Hyperdrive Freezes Market Following $1M Exploit - DeFi Protocol Reels From Security Breach

Another day, another DeFi exploit—this time Hyperdrive pulls the emergency brake after a confirmed attack drains nearly seven figures from its protocol.

The Fallout

Hyperdrive's markets sit frozen while developers scramble to contain the damage. The exploit leveraged a vulnerability in the protocol's smart contracts, allowing the attacker to siphon funds directly from liquidity pools.

Security Crisis Mode

Protocol engineers initiated an immediate market freeze upon detecting abnormal transaction patterns. The move prevents further withdrawals but leaves existing liquidity trapped—classic DeFi damage control that always seems to arrive after the horse has bolted.

The Million-Dollar Question

With nearly one million dollars vanished into digital oblivion, Hyperdrive joins the growing list of protocols learning security lessons the expensive way. The incident exposes the persistent gap between theoretical audits and real-world attack vectors.

Just another reminder that in crypto, sometimes the highest yields come with the highest risks—and occasionally, the highest losses. Traditional finance might move slower, but at least their exploits come with FDIC insurance.

Hyperdrive moves to calm exploit rumors

According to posts on X, the exploit is being linked to a flaw in Hyperdrive’s operator permission system. Users had reportedly designated the protocol’s Router as an operator, allowing it broad access to call any whitelisted contract—including the Market contract.

Attackers took advantage of this by invoking the Router to put out arbitrary calls. This gave them access that they used to manipulate and ultimately drain the affected positions.

The incident comes not long after the $3.6 million rug pull by HyperVault, yet another Hyperliquid-based yield protocol, which happened on September 26, 2025.

The irony of the attacks is not lost on crypto natives who are watching keenly and have pointed out how there seems to be an ongoing campaign targeting the Hyperliquid ecosystem.

This year alone, the space has endured a string of security issues, including earlier exploits like the March JELLYJELLY manipulation and the August XPL attack. The attacks have hit community sentiment, somewhat “dampening” Hyperliquid’s hype.

Hyperdrive heist comes one day after HyperVault exploit

On September 26, blockchain security firm PeckShield flagged unusual outflows of about $3.6 million from the decentralized finance platform Hypervault, being bridged from Hyperliquid to Ethereum.

After bridging, the funds were swapped into ETH, and approximately 752 ETH, worth almost $3 million, was deposited into Tornado Cash, a classic sign of crypto rug pulls.

According to Hypervault’s website and documentation, it is responsible for the promotion of  “unmanaged” auto-compounding vaults, keeper-bot harvests, and strategy adapters that route assets to lending, looping, and concentrated liquidity venues on HyperEVM.

It generated revenue by deploying user deposits across external venues via modular strategies.

The project’s X account has now been deleted, and the official website remains inaccessible, raising suspicions of an exit scam.

On X, there is still a lot of confusion and speculation from whales and regular users who are dealing with losses and inquiring about any possibility of recovery.

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