Decentralized exchange Hyperliquid has reimbursed nearly $2 million to users affected by a brief outage last week, a move that may strengthen confidence in decentralized trading platforms.
The Hyperliquid platform’s application programming interface (API) suffered an outage last Tuesday, which saw traders sidelined from order execution for approximately 37 minutes before resuming operations, its website shows.
On Monday, Hyperliquid issued refunds totaling $1.99 million in USDC (USDC) to affected users, onchain data from Hypurrscan shows.
Source: Hypurrscan
Hyperliquid’s rapid response and $2 million repayment following the half-hour outage were praised by users.
“Over $1.5m has already been sent out to users (can confirm),” said Hyperliquid trader aaalex in a Monday X post. “Incredible considering they have no legal obligation, no contract or SLA to do this,” he added.
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Hyperliquid’s handling of the situation comes as decentralized exchanges (DEXs) grow more competitive with centralized platforms, despite recent setbacks. In March, the platform suffered a $6.26 million exploit involving the Jelly my Jelly (JELLY) memecoin due to a vulnerability in its liquidation parameters.
Top derivative exchanges by open interest. Source: CoinGecko
Hyperliquid has grown to become the seventh-largest derivatives exchange in the world, with over $10.6 billion of 24-hour open interest, up from the 12th place since the beginning of April, CoinGecko data shows.
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Hyperliquid outage caused by traffic spike, not exploit
While the outage sparked initial concerns over a potential hack or exploit, Hyperliquid stated that the issue was caused by a “significant spike in traffic” after the platform surpassed a $14.7 billion record high in total open interest on July 23.
Hyperliquid uptime. Source: Hyperliquid.statuspage.io
“During the period from 14:10-14:47 UTC on July 29, orders were delayed due to API servers experiencing a significant spike in traffic,” Hyperliquid said in a Monday Telegram announcement.
“The API returned error responses despite transactions being sent to the mempool and later included in blocks,” the announcement stated, adding that it initiated repayments to affected traders based on three categories.
However, users who are owed over $10,000 need to complete Know Your Customer (KYC) verification for the full refund. These users have already received $9,999 of their refunds, but will need to complete the verification process through a Discord ticket by Aug. 18 to receive the remaining funds.
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