Hyperliquid’s Hyperdrive Protocol Exploited in $700K Security Breach

Hyperliquid, a rising star in decentralized finance, faces mounting scrutiny after its flagship yield protocol Hyperdrive was exploited for $700,000. The attack marks the second major security incident in 48 hours across Hyperliquid's ecosystem.

Attackers exploited a critical flaw in operator permissions, using Hyperdrive's Router to manipulate Treasury Market positions. While developers confirm the protocol's native HYPED token remains unaffected, the breach has forced a temporary shutdown of all money markets.

The incident follows a $3.6 million exploit on HyperVault, another Hyperliquid-based protocol, with stolen funds laundered through Tornado Cash. These consecutive breaches raise fundamental questions about security architecture in emerging DeFi ecosystems.