Hyperliquid denies risk claims of $362 million and says the platform is fully solvent

The DEX said all user funds are fully solvent and verifiable, and urged critics to run a node and check balances directly on the blockchain.

Hyperliquid has denied claims that the protocol has insufficient collateral, stating that assets on the chain exceed $4.3 billion and that all user funds are well managed.

The detailed rebuttal comes after a widely shared article questioned the financial integrity and transparency of one of crypto’s largest on-chain derivatives platforms, which has more than $4.1 billion in total value (TVL), according to DefiLlama.

Point-by-point refutation of accusations

Hyperliquid’s response, posted to The protocol explained that the author of the article in question failed to include the original HyperEVM USDC balances, which run along the Arbitrum Bridge. When both are included, Hyperliquid says the total USDC on HyperCore is $4.351 billion.

“The Hyperliquid blockchain status is fully and verifiably solvent,” the team wrote, adding that “every dollar is accounted for” and anyone can independently confirm balances by running a node and checking on-chain data. The protocol also rejected claims of volume manipulation retroactively, saying that the mentioned functions only exist on testnet and are used for stress testing of the compensation logic.

“Features only available on Testnet that enable more rigorous testing of edge cases do not undermine the integrity of the chain,” the report said.

It also noted that these code paths are unreachable on the mainnet and will be removed completely to avoid confusion. Other accusations related to supposed ‘god mode’ privileges, oracle control risks, liquidation cartels, hidden credit activities and the ability to freeze the chain through governance.

However, Hyperliquid said these points reflected misunderstandings about the architecture. For example, it was explained that CoreWriter cannot create tokens or transfer user funds without approval, that prices for validator-managed offenders come from an average of major exchanges, and that liquidation support is managed by a community-owned liquidity pool that anyone can access.

“Every order, trade and liquidation is available in real time during execution,” the team said.

They also argued that the decentralized exchange’s fully on-chain design provides stronger guarantees than competing perpetrator venues with centralized sequencers.

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Price pressure amid large supply proposals

Hyperliquid’s defense of its fundamentals comes during a volatile period for its own HYPE token. After reaching an all-time high of almost $59 in mid-September, the asset fell dramatically and at the time of writing was trading around $25, representing a decline of around 24% over the past month and around 60% from its peak.

Meanwhile, there have been significant developments on the supply side, with the Hyper Foundation proposing a validator vote to permanently burn approximately 37 million HYPE tokens, which is approximately 10% of the circulating supply and currently held in its Assistance Fund.

If approved, nearly $1 billion worth of tokens would be removed from the offering. Validators will decide on the proposal on December 24. However, this deflationary move is set against an upcoming token unlock of 9.92 million HYPE scheduled for December 29, which could cause further selling pressure.