Hyperdrive Hack 2025: Hyperliquid’s DeFi Project Faces Critical Security Alert

What Happened in the Hyperdrive Hack?

On September 28, 2025, attackers exploited a smart contract vulnerability in Hyperliquid’s Hyperdrive, draining an estimated $47 million in user funds. The breach was flagged by blockchain analytics firm PeckShield within 90 minutes of the first suspicious transaction. "This wasn’t just a flash loan attack—it was a systemic failure in their reward distribution logic," noted a BTCC analyst who requested anonymity.

Why Hyperliquid’s Protocol Was a Target

Hyperdrive had gained traction as a "DeFi 3.0" yield aggregator, boasting $1.2 billion TVL before the hack. Its unique auto-compounding mechanism, while innovative, contained a logic flaw in its fee distribution contract. TradingView charts show HYPER tokens plummeting 68% within 6 hours post-hack.

How the Crypto Community Is Responding

Major exchanges like BTCC and Binance temporarily suspended HYPER deposits. Vitalik Buterin tweeted, "Another reminder that DeFi protocols need formal verification," sparking debates about auditing standards. Meanwhile, Hyperliquid’s team has promised a "full post-mortem" by October 1.

Historical Context: DeFi Hacks in 2025

This marks the 7th major DeFi exploit this year, per CoinMarketCap data:

Investor Takeaways

1.: Hyperdrive had two audits, but neither caught this edge case.
2.: No single protocol should hold >5% of your portfolio.
3.: Tools like DeBank can alert to abnormal contract interactions.