oversight Enables Whales to Gain $47.5M While Retail Investors Suffer $7M Losses

On August 27, 2025, four major whale wallets on Hyperliquid collectively earned $47.5 million by driving the price of

, a token issued by the blockchain, up by 200% within a matter of minutes. This dramatic price spike, which saw XPL soar from roughly $0.60 to $1.80, led to a wave of forced liquidations. One trader reported a loss of $4.59 million, while another disclosed a $2.5 million loss from short positions Hyperliquid whales net $48M on 200% XPL rally, amid … [ 1 ]. According to blockchain analytics firm Spot On Chain, wallet 0xb9c played the central role in this scheme, pocketing more than $15 million in profit Hyperliquid whales net $48M on 200% XPL rally, amid … [ 1 ]. The whales took advantage of Hyperliquid’s isolated oracle setup and the absence of position limits, allowing them to clear out the order book and trigger liquidations against opposing traders DeFi Market Manipulation: Analyzing the $XPL Hyperliquid Pump … [ 2 ].

This coordinated manipulation exposed significant weaknesses in decentralized finance (DeFi) protocols that emphasize user growth over risk controls. Hyperliquid’s lack of circuit breakers enabled a $184,000 WETH trade to dramatically distort XPL’s spot price, a scenario less likely on centralized exchanges that use external pricing sources DeFi Market Manipulation: Analyzing the $XPL Hyperliquid Pump … [ 2 ]. While the platform’s decentralized design aims for greater transparency, it also left the system open to exploitation by large players with deep pockets. In response, Hyperliquid implemented new protections, including a 10x cap on mark prices relative to the 8-hour exponential moving average and the use of external market data to help prevent similar incidents DeFi Market Manipulation: Analyzing the $XPL Hyperliquid Pump … [ 2 ]. However, these changes unintentionally created arbitrage opportunities, as XPL prices began to diverge between Hyperliquid and Binance DeFi Market Manipulation: Analyzing the $XPL Hyperliquid Pump … [ 2 ].

Initially, speculation suggested that one of the whale wallets was linked to

founder Justin Sun, but on-chain analyst MLM later withdrew this claim, citing errors in the analysis Hyperliquid whales net $48M on 200% XPL rally, amid … [ 1 ]. The wallet in question had opened large long positions in XPL and closed them in less than a minute, securing $16 million in gains Hyperliquid whales net $48M on 200% XPL rally, amid … [ 1 ]. At the time of the incident, the address still held a 1x leveraged XPL position valued at $8.6 million, with unrealized profits of $614,000 Hyperliquid whales net $48M on 200% XPL rally, amid … [ 1 ]. Despite Hyperliquid’s decentralized philosophy, the episode raised concerns about whether the platform can adequately shield retail traders from aggressive market tactics Four Whales Accused of Manipulating XPL Price, Earning $47.5M … [ 3 ].

The XPL incident is part of a larger pattern of whale-driven exploits in DeFi, following a $6.26 million attack on the JELLY

in March 2025 Hyperliquid whales net $48M on 200% XPL rally, amid … [ 1 ]. Analysts point out that low liquidity in tokens like XPL before their official launch makes them especially vulnerable to manipulation, with whales using leverage to magnify both profits and losses XPL Futures on Hyperliquid See $130M Wiped Out … [ 4 ]. This event highlights the urgent need for stronger governance, including position limits, circuit breakers, and transparent oracle mechanisms to prevent similar attacks DeFi Market Manipulation: Analyzing the $XPL Hyperliquid Pump … [ 2 ]. Retail investors are advised to steer clear of heavy leverage in illiquid markets and to diversify their portfolios to reduce risk XPL Futures on Hyperliquid See $130M Wiped Out … [ 4 ].

Hyperliquid’s reaction to the XPL manipulation has included both preventative and corrective steps. While the platform’s new safeguards are intended to stabilize prices, they have yet to fully restore user trust. This latest manipulation follows a previous exploit in March 2025, raising doubts about Hyperliquid’s ability to uphold market integrity Hyperliquid whales net $48M on 200% XPL rally, amid … [ 1 ]. Although Hyperliquid’s decentralized model is designed to remove counterparty risk, the XPL incident illustrates the difficulty of balancing openness with effective risk controls in highly leveraged environments Four Whales Accused of Manipulating XPL Price, Earning $47.5M … [ 3 ]. The platform’s future reputation and user confidence now depend on its ability to fix systemic flaws without hindering innovation XPL Futures on Hyperliquid See $130M Wiped Out … [ 4 ].

The XPL price manipulation stands as a warning for both DeFi platforms and individual traders. For platforms, it underscores the importance of proactive risk controls, such as external price feeds and liquidity protections, to guard against abuse. For traders, it highlights the need to understand market structure, liquidity conditions, and the dangers of using leverage with new or thinly traded assets XPL Futures on Hyperliquid See $130M Wiped Out … [ 4 ]. As the DeFi sector matures, the tension between decentralization and regulatory oversight will remain a key issue, especially in markets where a few large players can heavily influence price movements DeFi Market Manipulation: Analyzing the $XPL Hyperliquid Pump … [ 2 ].