POPCAT Token Manipulation on Hyperliquid: $4.9 Million Lost in Orchestrated Attack
- How Did the POPCAT Token Manipulation Unfold?
- What Triggered the Cascade of Liquidations?
- Why Would an Attacker Intentionally Lose $3 Million?
- How Does This Compare to Previous Hyperliquid Incidents?
- What Does This Mean for DeFi Security?
- Could This Impact Hyperliquid's Market Position?
- What Should Traders Learn From This Incident?
- How Are Other Exchanges Responding?
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In what appears to be a carefully planned market manipulation scheme, Hyperliquid - a leading decentralized perpetual contracts platform - suffered a $4.9 million loss through the artificial inflation and subsequent crash of the POPCAT token. The attacker used 19 separate wallets to execute this sophisticated operation, demonstrating the evolving challenges in DeFi security. This incident follows a similar $46 million exploit on Hyperliquid's XPL pre-market just months earlier, raising questions about platform safeguards.
How Did the POPCAT Token Manipulation Unfold?
The attack began when an unknown entity transferred $3 million in USDC from OKX to Hyperliquid. These funds were strategically distributed across multiple wallets to open Leveraged long positions totaling nearly $30 million on POPCAT. The attacker then placed a massive $20 million buy order at approximately $0.21, creating artificial demand that drove the token's price upward.
What Triggered the Cascade of Liquidations?
At the peak of the artificially inflated price, the attacker suddenly withdrew their buy order, causing POPCAT's value to plummet. This abrupt price drop triggered automatic liquidations of leveraged positions across the platform. While the attacker lost their initial $3 million investment, the damage to Hyperliquid's ecosystem was far greater - leaving its Hyperliquidity Provider (HLP) pool with $4.9 million in unrecoverable debt.
Why Would an Attacker Intentionally Lose $3 Million?
This appears to be a calculated sacrifice. By accepting a $3 million loss, the attacker created a much larger $4.9 million deficit in Hyperliquid's community liquidity pool. Some analysts speculate this could be part of a broader strategy to weaken confidence in the platform, especially following its recent high-profile stablecoin launch and growing competition in the perpetual DEX space.
How Does This Compare to Previous Hyperliquid Incidents?
Just three months prior in August 2025, Hyperliquid experienced a similar $46 million exploit involving the XPL token pre-market. That attack resulted in $17 million in simultaneous liquidations. The repeating pattern suggests that Hyperliquid's rapid growth (with Cathie Wood comparing it to "Solana's early days") may be outpacing its security infrastructure.
What Does This Mean for DeFi Security?
These sophisticated attacks highlight the vulnerabilities in decentralized finance protocols, particularly around leveraged trading and liquidity pools. While platforms like dYdX and BTCC have implemented various safeguards, Hyperliquid's consecutive incidents demonstrate how attackers are evolving their methods to exploit DeFi mechanisms.
Could This Impact Hyperliquid's Market Position?
Despite these setbacks, Hyperliquid remains a major player in perpetual DEX trading. However, repeated security incidents could affect user confidence and adoption rates. The platform's response to this latest attack - whether through improved safeguards or compensation measures - will likely determine its ability to maintain its leading position.
What Should Traders Learn From This Incident?
Traders should be particularly cautious with leveraged positions on lower-market-cap tokens, especially during periods of unusual price action. Diversifying across platforms and using risk management tools can help mitigate exposure to such manipulation schemes.
How Are Other Exchanges Responding?
Following this incident, several major exchanges including BTCC have reportedly increased monitoring for suspicious wallet activity and large coordinated orders. Some are considering implementing additional circuit breakers or leverage limits for smaller-cap assets.
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What was the total loss in the Hyperliquid POPCAT attack?
The attack resulted in $4.9 million in unrecoverable debt for Hyperliquid's HLP pool, while the attacker intentionally lost $3 million of their own funds to execute the manipulation.
How many wallets were used in the attack?
The attacker distributed funds across 19 separate wallets to open leveraged positions and execute the manipulation strategy.
What was the peak buy order that inflated POPCAT's price?
The attacker placed a $20 million buy order at approximately $0.21 to artificially drive up POPCAT's price before suddenly withdrawing it.
