HyperLiquid’s API Glitch Unpacked: Refunds Roll Out But Trust Takes a Hit

Another day, another crypto hiccup—this time HyperLiquid’s API stumbles. Users got their refunds, but skepticism sticks like a bad NFT trade.

Here’s the breakdown:

The Glitch: HyperLiquid’s API went rogue, triggering erroneous transactions. Engineers scrambled—refunds hit wallets within 48 hours. Fast? Sure. Enough? Debatable.

The Fallout: Traders got whole, but confidence cracked. ‘Move fast and break things’ works until it breaks your reputation.

The Irony: A platform built to streamline derivatives tripped over its own code. Maybe next time, test before you deploy? Just a thought.

Closing jab: If this were traditional finance, heads would roll. In crypto? Just another Tuesday—and another ‘learning opportunity’ for your portfolio.

Key takeaways

A surge in API traffic caused delayed order updates on HyperLiquid, leading to user confusion and financial losses. The platform has since refunded affected traders, earning mixed reactions.

A technical glitch during a surge in API traffic left Hyperliquid [HYPE] users confused and out of pocket on 29th of July.

The platform has since issued refunds to affected traders, compensating them for losses and inflated funding rates incurred during the 14:10-14:47 UTC window.

When orders went through but users didn’t know

An unexpected spike in traffic overwhelmed HyperLiquid’s API servers, leading to delayed order updates and widespread user confusion. 

While trades were successfully submitted to the mempool and ultimately confirmed on-chain, the system returned misleading error messages, causing users to believe their transactions had failed.

This disconnect led to real financial consequences, as users unknowingly entered positions they couldn’t track in real-time.

HyperLiquid acknowledged the disruption and began compensating those impacted; particularly users whose trades occurred in that window or who paid unusually high funding fees due to the volatility.

Source: X

The platform’s refund policy is said to have aimed to recreate worst-case exit scenarios to ensure fair redress.

Basic decency or above and beyond?

HyperLiquid’s move to refund users sparked a split reaction across the crypto community. Some applauded the exchange, calling it “world class” and praising its proactive handling of a situation where it had no legal obligation to compensate users.

Others, however, were less impressed; arguing that refunding users after a technical failure should be the bare minimum. One user remarked,

“The fact that the industry thinks this is incredible just shows how disgusting crypto has become.”

Still, even critics agreed on one point: while this gesture was welcome, it has highlighted the need for stronger infrastructure to avoid future issues.

Source: X

Price recovers, but caution lingers

Despite the recent outage controversy, HYPE token is showing signs of mild recovery.

Source: TradingView

At press time, HYPE was trading around $39.39 with a 1.6% daily gain, but technical indicators still suggested a cautious outlook.

The RSI remained below the neutral 50 at 43.32, a sign of lingering bearish momentum. The CMF was negative at -0.20, indicating capital outflows continue.

Price candles also hovered below the Bollinger Band midline, suggesting limited bullish strength.

While the token has bounced off recent lows, the rebound lacks volume and conviction, making it more of a pause than a confirmed reversal.