- Jeff Yan dismissed CZ’s criticism after James Wynn’s $100 million BTC liquidation hunt.
- Yan claimed that insiders and operators can game private ‘dark pools’ advocated by CZ.
Hyperliquid [HYPE] founder Jeff Yan has fired back at Binance [BNB] founder Changpeng Zhao (CZ) for advocating for private traders’ open positions as the best approach to avoid the liquidation hunt in DeFi trading.
In an X (formerly Twitter) post on the 3rd of June, Yan quipped,
“Users are less likely to be successfully hunted if everyone knows liquidation and stop prices than when only the exchange operator (CEX) knows.”
Yan proposed that only ‘margin privacy’ or liquidation level should be kept secret to avoid a ‘liquidation hunt.’
Liquidation level is a price point that, when hit, will trigger an automatic liquidation of a margin or leveraged position by the CEX (centralized exchange) or DEX (decentralized exchange).
Hyperliquid better for whales?
However, Yan noted that CEXes have insider trading and operators with access to the margin data of the touted ‘private’ pools. As a result, CEX operators can hunt whale positions.
He said the liquidation hunt could be reduced if the pool (open positions) is public, like Hyperliquid DEX. This way, a whale can trick liquidation hunters to counter-trade with them and get discounted market entries.
Source: Jeff.HL/X
The debate was sparked after Hyperliquid whale James Wynn’s $100M BTC position was liquidated last week following an aggressive hunt.
In response, CZ criticized Hyperliquid’s public pools, which he claimed allow everyone to see and front-run other whale orders. Besides liquidation hunts, CZ decried high slippage and costs for traders in such platforms.
As a solution, he proposed private ‘dark pools’ based DEXes, drawing parallels from TradFi,
“I think now might be a good time for someone to launch a dark pool perp DEX. I have always been puzzled with the fact that everyone can see your orders in real-time on a DEX.”
However, Yan claimed, even dark pools can be gamed by insiders and operators. Interestingly, Wintermute founder Evgeny Gaevoy viewed this Crypto Twitter drama as an elaborate promotion for the Hyperliquid.
“But generally, I think ‘Wynn’ is just a well-executed HL promo campaign, well played.”
Amid the drama, Binance exchange, the U.S. subsidiary, announced it would list Hyperliquid’s HYPE on its spot trading platform.
“The $HYPE is real. Spot trading for Hyperliquid is coming soon to Binance.US.”
The update sent HYPE soaring over 12% above $35, making the $40 price target within reach.
