A memecoin exploit forced Hyperliquid to intervene — delisting a memecoin and overriding prices to protect its flagship vault. The protocol survived, but in doing so, revealed the power dynamics beneath its validator set. Decentralization wasn’t broken. It was exposed. And the pretense of neutrality may have been the primary casualty.

Web3 fundraising down:

Total venture funding in crypto fundraises has unsurprisingly fallen short of its bullish highs in 2021/2022. Based on data from Decentralised.co, total funding was $1.4 billion in Q1 2025 and $6.2 billion in 2024.

That’s a dramatic drop from $8.9 billion in Q1 2022 alone, fueled no doubt by raises in the NFT sector that have failed to deliver gains to investors.

However, the median amount fundraised in pre-seed and seed-stage firms has risen to all time-highs across 2024 and 2025. 

— Donovan Choy

If you’re a builder, this is your moment.

Permissionless IV is calling founders, devs, and innovators to take the stage and push the space forward. No fluff — just the people writing the next chapter of crypto.

🚀 Speaker applications are open. If you're shipping real product, take the mic.

🛠 Hackathon locked & loaded. $100K+ in bounties. No distractions — just execution.

Brooklyn. Summer. Real builders only.

📅 June 22–26 | Brooklyn, NY

Hyperliquid breaks the glass

Yesterday, Hyperliquid — the onchain perps DEX standard-bearer — faced arguably an existential stress test.

A trader opened an $8 million short on JELLYJELLY, a low-cap memecoin, then pumped its onchain price, triggering a liquidation cascade that dumped the position onto Hyperliquid’s communal risk vault, HLP. As JELLYJELLY soared, the vault bled: At peak, onchain watchers tracked over $10 million in unrealized losses.

Then, Hyperliquid made its move. Validators delisted the market and forcibly settled all JELLYJELLY perp positions at $0.0095 — the entry price of the attacker’s short. The vault was magically spared. In fact, it booked a $700k profit.

But in the process of breaking the glass to yank the emergency brakes, the protocol seems to have shattered any illusions about one of its core aspirations: decentralization.

The key takeaway wasn’t that Hyperliquid acted — it’s what that action revealed. The validator set not only delisted the asset but set the price at which all open positions were forcibly closed. This was more than an oracle tweak — it was an override of the market. And one that benefited the protocol’s own balance sheet.

In effect, Hyperliquid demonstrated what Galois Capital dubbed a “validator put” — an implicit backstop where if losses to the HLP vault grow too large, the protocol will intervene to cap them. That changes the nature of the game. HLP becomes an asymmetric bet: full upside during normal operation, downside protection when markets go wild. It’s attractive for stakers, but dangerous for everyone else — including external market makers, who now know they’re competing with an entity that doesn’t always play by known rules.

And that’s the second break: the illusion of neutrality. While Hyperliquid claims the delisting was a validator vote — and some validators did confirm quorum was reached — the governance set is top heavy. More than half the stake belongs to five “Hyper Foundation” validators. Whether it’s Jeff or the foundation, the practical result is the same: Core protocol actors made a discretionary call to save protocol capital.

Critics like Hasu, ZachXBT and Wintermute’s Evgeny Gaevoy weren’t subtle: You can’t claim to be a DEX and then override prices when it suits you. Others drew parallels to FTX and Alameda, pointing out that Hyperliquid’s internal liquidity engine (HLP) now acts as both market participant and protocol beneficiary — with all the risk of favoritism and opaque intervention implied.

Managing director of Bitget Gracy Chen was quick to denounce Hyperliquid’s handling of the incident — calling it “immature, unethical and unprofessional.” But the critique rang hollow for those who remembered that just last year, Hyperliquid founder Jeff Yan publicly accused Bitget of dishonest matching — alleging it didn’t route user trades to the open market, but rather through an internal trading desk.

This practice, known as B-booking — or profiting when users lose — is “unequivocally unethical,” Jeff wrote in 2023, and “probably illegal in any jurisdiction.” So we have a Bitget exec framing that exchange as a paragon of transparency while calling out a rival for discretionary intervention. The pot may be calling the kettle opaque.

Meanwhile, Binance and OKX were listing JELLYJELLY perps mid-crisis, pouring fuel on the fire and capitalizing on the volatility in a way that may have forced Hyperliquid’s hand.

There’s no question the system held up. Hyperliquid users weren’t rugged, but rather defended from loss. The cost was clarity: Is Hyperliquid a rules-based DEX, or a discretionary platform with validator-administered emergency powers?

Decentralization doesn’t fail in moments like this — it’s revealed. And what Hyperliquid has shown is that it can, and will, act to protect itself first. That may be rational — maybe even necessary. But let’s not pretend it’s neutral.

— Macauley Peterson

Is pump.fun’s peak behind us?

Did pump.fun activity peak?

Boccaccio: Pump.fun’s memecoin structure will not come back in the form that it’s at right now. I believe it’s too extractive today. Memecoins won’t die, but there will be a material shift in the form and dynamics [compared to what] exists today.

Ryan Connor: Pump.fun is objectively the most successful product in the history of crypto from a revenue perspective. Based on what I see in US gambling markets, I think there’s staying power for an app like pump.fun. It’s like Barstool Sports — the whole shtick is that we are all so bad at gambling and we all make fun of each other. But that is the biggest capital market with the most disposable income. I wouldn’t bet against it.

Is Aave fumbling its lead?

Boccaccio: Aave spent two years building out a SocialFi platform (Lens) on Polygon, [it] did some weird corporate restructuring and now [it’s] launching Horizon, an institutional product. It should’ve spent time launching on Solana because that’s a lot of money [it] missed out on and gave to Kamino. Why is Aave launching on Aptos instead?

Ryan Connor: There are a ton of incumbents that deny [being] a useful money making entity…and that they need to behave like a company and defend their moats. Some of these teams’ governance structures are fraught with conflicts of interest. Perhaps Aave is an example there. It’ll be interesting to see. As an investor, you want to identify the teams that are taking it seriously at this very moment — and separate them from the teams that are not — as an influx of capital comes in.