One Bad Price, 960 Liquidations: Inside SK Hynix Flash Crash on Hyperliquid

The xyz.SKHYNIX perpetual on Hyperliquid crashed around 20% almost instantly late on Monday night, dropping from $1,131 to as low as $900, completely decoupling from pricing elsewhere on crypto exchanges.

On-chain data indicates that the entire cascade stems from a single share trade placed from Seoul.

How One Bad Price Caused a Liquidation Cascade

It appears that during the pre-market window before trading opened on the South Korean Nextrade exchange, there was an order to sell stock for major chip manufacturer SK Hynix placed 30% below the previous closing price. This order may have been placed by accident.

With thin pre-market liquidity, there were no competing orders on Nextrade at that moment, and that single trade briefly set the price of the stock on that exchange.

The price corrected back to market value within two minutes, but by that time, the XYZ oracle responsible for setting the price for this stock on Hyperliquid had already consumed and relayed the information.

Just four seconds after Nextrade opened for trading, the SKHYNIX oracle price plummeted 15.6%, and liquidations began about 2 seconds later.

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