Bybit CEO: The 50x leveraged whale ETH long order liquidation event on Hyperliquid may promote innovation in CEX and DEX liquidation mechanisms

Odaily News Ben Zhou, CEO of Bybit, wrote on the X platform that the 50x leveraged whales on Hyperliquid liquidated ETH on a large scale, essentially using the platform's liquidation engine to exit. CEX actually faces the same challenge. When whales are liquidated, the CEX liquidation engine will also take over the positions. Reducing the overall leverage ratio is one way, and it may be the most effective way, but doing so will hurt the business because users always want to get higher leverage ratios. In addition, although it is also possible to consider deploying tools such as dynamic risk limit mechanisms, such as reducing the total leverage ratio according to the total position size as the position becomes larger, this problem cannot be fundamentally solved if users use multiple accounts.
If DEX hopes to provide high-leverage services in the long term and avoid situations like the 50x leveraged whale on Hyperliquid that used the platform’s liquidation engine to exit, it may need to try CEX-level risk management, such as market monitoring to detect abusers and market manipulators. It will be interesting to follow the subsequent developments of this matter, which may promote innovation in the liquidation mechanism.