Researcher Criticizes Hyperliquid’s ADL Mechanism After October 10 Crash

Gauntlet’s low-leverage test strategy faced auto-deleveraging during the market drop, prompting a 95-page analysis on alleged exchange system unfairness.

HYPE

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Terms & Concepts
  • Auto-Deleveraging (ADL): A risk management process in crypto exchanges that automatically reduces positions when counterparties' liquidations cannot be absorbed by the market.
  • Leverage: Borrowed capital used to increase the potential return of an investment, amplifying both gains and losses.
  • Hyperliquid: A cryptocurrency exchange platform offering leveraged trading and other digital asset services.