Hyperliquid Terminates Jelly Contract Amid Market Controversy

2 mins mins

Key Points:

Hyperliquid delists Jelly contract following market activity scrutiny.
24-hour P&L hit nearly 700,000 USDC.
Community questions decentralization claims post-decision.

Hyperliquid has removed its JELLY perpetual contract after identifying unusual market activities, with the decision reached by its validator committee. The announcement was made on platform X, signaling expected user reimbursements.

The delisting reflects concerns over market integrity. Reacting swiftly, the committee decided to secure user assets and maintain trust.

Hyperliquid’s $700K P&L Fluctuation and User Compensation

The decision to eliminate the JELLY contract arose from discovered unusual activities in the marketplace, prompting Hyperliquid’s validator committee to act. This move follows previous incidents emphasizing the need for system robustness. Hyperliquid’s focus now shifts to transparency and improving its voting system’s reliability.

Immediate changes sent ripples through the market, with Hyperliquid experiencing a profit and loss fluctuation of approximately 700,000 USDC within a day. The platform assured users of compensation from its foundation, relying on chain data accuracy.

Community reactions were charged, with commentators challenging Hyperliquid’s decentralization stance. Industry figures like Arthur Hayes criticized transparency while Andre Cronje suggested alternative leveraging strategies. On-chain investigator ZachXBT highlighted concerns over price manipulations.

Arthur Hayes, Co-founder, BitMEX, remarked, “Let’s stop pretending hyperliquid is decentralised And then stop pretending traders actually give a fuck Bet you $HYPE is back where it started in short order cause degens gonna degen.”

Historical Events Mirror Current Challenges

Did you know? Hyperliquid faced a similar crisis on March 12, 2025, involving an Ether liquidation incident, emphasizing the cyclical nature of market challenges.

According to CoinMarketCap, Jelly (JELLY) has a fully diluted market cap of $1.76 million, with noticeable price volatility over the last 90 days, declining by 70.32%. Its current absence from circulation is causing concern about liquidity.

jelly-daily-chart-2 — Jelly(JELLY), daily chart, screenshot on CoinMarketCap at 18:30 UTC on December 14, 2022. *Source: CoinMarketCap*

Coincu research suggests potential effects on Jelly’s technological and regulatory frameworks, influenced by Hyperliquid’s operational adjustments. The platform may reconsider leverage models, addressing liquidity and volatility to foster industry stability.