Hyperliquid founder strikes back! Furious at BNB platform for reporting liquidation volume inflated by 100 times.

Hyperliquid founder Jeff publicly accused the BNB platform on October 13 of inflating liquidation volumes, claiming that thousands of liquidation orders were only reported as one, with underreporting reaching up to 100 times. Jeff emphasized that all liquidations on Hyperliquid are transparent and verifiable on-chain, calling for the industry to prioritize neutrality. The BNB platform founder responded by stating that hundreds of millions have been invested in the ecosystem to protect users, revealing that he had once overslept and missed a meeting with Jeff.

Hyperliquid founder angrily criticizes: BNB platform's liquidation volume reported 100 times less

On October 13, Hyperliquid founder Jeff published a lengthy article on X platform, directly criticizing the data transparency issues of centralized trading platforms, pointing specifically to the serious overreporting of clearing volumes on the BNB platform. This leader of the decentralized exchange first emphasized the transparency advantages of Hyperliquid: "Hyperliquid is an on-chain blockchain, where all orders, transactions, and clearances are conducted on-chain. Anyone can verify the execution status of the chain without permission, including the reasonableness of all clearances and their transparent execution for all users."

Jeff subsequently pointed out the opaque practices of centralized trading platforms, specifically naming the severe issues with the reporting of clearing volumes on the BNB platform. He noted: "Some centralized trading platforms publicly declare that they severely underreport user clearing situations. For example, on the BNB platform, even if there are thousands of clearing orders within the same second, only one is reported." This accusation is extremely serious, as it implies that the clearing volume data seen by the outside world on the BNB platform may only be the tip of the iceberg, with the actual clearing scale potentially being dozens or even hundreds of times the publicly available data.

Jeff further explained the severity of the underreporting of BNB platform liquidation volume: "Since liquidations are sudden events, they often concentrate during periods of sharp market fluctuations. In some cases, the underreported liquidation volume on the BNB platform can easily reach 100 times." This means that when the market experiences a crash like on October 11, if the liquidation amount reported by the BNB platform is 1 billion USD, the actual liquidation could be as high as 100 billion USD. This data distortion not only misleads market participants but also prevents outsiders from accurately assessing the true risks and leverage levels in the market.

The founder of Hyperliquid elevated his remarks to the level of industry values: "I hope the industry can view transparency and neutrality as important characteristics of the new financial system, and allow other industries to follow suit." This statement raises the controversy over BNB platform's settlement volume from a technical issue to a philosophical and moral level, suggesting that the opaque practices of centralized trading platforms contradict the core values of decentralized finance. Jeff attempted to frame this controversy as a confrontation between "transparent decentralization" and "opaque centralization."

BNB platform's counterattack: the difference in value systems

In response to the public criticism of the clearing volume of the BNB platform by the founder of Hyperliquid, the founder of the BNB platform quickly posted a response on the X platform, but adopted a strategy of downplaying the issue. He did not directly address the specific accusations of inflated clearing volume on the BNB platform, but instead shifted the discussion to values: "While others try to ignore, hide, shirk responsibility or attack competitors, key participants in the BNB platform ecosystem have spent hundreds of millions of dollars out of their own pockets to protect users. A different value system."

This response strategy is quite clever. The founder of the BNB platform did not deny the issues with the BNB platform's reporting of liquidation volumes, nor did he provide technical explanations, but instead tried to shift the focus to the more noble theme of "protecting users." It implies that even if the BNB platform's reporting of liquidation volumes may be controversial, the platform's significant investment in protecting user interests is what truly matters. This "outcome-oriented" discourse attempts to circumvent the questions regarding "process transparency."

A more interesting behind-the-scenes story was revealed when the founder of the BNB platform accepted an interview with Threadguy on the 11th. He disclosed that although Hyperliquid founder Jeff participated in the first season of the BNB platform incubator, the two have never met. Earlier this year, Ella Zhang, the head of YZi Labs, attempted to arrange a meeting between the two founders, but "unfortunately, I set the alarm wrong and overslept." This self-deprecating explanation added a touch of humanity to this serious technical dispute.

However, the founder of the BNB platform stated that he does not regret missing that meeting, saying: "They (Hyperliquid) have already been very successful and are highly valued. I don't think they are the right target for us to acquire; we don't do large-scale acquisitions. So far, the largest acquisition we've made might be CoinMarketCap." This statement acknowledges the achievements of the Hyperliquid founders while also hinting at the differences in scale and positioning between the two companies. This expression of "not suitable for acquisition" may suggest that Hyperliquid has grown to a point where it no longer needs to rely on any platform.

The Battle of Transparency: Core Differences Between Decentralization and Centralization

The public dispute between the founder of Hyperliquid and the founder of the BNB platform essentially reflects the fundamental differences in philosophy and operational models between decentralized exchanges and centralized trading platforms. The controversy over the reporting methods of the BNB platform's clearing volume is merely a specific manifestation of this larger divide.

From a technical perspective, the issue pointed out by Jeff regarding the BNB platform's liquidation volume report is indeed reasonable. Centralized trading platforms often merge multiple liquidation events within the same timeframe for reporting, which may be due to considerations of system efficiency or data presentation simplification. However, this merged reporting can severely underestimate the actual number of liquidations and the potential number of users involved. When the outside world sees "one liquidation event," it may actually represent hundreds or even thousands of users being liquidated simultaneously.

The issue of data distortion in BNB platform liquidation volume is not just a technical detail; it has significant implications for market analysis and risk assessment. Researchers, media, and investors often use liquidation data to assess market leverage levels, identify moments of extreme volatility, and analyze market sentiment. If the BNB platform liquidation volume data is severely underestimated, the conclusions of these analyses may have systematic biases, leading to an underestimation of market risk.

The on-chain transparency emphasized by Hyperliquid's founder represents one of the core value propositions of decentralized exchanges. When all transactions, orders, and settlements are recorded on an immutable blockchain, anyone can independently verify the accuracy of the data. This transparency eliminates the reliance on honest reporting from the platform, allowing users and researchers to directly query on-chain data to draw their own conclusions. This is precisely what decentralized finance advocates believe sets it apart from traditional finance and centralized platforms.

However, the response from the BNB platform suggests a different value hierarchy. In their view, protecting user assets, providing liquidity support, and offering prompt customer service may be more important than the granularity of data reporting. Centralized platforms can make quick decisions in times of crisis, offering compensation to affected users, a flexibility that decentralized systems find difficult to achieve. From this perspective, although the BNB platform's liquidation volume reporting method may not be sufficiently transparent, if the end result is better protection for users, this compromise may be acceptable.

The controversy regarding the clearing volume and transparency of the BNB platform is unlikely to have a simple winner or loser conclusion. The decentralized camp represented by Hyperliquid's founder and the efficient centralized camp represented by the BNB platform each have their advantages and supporters. Ultimately, the market will vote with its feet, choosing the platforms that best meet their needs and values. For users who value transparency and verifiability, Hyperliquid's on-chain model is more attractive; for users who prioritize speed, liquidity, and customer service, centralized platforms may still be the preferred choice.