HyperLiquid Refunds Traders After API Glitch Causes Market Disruptions

HyperLiquid, a decentralized trading platform, faced a critical API overload on July 29 during peak trading hours. Between 14:10 and 14:47 UTC, surging traffic caused system delays, leaving traders with unconfirmed orders and erroneous error messages. Positions were executed without user awareness, leading to unintended losses and inflated funding fees.

The exchange moved swiftly to address the fallout, issuing refunds to affected users—covering both trading losses and abnormal funding costs. This rare compensation strategy has sparked debate within crypto circles, balancing reputational damage control against concerns about moral hazard.

Technical transparency remains a challenge for decentralized platforms during infrastructure failures. The incident highlights the tension between blockchain's Immutable executions and the need for user-facing reliability—particularly when real money hangs in the balance.