SKHX Flash Crash Breaches Hyperliquid Backstop Liquidator, Forcing $26 Million Liquidation

July 28, according to Hyperinsight monitoring, this morning at 7:00 AM when the Korean pre-market trading started, on Hyperliquid, SKHX rapidly dropped from $1128.2 to $927 within a minute, marking a maximum 17.8% decline;

At the time of writing, SKHX has rebounded to $1097.9, a recovery of 18.4% from the low point, with a 24-hour trading volume of $891 million.

This anomaly is widely attributed to an oracle capturing extreme transaction prices during the Korean pre-market's low liquidity period. However, as of the time of writing, the incident has not been officially classified as a technical malfunction. More precisely, the SKHX oracle synchronized with the unusually low price in the Korean NXT pre-market, which then propagated to the reference price, triggering a cascade of liquidations.

According to trade.xyz rules, the SKHX oracle price is calculated by dividing the SK Hynix Korean stock price by the USD to KRW exchange rate and accessing external executable quotes during the Korean pre-market period.

During the liquidation frenzy, the on-chain backup liquidation account with address 0x400…0001 took over 406 addresses' SKHX long positions at 7:00 AM, totaling approximately 27,100 units, with an average takeover price of around $969, a nominal value of about $26.26 million, resulting in a realized loss of about $1.001 million.

As the SKHX price continued to plummet, this backup liquidation account, originally responsible for absorbing user risk, was also subject to a reverse liquidation. In this event, the risk did not stop after being transferred but continued to be transmitted to the backup liquidation account.

Compared to yesterday's afternoon snapshot, the outstanding SKHX contracts decreased from 410,700 units to 353,600 units, a reduction of approximately 13.9%; if calculated at the reference price, the nominal contract value decreased from around $508 million to $388 million, a decrease of about 23.5%.

Address: 0x4000000000000000000000000000000000000001