Seven Wallets Run a $2.78M Pump-and-Extract on XPL's Thin Perp Book

The Playbook

Seven accounts deposited a combined $1.85 million in USDC to Hyperliquid, opened leveraged long positions on the XPL perpetual, and pushed price from roughly $0.12 to $0.167 — a 42% move. Then all seven withdrew $4.63 million simultaneously, pocketing $2.78 million on a ~150% return in what amounted to minutes of active execution.

The mechanics are straightforward: XPL's perp book carries sub-$200K in open interest on a normal day. Any concentrated directional flow reprices the entire market. The seven wallets used that thinness as a lever — their $1.85 million in longs was overwhelming force relative to available liquidity, triggering cascading short liquidations that amplified the pump far beyond what their capital alone would have produced.

Arkham Intelligence tagged the operation and flagged the synchronized timing across all seven accounts — same deposit window, same exit window. The group also ran a smaller version of the same play on Aster, another low-float HIP-3 token, netting an additional $324,000.

The HLP Withdrawal That Preceded It

One detail elevates this from opportunistic to premeditated. A wallet identified by Arkham (0xe2f1e9C58F7fC813d0B6cE25C560bc6c68778386) withdrew funds from Hyperliquid's HLP pool immediately before the manipulation began. The withdrawal thinned the pool's available liquidity — the same pool that would go on to absorb roughly $600,000 in losses when the scheme unwound.

Whether this wallet is directly connected to the seven trading accounts or simply had advance knowledge is unconfirmed. But the timing is hard to dismiss: withdraw from HLP, reducing the backstop's capacity to absorb disorderly liquidations, then trigger exactly the kind of liquidation cascade that overwhelms a diminished backstop.

On-chain records show the wallet held roughly $112K at the time of reporting, split between wrapped Ethereum and stablecoins, with recent movements across Aave on Arbitrum — consistent with someone cycling capital across DeFi protocols rather than passively providing liquidity.

XPL's Repeat Vulnerability

This is the second major coordinated extraction on XPL's Hyperliquid perp. In August 2025, a whale pumped XPL 200% from $0.60 to $1.80 in under two minutes by clearing the entire order book with a $16 million leveraged long — an incident that triggered $46 million in liquidations and was initially attributed to Justin Sun before on-chain analysis debunked the claim.

The structural problem is unchanged: XPL's HIP-3 perp has a book thin enough that mid-six-figure positions move the market double digits. Open interest has hovered around $100–110K through the recent sequence. For context, the TWAP buying documented just yesterday — a $2 million order that pushed XPL up 20% — operated on the same dynamic. The difference is that today's actors designed their entry and exit to extract maximum value from the liquidation cascade rather than to accumulate a position.

The $600K HLP loss is manageable relative to the pool's total capacity, but each successful extraction validates the playbook and invites repetition. Until XPL's perp book deepens materially — or Hyperliquid adjusts risk parameters for ultra-thin markets — this remains a structural vulnerability, not a one-off event.

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