The original whale was suspected to be Justin Sun, TRON’s founder, based on the wallet used to deposit USDC.
XPL, a pre-market token of the upcoming Plasma network, surged by 200% and fell rapidly on Hyperliquid during early Asian trading hours. A whale wallet was pinpointed as benefitting from a long position, with suspicion the whale may be TRON’s founder Justin Sun.
XPL, a pre-market token in the early stages of price discovery, rallied strongly on Hyperliquid in the early hours of August 27. The token is set to launch as the native asset of the Plasma network. The chain was specifically intended to carry Tether’s stablecoins, as Cryptopolitan previously reported.
The rally took XPL to $1.80 within minutes, after a whale wallet took a large long position. The whale then closed the long position, realizing $16M in profits within a minute. Other traders that tried to hedge XPL with short positions were liquidated rapidly. While XPL is a generally risky bet due to being in pre-contract trading, it was a singular whale that caused one of the most spectacular liquidation cascades on Hyperliquid.
A few hours before the trades, the whale also placed limit orders at $0.20 per XPL, buying up $25M worth of tokens. The limit order at that level suggests the whale may have expected an even bigger crash. The whale also placed limit orders at other price levels, in addition to opening and closing a series of strategic long positions.
This also drained the XPL liquidity, leading to a subsequent crash. In total, two whale addresses made $27.5M from longing XPL and realizing profits quickly, suggesting insider manipulation. Following the liquidation, only nine whales remained with positions on XPL, with four long positions and five whales shorting the pre-launch token.
As Cryptopolitan reported, Hyperliquid has seen other tokens being manipulated. The case of JELLY even led to changed rules for Hyperliquid validators. Manipulation of new token markets leads to losses for liquidity providers, as whales drain the available pools.
XPL whale still holds partial long position
The whale still holds a long position on XPL, with a notional value ranging between $9M and $15M. The position is supported with $39K in fees so far, while carrying another $1M in unrealized profits. A few hours after the trades, the whale withdrew around $5M in USDC on the Arbitrum chain.
The liquidation price is at $0.66, with XPL still trading uncertainly as its fair price is to be determined. Soon after the whale’s trades, XPL returned to around $0.61, its original price before the rally.
The price spike only happened on Hyperliquid, not affecting other exchanges that offer pre-contract trading for XPL.
Justin Sun suspected in aggressive XPL trading
The trades on Hyperliquid happened during early Beijing hours. The wallet was also suspected to belong to Justin Sun, the founder of the TRON network.
The link to Justin Sun hinges on a heavily used address, which was suspected to belong to him. The most affected wallet was a ‘Token Channel’, revealing a rapid liquidation for $7M.
On-chain investigator @mlmabc also pointed to @Techno_Revenant as one of the biggest winners, with up to $25M in realized profits.
Despite the decentralized platform, the XPL crash showed any whale could manipulate markets with a relatively small injection. So far, Hyperliquid has mostly attracted high-profile positions on BTC and ETH, with limited attempts to drain smaller token markets. However, the novelty of XPL led opportunistic whales to take profits. Hyperliquid is also transparent about all positions, leaving whales enough information to attack other traders.
The trading drained up to 70% of available XPL liquidity, and led to $7.7M in funding during the brief period of aggressive long positions.
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